As expected, the Centers for Medicare & Medicaid Services’ (CMS) interim final rule to implement a seven-year most favored nation (MFN) Medicare payment model for 50 drugs crashed into the brick wall of a U.S. court.
The U.S. District Court for the District of Maryland issued a 14-day nationwide temporary restraining order Dec. 23 to keep the rule from going into effect Jan. 1 as scheduled.
In so doing, the court found that the Pharmaceutical Research and Manufacturers of America, the Association for Community Cancer Centers and other groups that challenged the interim rule on grounds that it violated the Administrative Procedures Act (APA) “are likely to prevail on the merits.” The court also concluded that the plaintiffs had demonstrated that they probably would “suffer irreparable harm absent injunctive relief.”
Under the APA, agencies need to have good cause to issue an interim final rule, which may be implemented at the same time it’s released for comment. Under the normal rulemaking process, an agency must issue prior notice and allow a 60-day public comment period before finalizing and implementing a rule.
The court “is not unsympathetic to CMS’s desire to test a new model to rein in Medicare Part B drug costs,” Judge Catherine Blake said in a memorandum accompanying the order. “But an agency may not dispense with notice and comment procedures merely because it wishes to implement what it sees as a beneficial regulation immediately.
“Agencies presumably always believe their regulations will benefit the public. If an urgent desire to promulgate beneficial regulations could always satisfy the requirements of the good cause exception, the exception would swallow the rule and render notice and comment a dead letter,” she continued.
Blake added that CMS’ use of the current pandemic to invoke the good cause exception falls flat. The agency was relying “more on speculation than on evidence to establish that the COVID-19 pandemic has created an emergency in Medicare Part B drug pricing sufficient to justify dispensing with valuable notice and comment procedures” before implementing the payment model on a nationwide basis, she said.
“An agency may not rely solely on its own expertise to establish good cause; findings of fact are required,” the judge reminded CMS. In this case, CMS’ findings were “‘simply too scant to establish’ that the COVID-19 pandemic’s recent surge is increasing the financial burden on beneficiaries due to increased costs associated with the drugs covered by the MFN rule or that the rule will immediately decrease drug costs for those individuals,” the judge said.
EC extends vaccine program
The European Commission (EC) approved a €70 million package Dec. 28 to give its Western Balkans partners swifter access to COVID-19 vaccines procured by EU member states.
The funding, to be disbursed in the form of grants, will enable countries in the Western Balkans region to start vaccinations in priority groups parallel with EU member states instead of having to wait for vaccines under the global COVAX initiative, which is expected to start later than the EU campaigns, according to the EC.
The grant program will allow the Western Balkans to purchase vaccines from the EU Advance Purchase Agreements with six manufacturers, with EU member states sharing a part of their pre-allocated doses.