Why Trump’s drug reimbursement cuts will immediately harm patient access

On Friday, President Trump announced the interim final rule with comment period (IFC) to implement the Most Favored Nation drug pricing model, which would tie prices of Medicare Part B drugs to the lowest prices paid in Organisation for Economic Cooperation and Development (OECD) countries. We dug into the details to explain why this “fatally flawed regulation” will endanger America’s most vulnerable patients as well as biotech innovation as the pandemic rages on. 

“The MFN Model is designed to test potential improvements to the delivery of and payment for healthcare to reduce Medicare expenditures while preserving or enhancing the quality of care for beneficiaries,” says the IFC. 

However, while the rule states “beneficiaries must continue to have access,” the details clearly show that they will not. 

1. The rule will have an immediate negative impact on seniors' access to Part B drugs. The rule attributes a portion of the estimated $85.5 billion in savings “to beneficiaries not accessing their drugs through the Medicare benefit, along with the associated lost utilization.” Specifically, the estimate assumes that due to the behavior of non-340B providers, 9% of Part B beneficiaries who use these providers will have “no access” in 2021; this increases to 14% in 2022 and 19% in 2023-2027 (page 184 of the IFC).

2. Furthermore:“[S]ome beneficiaries’ providers and suppliers may choose not to offer access to the MFN Model drugs, causing these beneficiaries to seek alternative providers, treatment alternatives, or forgo access. The financial hardship exemption is designed to mitigate this risk.” However, there will be no financial hardship exemptions in 2021 (page 214).

3. “We estimate that this IFC will have a significant impact on small rural hospitals,” they admit (page 209).

4. The model puts the burden on seniors to find access to needed therapies: “If MFN participants choose not to provide MFN Model drugs or prescribe alternative therapies instead, beneficiaries may experience access to care impacts by having to find alternative care providers locally, having to travel to seek care from an excluded provider, receiving an alternative therapy that may have lower efficacy or greater risks, or postponing or forgoing treatment. There is significant uncertainty with these potential effects of the MFN Model” (page 201).

The administration is expediting the rule’s implementation (1/1/21) due to the hardship caused by “a new surge in COVID-19 cases”—but the rule itself creates an immediate hardship for patients as many will lose access to needed therapies.

What they’re saying: This “fatally flawed regulation” is “brazen and unhinged,” say stakeholders across the health care sector. Furthermore, it will “hurt the innovation that has produced COVID vaccines,” says the Wall Street Journal editorial board. 

Dan’s Deep Dive: During the height of the pandemic, the administration is expediting a rule that will seriously harm Medicare beneficiaries’ access to lifesaving therapies. There is no reason to expedite a major change in regulation that will seriously harm access to needed therapies for America’s senior and disabled beneficiaries who rely on Medicare to keep them healthy. – Dan Durham, BIO’s EVP for Health Policy

BIO President and CEO Dr. Michelle McMurry-Heath said this rule will harm medical innovation, small biotechs, and patients in the middle of a pandemic—read her statement.

More Health Care News: 

Reuters: U.S. FDA grants emergency use authorization to Regeneron COVID-19 antibody given to Trump
“The FDA said the monoclonal antibodies, casirivimab, and imdevimab, should be administered together for the treatment of mild to moderate COVID-19 in adults and pediatric patients with positive results of direct SARS-CoV-2 viral testing and who are at high risk for progressing to severe COVID-19.” 

The New York Times: Politics, science, and the remarkable race for a coronavirus vaccine
“The furious race to develop a coronavirus vaccine played out against a presidential election, between a pharmaceutical giant and a biotech upstart, with the stakes as high as they could get.”

BIO member Genomatica has announced a new partnership to scale production of its groundbreaking renewable bio-nylon—providing a sustainable, biobased solution for the global fashion and consumer products industries.

Genomatica uses synthetic biology to “remake the world of everyday products and materials,” such as using plants and waste to produce bio-based plastics, textiles, cosmetics, and household cleaning products, to name a few. 

Earlier this year, the company announced the production of “the world’s first renewably sourced ton of the key ingredient for nylon-6, made from plants instead of crude oil” with “equivalent performance” to conventional nylon.  

Now, Genomatica has partnered with European nylon producer Aquafilto produce 50 tons of the bio-nylon—the largest quantity ever available—for use in carpet, clothing, car interiors, engineered plastics, and food packaging. 

Why it matters: The global textile industry is one of the world’s largest polluters, according to the Ellen MacArthur Foundation—and conventional nylon is a major culprit, responsible for 60 million tons of greenhouse gas emissions per year through traditional crude oil-based production. This bio-based nylon has potential to reduce emissions and waste and bolster the bioeconomy—which will be a critical element as we build back better in the wake of the pandemic.

President Trump’s Monday: No public events scheduled. 

President-Elect Biden’s Monday: He’s expected to announce more key Cabinet picks, including former Obama Deputy Secretary of State Antony Blinken as Secretary of State. Meanwhile, his COVID-19 response plans include “immediately reviving regular media briefings and giving a central role to long-sidelined career officials,” reports POLITICO. 

What’s Happening on Capitol Hill: Thanksgiving recess.