By Aaron Tallent
In November 2020, the Centers for Medicare and Medicaid Services (CMS) proposed the Most Favored Nation (MFN) Model—a new payment model that would reimburse practices for high-cost Medicare Part B therapies based on the lowest price drug manufacturers receive in similar countries. Many of the nation’s leading oncologists are fighting to stop what they believe to be an extremely flawed pricing model for Medicare Part B reimbursement from going into effect and a number of lawsuits have been filed to either delay or halt its implementation.
“Tying Medicare payments to international prices will likely be very harmful for cancer clinics,” said Kristin Ferguson, DNP, RN, OCN, Senior Director of Cancer Care Delivery and Health Policy at The Association of Community Cancer Centers (ACCC), one of the organizations that has filed a lawsuit delaying the implementation of the program.
Ferguson noted that cancer drugs are more impacted than most other specialties by the MFN. If this new reimbursement model goes into effect, it could force oncology practices to choose to not provide the drugs in the MFN to patients because they are not being fully reimbursed for what they are paying the drug manufacturers.
“We care deeply about cost of care and access to quality of care and we will consistently be pushing for that,” said Clifford A. Hudis, MD, FACP, FASCO, Chief Executive Officer of the American Society of Clinical Oncology. “You have to control the cost of care, but this has to be done in a way that maximizes quality of care and reduces barriers to access to care. When you look at MFN, you see it really flunks in all three ways.”
The price of therapies can vary significantly by country based on its laws and healthcare system. Under the current Medicare Part B reimbursement model in the United States, practices generally receive payment amounts for drugs based on the manufacturer’s reported average sales price (ASP) plus a six percent markup to cover any differences in cost and associated expenses in administering the therapy.
With the MFN, practices would be reimbursed at a rate based on the lowest price paid by any country that is a member of the Organisation for Economic Co-operation and Development (OECD) and has a GDP per capita, or economic output, that is at least 60 percent of the United States’. The six percent add-on of the ASP would be replaced with a flat one.
CMS developed this model, based on analysis of the reimbursement rates of 16 OECD members with diverse healthcare systems, including Canada, France, Japan, Slovakia, Spain, and the United Kingdom.
CMS has laid out a plan for testing MFN nationwide on the 50 costliest drugs in the United States over a seven-year period starting on January 1, 2021. Of those 50 therapies, 38 are used to treat cancer and blood diseases.
“They didn’t pick the drugs based upon any medical issue or any other matter,” said Dr. Hudis. “They picked them based upon what they were spending their dollars on.”
An analysis by The National Law Review of the countries in the MFN Model found that the average MFN price for these 50 therapies was 33 percent of the ASP. If implemented, that type of reimbursement change would cause practices to struggle to provide high quality care to patients with cancer. Examples of oncology therapies included in the MFN are bevacizumab (Avastin®), cetuximab (Erbitux®), and paclitaxel (Taxol), all of which are frontline treatments for many types of cancer.
“These are drugs that are endorsed as Category 1 in the NCCN [National Comprehensive Cancer Network] and ASCO guidelines and others,” said Lucio N. Gordan, MD, President and Managing Physician of Florida Cancer Specialists & Research Institute (FCS) and a member of the board of directors for Community Oncology Alliance (COA). “So essentially, they’re curtailing our ability to treat patients with the best data that we have today.”
When Alex Azar, U.S. Department of Health and Human Services (HHS) Secretary, announced the launch of the MFN Model, he reported that it would save $85 billion over the next seven years. However, that analysis also projected that nine percent of primary Medicare beneficiaries will either “forgo” or not have access to selected therapies in the first year of the MFN, with that figure rising to 19 percent by year three. This means nearly one in five senior citizens would lose access to the best cancer treatments available over the next 36 months.
An analysis by ASCO of how the MFN would alter the use of immune checkpoint inhibitors (ICIs) in treating non-small cell lung cancer (NSCLC) Medicare beneficiaries demonstrates the harm it could cause. NSCLC patients treated with an ICI have a one-year survival rate of 70 percent compared to 55 percent for those who receive chemotherapy alone. Using CMS’ estimates on forgone care, ASCO projects that 50,032 NSCLC patients would lose access to ICIs over the MFN’s proposed seven years, resulting in 87,556 years of life lost.
At the practice level, this decline would entail physicians and oncologists informing patients that they are unable to provide a specific treatment. Patients would be referred to a hospital or cancer center, which may increase travel time. For example, Dr. Gordan’s practice is in Gainesville and the nearest cancer center is 120 miles away.
“It’s a nightmare for the patient and then there’s the break in the relationship between the patient and the long term physician or oncologist,” said Dr. Gordan.
Another major concern amongst oncologists is that CMS is planning to implement the MFN without having piloted it in a small, representative number of oncology practices first to evaluate its benefit to patient care, as well as reveal any unforeseen circumstances. In essence, the agency intended to dramatically change the amount it reimburses every healthcare provider nationwide for the country’s most expensive drugs and gave them less than six weeks to prepare for it.
“You have to test the airplane before it flies with people inside,” said Dr. Gordan.
Four lawsuits have been filed against HHS on this matter and three of them have been successful in delaying MFN’s implementation. On December 23, 2020, the U.S. District Court for the District of Maryland issued a temporary restraining order blocking CMS from launching the program on January 1 as part of the lawsuit filed by the ACCC, the Pharmaceutical Research and Manufacturers of America, the Global Colon Cancer Association, and National Infusion Center Association.
The lawsuit asserts that CMS exceeded its statutory authority and did not follow required rulemaking procedures in issuing the MFN Interim Final Rule.
Before the end of 2020, the Southern District of New York issued a preliminary injunction prohibiting HHS from applying the MFN Rule to Regeneron’s drug aflibercept (EYLEA®) and the Northern District of California issued a preliminary injunction prohibiting HHS from implementing the rule altogether through a lawsuit filed by Biotechnology Innovation Organization.
When HHS did not appeal the latter ruling, ACCC stayed its lawsuit as part of an agreement where CMS cannot implement the MFN without considering public comments and issuing a final rule that provides at least 60 days notice between publication and implementation. If CMS does issue a final rule, then ACCC and others can resume their lawsuits.
Ferguson stated that the ACCC wanted to delay the model to allow more time for comments and to allow people to express their concerns that this is going to harm patients directly by possibly preventing them from getting their medications that are recommended by their oncologists. “We also wanted to allow more time to analyze how it could impact the cancer care landscape as a whole if providers like small rural clinics or small private practice offices are unable to be reimbursed the way that they have been in the past,” she said.
With the new Biden Administration, the future of the MFN remains uncertain. In the meantime, many organizations, including ACCC and ASCO, will or already have submitted comments to CMS opposing it before the January 26, 2021 deadline.