No matter how you look at it, the Most Favored Nation rule is bad policy

Nicole Longo
Nicole Longo December 1, 2020

No matter how you look at it, the Most Favored Nation rule is bad policy.

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Last month, the administration released the “Most Favored Nation” (MFN) rule, which allows foreign governments to decide the value of Part B medicines, while also likely limiting seniors’ access to existing medicines and discouraging investments in future treatments and cures. No matter how you look at it, the MFN rule is bad policy. 

  • It is bad for patients. The MFN rule is likely to cause severe disruptions in many patients’ access to important medicines. In fact, the Centers for Medicare & Medicaid Services (CMS) admits outright that the policy will likely hurt patients, stating that, “beneficiaries may experience access to care impacts by…having to travel to seek care from an excluded provider, receiving an alternative therapy that may have lower efficacy or greater risks, or postponing or forgoing treatment.”  

  • It is bad for providers. The MFN rule will also burden many physicians and other health care providers with significant payment cuts and additional administrative hurdles, at a time when many are already under tremendous strain because of the pandemic. Ted Okon, Executive Director of the Community Oncology Alliance explained, “Rather than give community oncology providers the support they need during this third wave of the pandemic, as they struggle to keep their facilities and staff COVID-19 free while treating cancer patients, the Trump Administration is essentially throwing these providers under the bus.” And the American Hospital Association stated, “It is alarming that the Administration has issued this operationally burdensome rule after over two years, in the middle of a pandemic with cases at record levels, and with less than six weeks’ notice before the model begins.” 

  • It is bad for medical innovation. Biopharmaceutical researchers are making significant progress in the race to develop treatments and vaccines for COVID-19, but the MFN rule would undermine incentives for continued groundbreaking work in the United States. There is clear evidence from other countries of the negative impact from this type of policy change. For example, the adoption of government price setting and other anti-innovation policies across Europe in the 1980s and 1990s pushed most R&D investment away from the continent to countries with more pro-innovation policies, principally the United States. 

As PhRMA President and CEO Steve Ubl stated, “we’ve seen immense progress with vaccine candidates showing promising clinical trial results and treatments making their way through FDA review. This progress is possible largely because of America’s global leadership in biopharmaceutical R&D. Despite this, the administration is willing to upend the entire system with a reckless attack on the companies working around the clock to end this pandemic.” 

The bottom line: The MFN rule must be stopped.  

Topics: Medicare, Part B, CMMI, International Reference Pricing