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HHS Proposes Nixing Trump Rule Tying Drug Costs to Foreign Rates

Aug. 6, 2021, 8:54 PM

The Health and Human Services Department on Friday proposed to withdraw a Trump-era drug payment model tying U.S. costs to foreign prices.

The agency didn’t rule out releasing its own policy for cutting down skyrocketing medicine costs.

The proposal to withdraw the interim final rule (RIN 0938-AT91) “does not reflect any judgment by HHS regarding future policy,” the HHS said in a Federal Register release.

The Trump administration’s rule matches Medicare reimbursement for drugs administered in doctors’ offices—which are usually expensive and often for serious illnesses like cancer—to lower prices paid in other countries. The rule was finalized in 2020, but it was blocked by federal judges and paused by President Joe Biden.

The Biden administration is accepting public comments on its plan to withdraw the rule, noting that 1,166 responses were received to the interim final rule. Biden’s HHS said it “will continue to carefully consider” those comments as the agency explores “all options to incorporate value into payments for Medicare Part B drugs and improve beneficiaries’ access to evidence-based care.”

Spotlight on Drug Prices

Biden’s proposal to pull the Trump rule comes amid ongoing government efforts to curb rising drug prices.

Lawmakers recently advanced a group of bipartisan bills targeting drugmaker practices policy observers view as anticompetitive. In July Biden issued an executive order calling on the Food and Drug Administration to work with states to import prescription drugs from Canada and for the Federal Trade Commission to crack down on anticompetitive drug patent deals.

Drug companies say that lower prices are a trade-off for foreign countries who don’t get immediate access to new drugs. Critics of the payment model say it would harm U.S. patients in need of quick access to the latest medications.

To contact the reporter on this story: Ian Lopez in Washington at ilopez@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com; Alexis Kramer at akramer@bloomberglaw.com