Biden Administration Rescinds Controversial Trump-Era Drug Pricing Rule

On August 3, 2021, Department of Health and Human Services secretary Xavier Becerra announced a proposed rule describing the Centers for Medicare & Medicaid Services (CMS) intention to rescind a Trump-era rule concerning Medicare Part B drug pricing. The rule was scheduled to be published in the Federal Register on Tuesday. 

The Trump administration had intended to implement a rule they called the “Most Favored Nation Model.” The model’s intention was to control prescription drug prices by matching Medicare Part B drug prices to the lowest price paid by other developed nations. These lower prices would be based on other wealthy countries in the Organisation for Economic Co-operation and Development with a GDP that is at least 60% of the United States GDP. The plan would focus on about 50 drugs which account for a significant percentage of Medicare spending.

Medicare Part B drug pricing would be adjusted in accordance with these counties, described as being set to “the lowest price, after adjusting for volume and differences in national gross domestic product, for a pharmaceutical product that the drug manufacturer sells in a member country of the Organisation for Economic Co-operation and Development that has a comparable per-capita gross domestic product.”

The model was never implemented because it was met with legal challenges and injunctions initiated primarily by pharmaceutical companies. Providers have expressed their contempt for the rule, asserting that “if the model went into effect, it would have threatened access to care for some of the country’s most vulnerable patients,” which they claimed is a more pressing need than ever due to COVID-19. Multiple courts also claimed to find procedural issues with the rule. 

Since CMS gave little time for comments on the rule prior to its implementation, there were several complaints that they had violated the federal Administrative Procedures Act.

While current CMS officials recognized the need for high prescription drug costs to be addressed, they explained their proposed rule “would allow us to take time to further consider the issues identified by commenters and would address the November 2020 interim final rule’s procedural deficiencies by rescinding it.” CMS said that they will “explore all options” in an effort to properly address the high cost of Medicare Part B drugs.