Most Favored Nation Drug Pricing
The Trump Administration’s Most Favored Nation drug rule that was supposed to go into effect on January 1, 2021, is under a 14-day temporary restraining order filed by the Pharmaceutical Research and Manufacturers of America (PhRMA) and granted by the Maryland US District Court. The US District Court in California as well as Regeneron, the maker of Eylea, were both granted preliminary injunctions as well. The Most Favored Nation rule creates a mandatory, 7-year payment model for the 50 highest cost drugs and biologics. It would replace the existing reimbursement that adds 6% to the average sales price (ASP) with new pricing based on 22 different countries’ pricing plus a fixed payment to cover the cost of storing, handling, etc.
Unfortunately, the most favored nation model puts the burden on providers by slashing payments for the drugs they purchase but does not address the pricing charged by the drug companies. As a result of the restraining order and the injunctions, the reimbursement methodology for the top 50 drugs will continue to be based on ASP plus 6%. PRL continues to monitor pending developments related to the rules’ implementation and will update clients when more information becomes available.