ACR Supports Decision by Centers for Medicare and Medicaid Services to Withdraw “Most Favored Nation” Model

The American College of Rheumatology (ACR) shows support for a decision by Centers for Medicare and Medicaid Services (CMS) to withdraw a rule to implementing the “Most Favored Nation” (MFN) payment model for Part B drugs, according to a recently released statement.

The MFN model was originally proposed by CMS in November 2020 and was set to begin in January 2021. However, the implementation was delayed by a federal judge in December 2020 and placed on hold by the Biden Administration. Approximately 700 ACR advocates shared their concerns about the MFN model and CMS responded that it was formally withdrawing the proposal.

The MFN model would have replaced the current reimbursement system for the 50 highest-costing drugs and biologics with a mandatory, 7-year payment plan. Instead of an additional 6% administration fee to the average sale price for each drug, the MFN model would have an individualized reimbursement system based on international pricing information from 22 different countries. This would result in providers being reimbursed the MFN price for the drug plus a fixed payment to cover any additional costs associated with procurement, storage, and administration regardless of the actual costs incurred by medical practices. The CMS estimated that reimbursements will be reduced by 65% once the MFN model was fully implemented.

Leaders of ACR believe that this policy would affect patients with rheumatic disease, especially those in rural or underserved areas who are significantly affected by the COVID-19 pandemic. In addition, the CMS acknowledged that a significant portion of their cost savings would come from patients who would lose their access to rheumatologic care.

“We remain committed to working with CMS and other regulatory agencies on solutions to lower the cost of prescription drugs while ensuring people living with rheumatic diseases are able to continue accessing the care and therapies they need,” David Karp MD, PhD, president of the ACR, concluded. 

Reference

American College of Rheumatology. ACR commends CMS decision to withdraw Most Favored Nation model. News release. Published August 11, 2021. Accessed August 16, 2021. https://www.newswise.com/articles/acr-commends-cms-decision-to-withdraw-most-favored-nation-model.