Biden to pull the plug on ‘most favored nation’ drug rule

The Biden administration plans to pull the plug on a contentious Trump-era demonstration that would tie Medicare outpatient drug pay to other wealthy countries’ drug prices, according to a CMS proposed rule on Friday.

Hospitals had opposed the “most favored nation” drug policy, arguing that it would hurt their bottom lines and put the entire onus of lowering drug prices on hospitals rather than drug companies or Medicare. The Trump-era rule also would have created the CMS Innovation Center’s first nationwide, mandatory experiment—a massive departure from the agency’s usual approach to testing new payment models among a smaller subset of healthcare organizations.

“If finalized, our proposal 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,” the proposed rule said.

A federal court blocked the policy from taking effect on January 1 before the Biden administration took it under review. It’s been on hold ever since.


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