Press Release

Statement on Litigation Challenging Legality of the Administration’s Most Favored Nation Rule

WASHINGTON, D.C. (December 4, 2020) –Today, the Pharmaceutical Research and Manufacturers of America (PhRMA), the Association of Community Cancer Centers (ACCC), the Global Colon Cancer Association (GCCA) and National Infusion Center Association (NICA) filed a lawsuit in the U.S. District Court for the District of Maryland asserting that the Most Favored Nation (MFN) Interim Final Rule exceeds the statutory authority provided to the Centers for Medicare and Medicaid Services, raises serious constitutional questions and improperly fails to follow required rulemaking procedures. 

PhRMA Executive Vice President and General Counsel James C. Stansel stated:

“The Most Favored Nation Interim Final Rule is bad policy that is contrary to law and that the administration expressly admits will disrupt patients’ access to medicines. By pushing through a nationwide, mandatory policy change, the administration is essentially rewriting the Medicare statute. It is circumventing Congress entirely, ignoring the roles assigned to the executive and legislative branches. The U.S. Constitution is clear: The administration does not have the legal authority to write new laws or override existing laws through regulations. Laws must be passed by both chambers of Congress and signed by the president.

“By proceeding with an interim final rule, the administration has also deprived the American public of their right to provide input on these drastic changes before they are implemented. Alarmingly, they have used COVID-19 as a baseless pretext for skipping normal rulemaking, having delayed the issuance of a proposed rule for nearly two years. The MFN Interim Final Rule should be stopped from moving forward immediately before it can cause irreparable harm.”

ACCC Executive Director Christian Downs stated:

“This Interim Final Rule is impractical, unworkable and does not address the reforms necessary to protect Medicare beneficiaries and strengthen the cancer delivery infrastructure. It will have a disproportionate impact on smaller hospitals and practices which are already struggling due to the COVID-19 pandemic and force them to curtail services and access to ensure their viability.

“The Association of Community Cancer Centers (ACCC) has worked collaboratively with CMMI and other members of the oncology community to develop initiatives that reflect the real-world experiences of Medicare patients with cancer. We are incredibly disappointed that this extensive work is not reflected in this chaotic and disorganized model. If this Interim Final Rule goes into effect on January 1, 2021, it all but guarantees that an unsurmountable burden will be placed on our most vulnerable patients and the providers who care for them.”

GCCA Executive Director Andrew Spiegel stated:

“Patients need assurance that they can access the medicines and treatments they need. The administration’s Most Favored Nation Interim Final Rule will undercut efforts to provide high-quality care to Americans by importing foreign pricing policies from countries that have a history of access restrictions and treatment delays. These are problems that the Centers for Medicare and Medicaid Services (CMS) admitted will also happen within the U.S. health care system because of the rule’s expansive overhaul of Medicare Part B.

“In addition to limiting treatment options, the rule will also do little to directly lower out-of-pocket costs for patients, and it will likely stunt future investment in medical innovation. It is therefore distressing that the administration would impose this harmful policy in this current economic climate. CMS must reconsider the MFN rule, and instead focus on patient-centered reforms that improve costs without limiting access to essential care.”

NICA Chief Executive Officer Brian Nyquist stated:

“The MFN Rule restricts access to the medications that some of our nation’s most vulnerable patients rely on to optimize health outcomes, maximize quality of life, and minimize disease flares and progression. Foregoing the traditional rulemaking process to force the MFN Rule upon infusion providers is illegal and wrong. The Rule will restrict and disrupt access to care, force patients to switch from a drug that effectively manages disease to a less-effective drug for reasons unrelated to health or safety, and impair providers’ ability to provide adequate care, thereby disrupting the delicate disease management equilibrium patients have worked so hard to achieve. This will result in adverse health outcomes, reduced quality of life, increased physical and emotional burdens of disease, and increased cost to both patients and Medicare. NICA and its members firmly believe that the MFN Rule must be stopped.”

Additional information about the complaint:

The complaint’s allegations center on three key areas:

  • The administration has exceeded the authority granted to the Center for Medicare & Medicaid Innovation under the Affordable Care Act;
  • The administration has violated the U.S. Constitution by using a regulatory process to rewrite the Medicare statute and transform the reimbursement system for physician-administered medicines in the United States; and
  • The administration has failed to demonstrate the “good cause” required for the interim final rule to skip important notice and comment procedures that allow the American public to weigh in on regulations.

It is for these reasons that PhRMA, ACCC, GCCA and NICA are seeking to enjoin enforcement of the MFN Interim Final Rule, a declaration that the rule is unconstitutional and invalid, and other appropriate relief.

The full complaint and a summary can be found here: phrma.org/Report/PhRMA-Litigation-Challenging-Legality-of-the-Administrations-Most-Favored-Nation-Rule


About PhRMA

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier and more productive lives. Since 2000, PhRMA member companies have invested nearly $1 trillion in the search for new treatments and cures, including an estimated $83 billion in 2019 alone

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