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Federal Register / Vol. 86, No. 151 / Tuesday, August 10, 2021 / Proposed Rules of the following three ways please choose only one of the ways listed:
1. Electronically. You may submit electronic comments on this regulation to http www.regulations.gov. Follow the Submit a comment instructions.
2. By regular mail. You may mail written comments to the following address ONLY: Centers for Medicare &
Medicaid Services, Department of Health and Human Services, Attention:
CMS5528P, P.O. Box 8013, Baltimore, MD 212448013.
Please allow sufficient time for mailed comments to be received before the close of the comment period.
3. By express or overnight mail. You may send written comments to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS5528P, Mail Stop C42605, 7500 Security Boulevard, Baltimore, MD 212441850.
For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section.
FOR FURTHER INFORMATION CONTACT: Lara Strawbridge, 410 7867400 or MFN@
cms.hhs.gov.
Inspection of Public Comments: All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. We post all comments received before the close of the comment period on the following website as soon as possible after they have been received: http
www.regulations.gov. Follow the search instructions on that website to view public comments. CMS will not post on Regulations.gov public comments that make threats to individuals or institutions or suggest that the individual will take actions to harm any individual. CMS continues to encourage individuals not to submit duplicative comments. We will post acceptable comments from multiple unique commenters even if the content is identical or nearly identical to other comments.

SUPPLEMENTARY INFORMATION:

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I. Background Increases in Part B prescription drug spending significantly outpace the growth in spending on other Medicare Part B services,1 and prices in the 1 Nguyen X. Nguyen and Steve Sheingold.
Medicare Part B Drugs: Trends in Spending and Utilization, 20062017. Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services.
November 20, 2020 https aspe.hhs.gov/pdf-

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United States U.S. for most Medicare Part B drugs with the highest Medicare spending far exceed prices in other countries.2 3 Specifically, drugs have consistently been a major contributor to the overall Medicare Part B spending trend. Medicare Part B fee-for-service FFS spending for separately payable physician-administered drugs and drugs furnished in a hospital outpatient department represented about 11
percent of Medicare Part B FFS benefit spending in 2015, but accounted for about 37 percent of the change in Medicare Part B FFS benefit spending from 2015 to 2020.4 In addition to the continued growth in spending, Medicare pays substantially more than other countries for many of the highestcost Medicare Part B drugs that beneficiaries receive in an outpatient setting for which Medicare Part B allows separate payment.5 In many instances, Medicare pays more than twice as much for certain drugs as other countries do.6
report/medicare-part-b-drugs-spending-andutilization.
2 Comparison of U.S. and International Prices for Top Medicare Part B Drugs by Total Expenditures accessed via https aspe.hhs.gov/
pdf-report/comparison-us-and-international-pricestop-medicare-part-b-drugs-total-expenditures; ElKilani Z, Finegold K, Mulcahy A, and Bosworth A.
Medicare FFS Part B and International Drug Prices:
A Comparison of the Top 50 Drugs. Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. November 20, 2020 https
aspe.hhs.gov/pdf-report/medicare-ffs-part-b-andinternational-drug-prices.
3 Individual countries differ in the regulatory processes and standards governing approval of drugs and biologicals. Use of international drug prices in the MFN Model should not be interpreted to connote FDA approval or to otherwise describe any scientific or regulatory relationship between U.S.-approved and non-U.S.-approved products.
4 2020 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
Accessed via: https www.cms.gov/files/document/
2020-medicare-trustees-report.pdf.
5 Comparison of U.S. and International Prices for Top Medicare Part B Drugs by Total Expenditures accessed via https aspe.hhs.gov/
pdf-report/comparison-us-and-international-pricestop-medicare-part-b-drugs-total-expenditures; ElKilani Z, Finegold K, Mulcahy A, and Bosworth A.
Medicare FFS Part B and International Drug Prices:
A Comparison of the Top 50 Drugs. Washington, DC: Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. November 20, 2020 https
aspe.hhs.gov/pdf-report/medicare-ffs-part-b-andinternational-drug-prices.
6 Comparison of U.S. and International Prices for Top Medicare Part B Drugs by Total Expenditures accessed via https aspe.hhs.gov/pdf-report/
comparison-us-and-international-prices-topmedicare-part-b-drugs-total-expenditures; El-Kilani Z, Finegold K, Mulcahy A, Bosworth A. Medicare FFS Part B and International Drug Prices: A
Comparison of the Top 50 Drugs. Washington, DC:
Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services. November 20, 2020 https aspe.hhs.gov/
pdf-report/medicare-ffs-part-b-and-internationaldrug-prices.

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This imbalance in payment arises because Medicare generally establishes the payment for separately payable Medicare Part B drugs using the methodology in section 1847A of the Social Security Act the Act. In most cases, this means payment is based on the average sales price ASP plus a statutorily mandated 6 percent add-on.
Under this methodology, the Medicare program does not get the benefit of the substantial discounts provided in other countries, because ASP is calculated using only the prices that manufacturers charge to certain U.S.-based purchasers.
ASP-based payments may also encourage the use of more expensive drugs because the dollar amount of the 6 percent add-on portion is larger for drugs with higher ASPs.7
The Most Favored Nation MFN
Model interim final rule with comment period 85 FR 76180 8 hereafter, referred to as the November 2020
interim final rule was published in the Federal Register on November 27, 2020, and was effective the same day, with a 60-day comment period. The 60-day comment period on the November 2020
interim final rule closed on January 26, 2021. The November 2020 interim final rule established a 7-year nationwide, mandatory MFN Model, under section 1115A of the Act, with the model performance period beginning on January 1, 2021. The MFN Model would test an alternative way for Medicare to pay for certain Medicare Part B single source drugs and biologicals including biosimilar biologicals. For additional information on the MFN Model, see the November 2020 interim final rule and the MFN Model website.9
In the November 2020 interim final rule, Waiver of Proposed Rulemaking and Delay in Effective Date, we stated that we found that there was good cause to waive the notice and comment requirements under sections 553bB
of the Administrative Procedure Act and section 1871b2C of the Act because of the particularly acute need for affordable Medicare Part B drugs in the midst of the COVID19 pandemic 85
FR 76249.
In December 2020, while the comment period was open, four lawsuits were filed related to CMSs waivers of proposed rulemaking and delay in effective date as well as other aspects of the MFN Model and the 7 MedPAC, June 2017, Medicare Part B Drug Payment Policy Issues, accessed via http
medpac.gov/docs/default-source/reports/jun17_
ch2.pdf 8 Available at https www.govinfo.gov/content/
pkg/FR-2020-11-27/pdf/2020-26037.pdf.
9 Available at https innovation.cms.gov/
innovation-models/most-favored-nation-model.

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