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Federal Register / Vol. 86, No. 247 / Wednesday, December 29, 2021 / Rules and Regulations
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Andrew Hirshfeld, Commissioner for Patents, Performing the Functions and Duties of the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.
FR Doc. 202128128 Filed 122821; 8:45 am BILLING CODE 351016P

DEPARTMENT OF HEALTH AND
HUMAN SERVICES
Centers for Medicare & Medicaid Services 42 CFR Part 513
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RIN 0938AT91

Most Favored Nation MFN Model Centers for Medicare &
Medicaid Services CMS, HHS.
ACTION: Final rule.
AGENCY:

This final rule rescinds the Most Favored Nation Model interim final rule with comment period that appeared in the November 27, 2020, Federal Register.
DATES: This final rule is effective February 28, 2022.
FOR FURTHER INFORMATION CONTACT: Lara Strawbridge, 410 7867400 or MFN@
cms.hhs.gov.
SUMMARY:

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I. Background In the August 10, 2021 Federal Register 86 FR 43620, we published a proposed rule 86 FR 43618, hereafter, referred to as the August 2021
proposed rule that would rescind the Most Favored Nation MFN Model interim final rule with comment period 85 FR 76180 that appeared in the November 27, 2020 Federal Register hereafter, referred to as the November 2020 MFN Model interim final rule.
The November 2020 MFN Model interim final rule established a 7-year nationwide, mandatory MFN Model to test an alternative way for Medicare to pay for certain Medicare Part B single source drugs and biologicals including biosimilar biologicals, under section 1115A of the Social Security Act the Act, with the model performance period beginning on January 1, 2021.
The MFN Model was not implemented on January 1, 2021 as contemplated following four lawsuits and a nationwide preliminary injunction. On December 28, 2020, the U.S. District
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Court for the Northern District of California issued a nationwide preliminary injunction in California Life Sciences Assn v. CMS, No. 3:20cv 08603, which preliminarily enjoined HHS from implementing the MFN
Model and the November 2020 interim final rule. For additional information on the MFN Model and the related lawsuits, see the August 2021 proposed rule, the November 2020 MFN Model interim final rule, and the MFN Model website.1
II. Provisions of the Proposed Regulations and Analysis of and Responses to Public Comments Given that the nationwide preliminary injunction precluded implementation of the MFN Model on January 1, 2021, as contemplated, that multiple courts found procedural issues with the November 2020 interim final rule, and that stakeholders expressed concern about the model start date,2 in the August 2021 proposed rule 86 FR
43620, we proposed to rescind the November 2020 MFN Model interim final rule and remove the regulations at 42 CFR part 513 these actions would withdraw the MFN Model, and invited comments on our proposal. We received 34 timely items of correspondence from health care providers such as health systems, hospitals, physician practices, and infusion centers, physician specialty groups, drug manufacturers, pharmaceutical industry groups, pharmacy benefit managers, patient advocacy groups, and individuals.
The following is a summary of the public comments received as well as our responses.
Comment: In general, the comments on the August 2021 proposed rule closely aligned with the comments we received in response to the November 2020 MFN Model interim final rule.
Several commenters expressed general support for lowering drug prices.
However, all but one of the commenters supported our proposal to rescind the November 2020 MFN Model interim final rule and remove the associated regulatory text at 42 CFR part 513. A
1 See the MFN Model website at https
innovation.cms.gov/innovation-models/mostfavored-nation-model.
2 For example, in response to the November 2020
interim final rule, commenters stated that the MFN
Model should not start during the COVID19
pandemic, and in addition that the model should not begin on January 1, 2021, while the public comment period for the November 2020 interim final rule was ongoing until January 26, 2021.
Further, commenters stated that CMS failed to allow MFN participants sufficient time to prepare for model start and to develop and deploy new systems with distributors and customers to exclude model sales from average sales price ASP
reporting.

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commenter supported advancing the MFN Model, stating that the model is a guarantee to every American that we are not overpaying for the life sustaining medications they need. . . . Give Americans the same drugs for the same price as the rest of the world. Several commenters urged us not to implement the MFN Model or similar models, such as any model that would test international or domestic reference pricing now or in the future. Many commenters expressed concerns about the potential for beneficiaries to lose access to drugs included in the MFN
Model if manufacturers did not lower prices to align with the model payment amount, the potential for an MFN Model start to exacerbate practice struggles during the COVID19 pandemic, and the potential financial hardship and administrative burden that hospitals, physician practices, and 340B covered entities may experience related to the MFN Model. Some commenters described legal concerns that were raised in the model-related lawsuits.
Response: We appreciate commenters support for our proposal to rescind the November 2020 MFN Model interim final rule and remove the associated regulatory text at 42 CFR part 513 these actions would withdraw the MFN
Model. We appreciate the commenters concern that Americans are paying more for drugs than consumers in other countries pay, although we disagree with the commenter that the MFN
Model would guarantee that Americans would pay the exact amount that others pay for drugs, as the MFN Model was designed as a 7-year model test that would phase in the MFN Price over time, and further, there is no one international price that others outside the United States pay. We will continue to carefully consider this commenters feedback and other stakeholders feedback that we received as we explore all options to incorporate value into payments for Medicare Part B drugs, improve beneficiaries access to evidence-based care, and reduce drug spending for consumers and throughout the health care system. As stated in the Department of Health and Human Services HHS Comprehensive Plan for Addressing High Drug Prices: A
Report in Response to the Executive Order on Competition in the American Economy September 9, 2021, there are many administrative tools that could be used to promote competition and reduce drug pricing, including testing models in Medicare Part B using value-based payments, in which payment for drugs
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