National Association of Manufacturers Issues Public Comment on Centers for Medicare & Medicaid Services Rule

WASHINGTON, Feb. 3 -- Robyn M. Boerstling, vice president for infrastructure, innovation and human resources policy at the National Association of Manufacturers, has issued a public comment on the Centers for Medicare and Medicaid Services rule entitled "Most Favored Nation Model". The comment was written on Jan. 26, 2021, and posted on Feb. 1, 2021:

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On behalf of the more than 14,000 members of the National Association of Manufacturers, the largest manufacturing association in the United States, the NAM submits these comments to the Department of Health and Human Services and its Centers for Medicare & Medicaid Services. The NAM is the largest manufacturing association in the United States, representing manufacturers in every industrial sector and in all 50 states. Manufacturing employs 12.2 million men and women, contributes more than $2 trillion to the U.S. economy annually, has the largest economic impact of any major sector and accounts for 62% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States.

The NAM urges CMS to withdraw the Trump Administration's improperly issued MFN Model Interim Final Rule immediately and in its entirety. The rule's effective date is currently enjoined by a federal court order in a case brought by the Biotechnology Innovation Organization in the Northern District of California (the NAM participated in that case as an amicus). This relief, however, is incomplete because it stops short of vacating the action in its entirety. The administration should move quickly to withdraw the associated proposed rule contained within the IFR as well.

The MFN Model for Medicare Part B Drugs announced in November 2020 as an Interim Final Rule was never advanced by a formal notice of proposed rulemaking normally associated with such a sweeping proposal. By designing and issuing a rule intended to be final the moment it was published, CMS set forth binding terms without any meaningful or transparent public input and instead took comments after the fact. The Trump Administration abused its regulatory powers and hid behind the ongoing COVID-19 crisis to advance an IFR unrelated to the pandemic. This approach deprived the public of a chance to participate in the rulemaking.

The proposed MFN Model is much more than a simple payment demonstration. It is a rule that requires physicians to participate in a nationwide, mandatory program under CMMI and adds new burdens to health care providers who are fully engaged in combating the effects of an unprecedented pandemic. This Part B reimbursement policy shift impacts vulnerable populations and deserved a full review by stakeholders and the public, as well as an opportunity to comment on its range of implications well ahead of its January 1 effective date. The legal remedy supported by the NAM provided important relief but does not provide a permanent solution.

The MFN Model draws on international prices for certain classes of medicines and treatments and this reference pricing approach does not present a fair or a comparable benchmark for prices in the United States. Specifically, the MFN Model leans on a grouping of 50 Medicare Part B drugs that contribute to a high percentage of Medicare Part B spending and develops a MFN pricing structure based on a formula of price-paid by any country that was an OECD member country as of October 1, 2020 and has a GDP per capita that falls at least 60 percent of U.S. GDP per capita. This model price aligns certain U.S. drug prices with countries that have government-run national health systems that operate off a dramatically different set of values and cost controls. Many of these systems differ markedly from the American market-based system that provides consumer choice and honors innovation. Grafting those approaches onto our innovative, free-market economy would be highly problematic. The results would undercut innovation, fail to reward health outcomes and neglect to address many of the most important cost drivers in our own health care system. For example, Americans enjoy greater access to more new medicines than many OECD counterparts, according to one recent PhRMA study of FDA, European and Japanese data. Additionally, cancer survival rates are higher here in the U.S. for both men and woman compared to OECD counterparts.

Manufacturers stress that the MFN Model runs counter to many of the core economic principles that drive the American economy, including innovation and the free market. Innovation and intellectual property are the lifeblood of our economy, creating fundamental incentives that drive U.S. global leadership in healthcare and broader manufacturing. Global medical innovation is inherently reliant on American patients and the market-based health system we have established. Access to a range of vaccines and treatments are available here unlike any other nation as well as a unique innovation ecosystem of hospitals, universities and drug manufacturers that seek to advance the latest research and therapies for patients of all ages impacted by various diseases, including some of the hardest to cure and the most pressing illnesses impacting public health. Research jobs within the ecosystem are some of the highest paid in manufacturing and the most competitive.

The MFN Model as designed by the Trump Administration will only complicate reimbursements to already-stressed physicians due to COVID-19, harm the delivery of quality of health care and interfere in patient-doctor relationships. Health care stakeholders should not be presented with false choices that were artificially limited as the result of an "emergency rulemaking." Instead, manufacturers urge stakeholders and CMS to work together to advance positive and workable solutions. Progress can and should be made by reforming existing programs, modernizing payment models to reward value and avoiding new government-driven demands that are in conflict with the underlaying law or contrary to basic free market principles.

Health care costs have been rising too quickly for far too long for American families. Reducing costs can be achieved in many ways, and manufacturers believe that market-based approaches offer better alternatives than government-driven solutions. The NAM stands ready to work with HHS and CMS to address our concerns and achieve the goal of reducing health care costs. Manufacturers appreciate the opportunity to request that the administration withdraw its MFN Model Interim Final Rule.

Comments Submitted by:

Robyn M. Boerstling

Vice President, Infrastructure, Innovation and Human Resources Policy

National Association of Manufacturers

733 10th Street NW, Suite 700

Washington, DC 20001

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The rule can be viewed at: https://www.regulations.gov/document?D=CMS-2018-0132-2750

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