Regeneron Pharmaceuticals, a Tarrytown, New York-based biopharmaceutical company, has filed a lawsuit against the US government for a recently issued drug-pricing rule that uses a Most Favored Nation (MFN) drug-payment model that would set the price for certain prescription drugs under the US government’s Medicare healthcare program to comparable pricing in other developed countries. A federal district court in New York has issued a preliminary injunction to halt the US government from implementing the rule with respect to a Regeneron drug.

The lawsuit in New York follows separate lawsuits filed by the Pharmaceutical Research and Manufacturers of America (PhRMA) and the Biotechnology Innovation Organization (BIO) last month (December 2020) in Maryland and California, respectively. Last month (December 2020), a federal district court in California issued a preliminary injunction against the HHS in implementing the rule in the lawsuit brought by BIO. A federal district court in Maryland issued a temporary restraining order in a lawsuit filed by the Association of Community Cancer Centers, which was one of the co-litigants in the lawsuit filed by PhRMA.

The US District Court for the Southern District of New York issued a preliminary injunction in a lawsuit between and the US Department of Health and Human Services (HHS), which preliminarily enjoins the HHS from applying the Most Favored Nation Rule to Regeneron’s/Bayer’s Eylea (aflibercept), a drug for treating age-related macular degeneration, macular edema, and diabetic retinopathy.

The Most Favored Nation rule was issued last year (November 2020) by the HHS Secretary Alex Azar as part of a policy by the Trump Administration to address the cost of prescription drugs in the US. It follows up on an executive order issued by President Donald Trump in 2020 that authorized the HHS Secretary to develop and implement a rulemaking plan for the MFN model. The MFN rule is based on a drug-payment model through the Center for Medicare and Medicaid Innovation at the Centers for Medicare & Medicaid Services that lowers Medicare Part B payments for certain prescription drugs to the lowest price found in similar countries. Part B of Medicare, the US government’s health insurance program for individuals 65 or older, covers a limited number of outpatient prescription drugs that are administered in limited conditions, such as a doctor’s office, hospital, or other clinical setting. 

Under the new rule, starting this month (January 2021), the HHS will use the MFN model to test a way for Medicare to pay no more for physician-administered Medicare Part B drugs than the lowest price charged in other similar countries. The model will apply to 50 drugs and biologicals, and the test will run for seven years from January 1, 2021, to December 31, 2027.

Source: Centers for Medicare & Medicaid Services