76180 Federal Register / Vol. 85, No. 229 / Friday, November 27, 2020 / Rules and Regulations DEPARTMENT OF HEALTH AND Mail Stop C4–26–05, 7500 Security analysis using the prescription drugs HUMAN SERVICES Boulevard, Baltimore, MD 21244–1850. and countries in the MFN Model For information on viewing public suggests Medicare Part B paid at least Centers for Medicare & Medicaid comments, see the beginning of the 2.05 times as much as other higher- Services SUPPLEMENTARY INFORMATION section. income countries in 2018.3 The Centers FOR FURTHER INFORMATION CONTACT: for Medicare & Medicaid Services’ 42 CFR Part 513 Andrew York, 410–786–7400. (CMS) Center for Medicare and [CMS–5528–IFC] SUPPLEMENTARY INFORMATION: Medicaid Innovation (Innovation Inspection of Public Comments: All Center) is taking action on President RIN 0938–AT91 comments received before the close of Trump’s goal to lower drug costs and seeking to realign financial incentives Most Favored Nation (MFN) Model the comment period are available for viewing by the public, including any by implementing the Most Favored AGENCY: Centers for Medicare & personally identifiable or confidential Nation (MFN) Model as described in Medicaid Services (CMS), HHS. business information that is included in this IFC. Medicare pays substantially more ACTION: Interim final rule with comment a comment. We post all comments than other countries for many of the period. received before the close of the highest-cost Medicare Part B drugs that comment period on the following beneficiaries receive in an outpatient SUMMARY: This interim final rule with website as soon as possible after they setting for which Medicare Part B allows comment period (IFC) implements the have been received: http:// separate payment.4 In many instances, Most Favored Nation (MFN) Model, a www.regulations.gov. Follow the search Medicare pays more than twice as much new Medicare payment model under instructions on that website to view for certain drugs as other countries section 1115A of the Social Security Act public comments. (the Act). The MFN Model will test do.5, 6 This is because Medicare whether more closely aligning payment I. Executive Summary generally establishes the payment for separately payable Medicare Part B for Medicare Part B drugs and A. Purpose biologicals (hereafter, referred to as drugs using the methodology in section ‘‘drugs’’) with international prices and High drug prices are impacting the 1847A of the Act. In most cases, this removing incentives to use higher-cost wallets of Medicare beneficiaries, means payment is based on the Average drugs can control unsustainable growth especially during the Coronavirus Sales Price (ASP) plus a statutorily in Medicare Part B spending without disease 2019 Public Health Emergency mandated 6 percent add-on. Under this adversely affecting quality of care for (PHE). Increases in drug prices are methodology, the Medicare program beneficiaries. accelerating at a rate that significantly does not get the benefit of the outpaces the growth in spending on substantial discounts provided in other DATES: Effective date: These regulations other Medicare Part B services, and are effective on November 27, 2020. prices in the United States (U.S.) for comparison-us-and-international-prices-top- Comment date: To be assured most Medicare Part B drugs with the medicare-part-b-drugs-total-expenditures. consideration, comments must be highest Medicare spending far exceed 3El-Kilani Z, Finegold K, Mulcahy A, and received at one of the addresses Bosworth A. Medicare FFS Part B and International prices in other countries. Specifically, Drug Prices: A Comparison of the Top 50 Drugs. provided below, no later than 5 p.m. on drugs have consistently been a major Washington, DC: Office of the Assistant Secretary January 26, 2021. contributor to the overall Medicare Part for Planning and Evaluation, U.S. Department of ADDRESSES: In commenting, please refer Health and Human Services. November 20, 2020 B spending trend. Medicare Part B Fee- (https://aspe.hhs.gov/pdf-report/medicare-ffs-part- to file code CMS–5528–IFC. Because of For-Service (FFS) spending for b-and-international-drug-prices). staff and resource limitations, we cannot separately payable physician- 4 ‘‘Comparison of U.S. and International Prices for accept comments by facsimile (FAX) administered drugs and drugs furnished Top Medicare Part B Drugs by Total Expenditures’’ transmission. in a hospital outpatient department accessed via https://aspe.hhs.gov/pdf-report/ Comments, including mass comment comparison-us-and-international-prices-top- represented about 11 percent of medicare-part-b-drugs-total-expenditures; El-Kilani submissions, must be submitted in one Medicare Part B FFS benefit spending in Z, Finegold K, Mulcahy A, and Bosworth A. of the following three ways (please 2015, but accounted for about 37 Medicare FFS Part B and International Drug Prices: choose only one of the ways listed): percent of the change in Medicare Part A Comparison of the Top 50 Drugs. Washington, 1. Electronically. You may submit DC: Office of the Assistant Secretary for Planning B FFS benefit spending from 2015 to and Evaluation, U.S. Department of Health and electronic comments on this regulation 2020, and spending on these Medicare Human Services. November 20, 2020 (https:// to http://www.regulations.gov. Follow Part B FFS drugs increased to represent aspe.hhs.gov/pdf-report/medicare-ffs-part-b-and- the ‘‘Submit a comment’’ instructions. roughly 14 percent of Medicare Part B international-drug-prices). 