Most Favored Nation Drug Pricing Rule Will Harm Patient Access and Jeopardize Practice Stability, Rheumatology Leaders Warn

The American College of Rheumatology (ACR) today warned that the Centers for Medicare and Medicaid Services (CMS) interim final rule establishing a “most favored nation” (MFN) payment model for Medicare Part B drugs will dramatically disrupt patient access to critical therapies needed to manage rheumatic diseases and conditions. Further, the rule threatens the financial solvency of many rheumatology practices – particularly those located in rural and underserved areas, including those that have been hardest hit by the COVID-19 pandemic – and jeopardizes the ability of rheumatologists to provide treatments to patients most in need.

“While the ACR supports efforts to rein in high drug costs, we strongly believe this policy will come at great expense to the patients we serve,” said David Karp, MD, PhD, president of the ACR. “As currently written, the MFN interim final rule makes dramatic cuts to specialty providers like rheumatologists who administer Part B drugs in hopes that manufacturers will be motivated to lower drug prices on their own. However, we have not seen this occur with similar efforts in the past, and drug prices have continued to rise for patients. We are concerned this model will severely restrict patient access to treatment while doing little to address the root causes of high prescription drug prices.”

Slated to begin in January 2021 – a little over a month from its initial publication in the Federal Register – the MFN model creates a mandatory, seven-year payment model for the 50 highest-cost drugs and biologics in Medicare Part B. It replaces the existing reimbursement formula that adds a 6 percent administration fee to the the average sale price of the drug with a new reimbursement system based on international pricing information from 22 different countries. Providers would instead be reimbursed the “most favored nation” price for the drug plus a fixed payment to cover the cost of procuring, storing, handling and administering these therapies. This is problematic, because the price of the drug internationally could be much lower than what the provider is able to purchase it at domestically.

“The new fixed payment rate will likely not be enough to cover the cost of acquiring and administering many of the therapies most frequently administered by rheumatologists, which will require practices to either operate at a loss or forgo offering the treatment altogether,” said Dr. Karp. “This will be detrimental to provider solvency and patient access to medications.”

According to estimates released with the rule, CMS expects reimbursements will be reduced by 65 percent once the model is fully implemented if manufacturers continue their current pricing structures. Further, the agency actually expects a significant portion of the projected savings from this proposal to come from patients losing access to care under this model.

“At a time when many healthcare providers have already been stretched thin due to the COVID-19 pandemic, it is dangerous for CMS to rush through a payment model that further compromises providers’ ability to offer quality rheumatology care,” Dr. Karp continued. “The ACR looks forward to working collaboratively with CMS officials to implement drug pricing reforms that do not put rheumatic disease patients and the providers they depend on for care in jeopardy.”

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The American College of Rheumatology (ACR) is an international medical society representing over 8,500 rheumatologists and rheumatology health professionals with a mission to empower rheumatology professionals to excel in their specialty. In doing so, the ACR offers education, research, advocacy and practice management support to help its members continue their innovative work and provide quality patient care. Rheumatologists are experts in the diagnosis, management and treatment of more than 100 different types of arthritis and rheumatic diseases.