Weekly Policy Update: President Moves Forward with Most-Favored-Nation Drug Pricing Policy
By: Colorado BioScience Association Date: 09/14/2020
On Sunday, President Trump issued an Executive Order on a drug pricing policy called “most-favored-nation.” The order directs the Secretary of Health and Human Services (HHS) to develop and implement demonstration projects that cap the reimbursement for Medicare Part B and D medicines at the lowest price paid in any economically comparable country. The President teased this policy at the end of July with a plan for Part B medicines, but the recent order goes even further and expands the payment models to apply to both Part B and Part D products.
As outlined in the executive order, the “most favored nation price” is the lowest price, after adjusting for volume and difference in national gross domestic product, for a pharmaceutical product that the manufacturer sells in an OECD country that has comparable per-capita gross domestic product.
Payment Model on the Most-Favored-Nation Price in Medicare Part B: The executive order directs the Secretary of HHS to develop and implement a payment model in which Medicare would pay no more than the most-favored-nation price for certain high-cost prescriptions drugs and biologics covered by Medicare Part B.
Payment Model on the Most-Favored-Nation Price in Medicare Part D: The executive order directs the Secretary of HHS to develop and implement a payment model in which Medicare would pay no more than the most-favored-nation price for Part D prescription drugs or biologics with prices above those in other OECD countries, where insufficient competition exists.
CBSA remains deeply concerned about how these models will reduce investment in new, innovative treatments and limit patient access and choice. We are working closely with our national industry partners and the Council of State Bioscience Associations on a coordinated opposition strategy.
We expect that the Center for Medicare and Medicaid Services (CMS) could issue an Interim Final Rule for the Part B payment model very soon. We will share additional information as we learn more, and we will provide updates in the coming weeks on our advocacy efforts.