Alliance for Aging Research Files Brief Encouraging Federal Court to Delay Implementation of Administration’s Most Favored Nation Rule

Brief Explains that MFN Rule Would Cause Immediate Harm to Medicare Beneficiaries if Implemented on January 1, 2021

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– On Tuesday, December 15, 2020, the Alliance for Aging Research filed an amicus curiae brief, urging the United States District Court for the Northern District of California to temporarily halt the implementation of the Centers for Medicare and Medicaid Services’ (CMS) Most Favored Nation (MFN) Model interim final rule (“MFN Rule”) to avoid causing severe harm to older patients across the nation. The Alliance’s brief argues that the MFN Rule goes far beyond CMS’ lawful authority; relies on healthcare rationing of newer treatments for terminal cancers, vision loss, and other serious illnesses to produce savings; and effectively endorses the use of discriminatory cost-effectiveness standards used by foreign governments, which is currently prohibited under U.S. civil rights laws.

“Ten months into the worst pandemic the U.S. has experienced in a century, with 80 percent of COVID-19 deaths among those ages 65 and older, the White House is doubling down on healthcare rationing for older adults,” said Sue Peschin, President and CEO of the Alliance for Aging Research. “Older adults have paid their whole lives into the Medicare program to help them when they need it most. It’s offensive for this Administration to essentially say ‘too bad’ and take away their treatments. We trust the court will agree.”

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


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