Judge to decide soon whether CMS outpatient drug pay demo must temporarily stop


A federal judge in Maryland on Friday said she will decide by Dec. 24 whether the Trump administration’s new outpatient drug payment demonstration tied to international drug prices can be implemented on time.

U.S. District Judge Catherine Blake made the comments in a hearing on whether she should issue a temporary restraining order on CMS’ most-favored nation drug payment demonstration, which is set to go into effect on Jan. 1, 2021. The Pharmaceutical Research and Manufacturers of America, Association of Community Cancer Centers, the Global Colon Cancer Center Association and National Infusion Center Association sued to stop implementation of CMS’ interim final rule, and their lawsuit is one of several ongoing legal challenges to the policy.

The hearing centered on procedural issues in the case, particularly whether the government had good cause to forgo a notice-and-comment period. A proposed version of the policy languished at the White House budget office for a year and a half, but the Trump administration in November claimed that the COVID-19 pandemic created a sense of urgency to immediately finalize the policy, which was announced in November.

“For a seven-year demonstration that the agency is taking four years to phase in, it’s hard to argue there is an interest in implementing it on one specific day,” PhRMA counsel and Arnold & Porter Kaye Scholer Partner John Elwood said.

Elwood also pointed out the vast majority of Medicare beneficiaries that receive drugs included in the demonstration have supplemental insurance that insulates them from cost-sharing.

Another element of PhRMA’s argument to delay the legislation was that healthcare providers and drugmakers can’t renegotiate contracts to accommodate the new reimbursement levels in just a few weeks, which could disrupt patients’ treatment plans during a pandemic.

The government argued that some beneficiaries may still benefit from cost savings. While the CMS Office of the Actuary estimated that the policy may cause some beneficiaries to lose access to their drugs, DOJ trial attorney Rachael Westmoreland said the behavioral analysis should be taken “with a grain of salt.”

If the demonstration did cause beneficiaries to lose access to medications HHS would be legally required to stop it, Westmoreland said.

The government also contended that providers are exaggerating the immediate financial risk to their businesses because the reimbursement cuts would be phased in over four years.



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