CMS proposes pulling model that ties Part B drug prices to those paid overseas

The Biden administration has pulled a Trump-era regulation that ties Medicare Part B prices for certain products to prices paid overseas.

The proposed rule, released Friday by the Centers for Medicare & Medicaid Services, comes in response to a series of legal defeats that the Biden administration faced over the controversial model.

The model would tie the prices for certain Part B single-source drugs and biologics to the average price paid by several overseas countries.

The Trump administration released an interim final rule on Nov. 27, 2020, for the model, which had a Jan. 1, 2021, start date.

However, four lawsuits were filed the next month asking for a delay to the effective date of the model. A federal judge agreed to an injunction to keep the rule from taking effect.

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That injunction has been delayed several times after the Department of Health and Human Services (HHS) asked for more time to decide what to do on the rule.

HHS was facing another deadline as the latest stay expired on Aug. 9, and the last order hinted that another one may not be granted since the agency had half a year to decide how to proceed with the rule.

CMS said the agency got 1,166 comments on the November 2020 interim final rule. A majority of them were worried about starting the model in the midst of the COVID-19 pandemic and the quick start date that ran afoul of the court.

“If finalized, our proposal would allow us to take time to further consider the issues identified by commenters and would address the Nov. 2020 interim final rule’s procedural deficiencies by rescinding it,” the agency said.

The decision is a big win for the pharmaceutical industry and the hospital industry, which were worried about cuts in Medicare drug reimbursements for Part B drugs that are dispensed in an office setting.

The American Hospital Association wrote to CMS in January that the model could hurt some providers by reimbursing them less for “for some critical medicines such as cancer drugs. Some providers will close and their patients will have to deal with the fallout.”