The MFN Rule bases the purchase price for 50 prescription drugs paid for by Medicare Part B on the lowest cost found in comparable Organisation for Economic Co-operation and Development (OECD) countries. The Alliance’s brief argues that:

  • The MFN Rule exceeds CMS’ authority and illegally implements a change in law under the guise of a “model” demonstration project through the Center for Medicare and Medicaid Innovation;
  • By publishing the regulation as an “interim final rule,” CMS illegally avoided important notice and comment rulemaking requirements of the Administrative Procedure Act. The deadline for public comment is January 26, 2021, almost four weeks after the MFN model’s effective date of January 1;
  • According to CMS’ own data, the MFN rule relies on a 9 to 19 percent reduction in patient utilization of the MFN Part B drugs to generate savings, meaning government savings are achieved by depriving patients of access to critical medications they receive today and need to cure potentially fatal conditions, including cancer treatment;
  • Many of the included medications do not have comparable alternative treatments, so the MFN Rule will create conditions akin to drug shortages (such as when product is not available to patients in need due to supply chain interruptions). These shortages will result in increased patient mortality, adverse drug reactions, and hospitalizations.

Additionally, the MFN Rule would effectively endorse the use of discriminatory cost-effectiveness standards often used by the very OECD countries from which the MFN prices are taken. Many of the countries referenced in the MFN Rule, including the United Kingdom and Canada, make drug reimbursement and coverage decisions based on cost-effectiveness assessments measured in quality-adjusted life-years, or QALYs. These QALY assessments assign a financial value to the patients for whom a given treatment is intended. When applied to healthcare decision-making by insurance companies, this can mean that people who are sicker, older, and/or have disabilities are deemed “too expensive” to receive care.

In 2019, the National Council on Disability, an independent federal agency, published a report on QALYs that explicitly called on the Trump Administration to rescind its earlier International Pricing Index proposal, the predecessor policy to the MFN Rule, because it would rely on prices set internationally using discriminatory metrics of value.

The Alliance advocates on behalf of all older Americans and therefore has a deep interest in the outcome of this matter. As a result, the Alliance filed this brief so that the court will be apprised of the irreparable harm that the MFN Rule will cause for older adults.

The Alliance thanks David Farber and Christine Carletta from King & Spalding for serving as the Alliance’s pro bono counsel on this effort.

Read the Alliance for Aging Research amicus brief here.

Additional Resources:

Alliance for Aging Research Statement Opposing President Trump’s Executive Order on the International Pricing Index

Alliance for Aging Research Blog: Q+A on the Most Favored Nation Drug Pricing Proposal

About the Alliance for Aging Research

The Alliance for Aging Research is the leading nonprofit organization dedicated to accelerating the pace of scientific discoveries and their application to vastly improve the universal human experience of aging and health. The Alliance believes advances in research help people live longer, happier, more productive lives and reduce healthcare costs over the long term. For more than 30 years, the Alliance has guided efforts to substantially increase funding and focus for aging at the National Institutes of Health and Food and Drug Administration; built influential coalitions to guide groundbreaking regulatory improvements for age-related diseases; and created award-winning, high-impact educational materials to improve the health and well-being of older adults and their family caregivers. For more information, visit www.agingresearch.org.

Contact: Lauren Smith
[email protected]
Direct: (202) 688-1229
Cell: (240) 498-8123

SOURCE Alliance for Aging Research

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