News & Views: 11/17 - 11/23

November 24, 2020

The White House announced the Most Favored Nation Interim Final Rule with Comment Period (IFC) which will allow Medicare Part B to pay no more than the lowest price from a comparable nation.

The IFC was announced following the most favored nation (MFN) executive order from earlier this year. The model is intended to lower the out-of-pocket costs for high cost Medicare Part B drugs by only paying the lowest price that manufacturers receive from comparable OECD countries. The MFN model will run for seven years, beginning January 1, 2021, during which period CMS will monitor the model to evaluate changes in access to drugs, program costs, and the quality of care. The Department for Health and Human Services has estimated that the model will save American taxpayers $85 million over the seven-year period, although CMS has projected that most of the projected savings will come from restricted access. The comment period for the rule closes on January 26, 2021. To review the rule, click here.

  • To review the CMS fact sheet, click here.
  • To review the HHS press release, click here.
  • To read the Health Affairs blog post on the rule, click here.

The Trump administration announced the finalized proposal to move PBM rebates to the point of sale.

The administration, along with Secretary Azar, believe moving rebates to the point of sale will lower the high out-of-pocket costs for many Medicare beneficiaries. The rule excludes any rebates paid by manufacturers to PBMs and Part D plans from safe harbor protections and creates new safe harbor protections for discounts on the price of drug at the point of sale and for fixed-fee services arrangements between manufacturers and PBMs. While the previous version of the rebate rule was estimated to increase Medicare spending by $197 billion, Secretary Azar has stated that such an increase will not happen with this rule, although there is no updated score to support his claim. The rule is expected to take effect on January 1, 2022. To review the rule, click here.

  • To review the HHS fact sheet, click here.
  • To read the Health Affairs blog post on the rule, click here.

The Department of Health and Human Services announced their withdrawal from the Unapproved Drugs Initiative.

The FDA initiative worked to remove any unapproved drugs from the market. Trump said that the program was being exploited by drug manufacturers to obtain market exclusivity and raise prices. HHS’ announcement stated the program is being eliminated for evidence-based and legal reasons. Secretary Azar explained that the withdrawal from the program is because it “has been used by drug companies to increase prices dramatically and linked to drug shortages for important drugs patients need.” To review, the official announcement published in the Federal Register, click here.

PhRMA has filed a complaint with the US District Court of DC against the Department of Health and Human Services for the September 24th rule allowing states to import drugs from Canada.

PhRMA claims the final rule will not save patients money on their prescription drugs and that it poses a public health risk. The complaint focuses on how it is unlikely for the rule to save states money, even though that is a requirement of HHS and that it poses a risk to any necessary tracing efforts, which could threaten the drug supply chain. To review PhRMA’s complaint, click here.

Amazon announced the launch of their new mail-order pharmacy, which will give Amazon Prime members significant discounts on their prescription drugs.

Prime members are expected to receive up to 80% off of generic and 40% off of brand drugs when paying without insurance. Members will also be able to compare prescription prices with and without insurance coverage. To read more about Amazon Pharmacy, click here.

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