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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules
November 2020 interim final rule:
Association of Community Cancer Centers v. Azar, No. 8:20cv03531 D.
Md.; California Life Sciences Assn v.
CMS, No. 3:20cv08603 N.D. Ca;
Regeneron Pharmaceuticals v. HHS, No.
7:20cv10488 S.D.N.Y.; and Community Oncology Alliance, Inc. v.
HHS, No.1:20cv03604 D.D.C.. On December 28, 2020, the U.S. District Court for the Northern District of California issued a nationwide preliminary injunction in California Life Sciences, which preliminarily enjoined HHS from implementing the MFN
Model and the November 2020 interim final rule. The lawsuits in the U.S.
District Court for the District of Maryland and the U.S. District Court for the District of Columbia were stayed based on the nationwide preliminary injunction. On December 30, 2020, the U.S. District Court for the Southern District of New York issued a preliminary injunction in Regeneron Pharmaceuticals v. HHS, which preliminarily enjoined HHS from applying the November 2020 interim final rule to Regenerons drug EYLEA
aflibercept.
On January 8, 2021, the Solicitor General determined not to appeal the preliminary injunction issued in California Life Sciences. On January 19, 2021, at the parties request, the U.S.
Northern District of California stayed the case until at least April 23, 2021.
Subsequently, on April 26, 2021, another stay was granted until July 26, 2021. On July 29, 2021, another stay was granted until September 27, 2021.
In Regeneron Pharmaceuticals, on February 2, 2021, the plaintiff filed a letter seeking leave to file a motion for summary judgment, and HHS filed a letter seeking leave to file a motion for a stay. On February 10, 2021, the U.S.
District Court for the Southern District of New York granted HHSs request and stayed the case for 90 days that is, through May 11, 2021. On May 10, 2021, the stay in this case was extended for an additional 90 days, until August 9, 2021, to give HHS time to consider how to proceed with the rule in light of the unanimous court decisions to date. In its order, the court noted that HHS should not assume that another stay will be granted, as the stays gave HHS a half-year to reach a conclusion regarding how to proceed.
As a result of the nationwide preliminary injunction, the MFN Model was not implemented on January 1, 2021, as contemplated in the November 2020 interim final rule. While the nationwide preliminary injunction has been in place, CMS considered how to proceed given stakeholders concerns
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about potential impacts of the MFN
Model.
II. Provisions of the Proposed Regulations We received approximately 1,166
timely pieces of correspondence in response to the November 2020 interim final rule. We appreciate the comments that we received. We note that many commenters agreed with HHS about the urgency of addressing high prescription drug prices, but nearly all of the commenters expressed concern about beginning the model on January 1, 2021, including starting the model during the COVID19 pandemic. 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,10 we are proposing to rescind regulations added by the November 2020 interim final rule and remove the associated regulatory text at 42 CFR part 513. We believe this proposed rule communicates how we wish to proceed with the November 2020 interim final rule to the courts and the public. Since the preliminary injunctions prevented the November 2020 interim final rule from taking effect, we do not believe there would be any disruption to reliance interests or Medicare program administration if this proposed rule were to take effect. If finalized, our proposal would allow us to take time to further consider the issues identified by commenters and would address the November 2020
interim final rules procedural deficiencies by rescinding it. We note that this proposed rule that is, our proposal to effectively withdraw an interim final rule with comment period is limited to the codification of the November 2020 interim final rule, and does not reflect any judgment by HHS
regarding future policy.
On July 9, 2021, President Biden signed an Executive Order on Promoting Competition in the American Economy that, in part, directs the Secretary of HHS to take steps to lower the prices of and improve access to prescription drugs and biologicals. HHS is exploring 10 For example, 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 ASP reporting.

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opportunities to promote value-based care for our beneficiaries; to address the high cost of Medicare Part B drugs, manufacturers pricing, and the resulting growth in Medicare Part B
drug spending; and to modernize the Medicare program to improve the quality and cost of care for beneficiaries.
We will continue to carefully consider the comments we received on the November 2020 interim final rule as we explore all options to incorporate value into payments for Medicare Part B drugs and improve beneficiaries access to evidence-based care.
We invite comments on our proposal to rescind and remove the regulations at 42 CFR part 513, which also would withdraw the MFN Model.
III. Collection of Information Requirements As stated in section 1115Ad3 of the Act, Chapter 35 of title 44, United States Code, shall not apply to the testing and evaluation of CMS Innovation Center Models. However, costs incurred through information collections were described in sections III.H., III.I.b., and VI.C.5. of the November 2020 interim final rule 85 FR 76221, 76222, and 76244, respectively . If this proposed rule is finalized, requirements related to the information collection described in the November 2020 interim final rule would not continue. As such, resulting savings are included in the estimate of the impact of our proposal to withdraw the MFN Model in section V.C. of this proposed rule. Further, this proposed rule does not impose information collection requirements, that is, reporting, recordkeeping or third-party disclosure requirements. Consequently, there is no need for review by the Office of Management and Budget under the authority of the Paperwork Reduction Act of 1995 44 U.S.C. 3501 et seq..
IV. Response to Comments Because of the large number of public comments we normally receive on Federal Register documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a subsequent document, we will respond to the comments in the preamble to that document.
V. Regulatory Impact Analysis A. Statement of Need The purpose of this proposed rule is to propose the rescission of the Most Favored Nation Model, codified by an interim final rule with comment period
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