5 ‘‘Comparison of U.S. and International Prices for 2. By regular mail. You may mail 1 FFS benefit spending in 2019. In Top Medicare Part B Drugs by Total Expenditures’’ written comments to the following addition to the continued growth in accessed via https://aspe.hhs.gov/pdf-report/ address ONLY: Centers for Medicare & spending, the U.S. already pays almost comparison-us-and-international-prices-top- Medicaid Services, Department of twice as much on average as other medicare-part-b-drugs-total-expenditures; El-Kilani Health and Human Services, Attention: Z, Finegold K, Mulcahy A, Bosworth A. Medicare developed countries pay. In one FFS Part B and International Drug Prices: A CMS–5528–IFC, P.O. Box 8013, analysis of 27 drugs, acquisition costs in Comparison of the Top 50 Drugs. Washington, DC: Baltimore, MD 21244–8013. the U.S. were 1.8 times higher than in Office of the Assistant Secretary for Planning and Please allow sufficient time for mailed comparator countries.2 A more recent Evaluation, U.S. Department of Health and Human comments to be received before the Services. November 20, 2020 (https://aspe.hhs.gov/ pdf-report/medicare-ffs-part-b-and-international- close of the comment period. 1 2020 Annual Report of the Boards of Trustees drug-prices). 3. By express or overnight mail. You of the Federal Hospital Insurance and Federal 6 Individual countries differ in the regulatory may send written comments to the Supplementary Medical Insurance Trust Funds. processes and standards governing approval of following address ONLY: Centers for Accessed via: https://www.cms.gov/files/document/ drugs and biologicals. Use of international drug 2020-medicare-trustees-report.pdf. prices in the MFN Model should not be interpreted Medicare & Medicaid Services, 2 ‘‘Comparison of U.S. and International Prices for to connote FDA approval or to otherwise describe Department of Health and Human Top Medicare Part B Drugs by Total Expenditures’’ any scientific or regulatory relationship between Services, Attention: CMS–5528–IFC, accessed via https://aspe.hhs.gov/pdf-report/ U.S.-approved and non-U.S.-approved products. VerDate Sep<11>2014 20:13 Nov 25, 2020 Jkt 253001 PO 00000 Frm 00002 Fmt 4701 Sfmt 4700 E:\FR\FM\27NOR2.SGM 27NOR2 jbell on DSKJLSW7X2PROD with RULES2 Federal Register / Vol. 85, No. 229 / Friday, November 27, 2020 / Rules and Regulations 76181 countries, because ASP is calculated suppliers that furnish separately billion in Medicaid 10 spending ($5.7 using only the prices that manufacturers payable Medicare Part B drugs are billion in federal payments and $4.3 charge to certain U.S.-based purchasers. physicians and non-physician billion in state payments). Overall, ASP-based payments may encourage the practitioners, supplier groups (such as a OACT estimates that the MFN Model use of more expensive drugs because the group of physicians or other will result in savings of $85.5 billion, dollar amount of the 6 percent add-on practitioners), hospital outpatient net of the associated change in the Part portion is larger for drugs with higher departments (HOPDs), including on- or B premium, in Medicare Part B ASPs.7 As MedPAC noted in its June off-campus provider-based departments spending. In addition, OACT estimates 2017 Report, ‘‘Although, in some cases, (PBDs), whether paid under the that all beneficiaries will save a total of drugs with patent protection may face outpatient prospective payment system $28.5 billion from a reduction in the competition from other brand drugs in (OPPS) or the physician fee schedule Medicare Part B premium as a result of the same therapeutic class, price (PFS), and ambulatory surgical centers the MFN Model, and will also see their competition between such products may (ASCs) paid under the ASC Payment coinsurance reduced. In the HHS Office be limited because the [Medicare] Part System. Claims from these providers of the Assistant Secretary for Planning B drug payment system is not structured and suppliers will encompass and Evaluation (ASPE) estimate, ASPE to facilitate competition among brand approximately 88 percent of the annual estimates roughly a net reduction of products with similar health effects.’’ 8 Medicare Part B spending on the drugs $87.8 billion in spending on MFN Thus, the ASP-based payment approach we selected for inclusion in the MFN Model drugs by the federal government, currently used in Medicare Part B may Model beginning in performance year 1.