MFN Drug Pricing Policy Will Hurt Patients, Physician Practices

Earlier this month, a group of gastroenterologists gathered at a scientific meeting announced that they would strongly advise their patients with inflammatory bowel disease to take the COVID-19 vaccines as they become available. Protecting our patients with chronic disease from COVID-19 is important, but there is another impending crisis that threatens access to life-saving infusion medications many of them need regularly – the Most Favored Nation Interim Final Rule recently announced by the Centers for Medicare & Medicaid Services.

In my practice near New Haven, Conn., we administer medications to treat hundreds of Medicare beneficiaries with chronic conditions like Crohn’s disease or ulcerative colitis, which are painful, medically incurable diseases that are major categories of IBD. These treatments help our patients who are suffering from life-altering symptoms such as abdominal pain, persistent diarrhea, rectal bleeding, fever and weight loss. These conditions often require hospitalizations and surgeries that lead to significant disability. Biologic infusion medications have been revolutionary in controlling these diseases and changing course in a positive direction.

The MFN proposal would slash reimbursement to physician practices and hospitals that provide the top 50 physician-administered (Part B) drugs and will be determined by the lowest price that drug manufacturers receive in any one of 22 different countries, along with a flat administration fee for each dose. These prices will put physician practices like mine at significant financial risk because the prices we acquire these products for will far exceed Medicare reimbursement.

The treatments we provide are enormously complex, and the medications can be expensive, but the price control does not apply to drug manufacturers. It impacts the hospitals, physician practices and infusion centers that purchase and provide the medications to Medicare beneficiaries and are later reimbursed.

We will likely confront a two-quarter lag from when the international price is identified and when we must scramble to acquire the product in the United States for the new reimbursement rate. Many providers are expecting they would provide these medications at a loss, as the costs will probably greatly exceed Medicare reimbursement.

The new policy is slated to go into effect nationwide on Jan. 1, less than six weeks after the rule was issued by CMS and three weeks before the comment period even ends. The MFN Rule could threaten the viability of medical practices, especially smaller groups and those in rural or underserved areas. GI practices like mine with low-cost infusion centers are particularly vulnerable.

If we are no longer able to afford to administer these drugs, our patients will be forced to get their medications in the hospital. This runs counter to policymakers’ desire to keep care out of the more expensive setting. And, we must try and keep our most vulnerable population out of hospitals until the pandemic is under control.

The MFN Rule is misdirected and cannot be allowed to go into effect. I am hopeful that the lawsuits filed in several states by provider and patient advocacy groups are successful in their request that the courts stop the MFN Rule from being implemented in less than two weeks.

If the lawsuits are unsuccessful, the MFN Rule must be stopped by CMS or Congress to protect our most vulnerable Medicare beneficiaries. This is far too serious an issue, with vast health policy and patient care implications, for CMS to have fast-tracked this rule without obtaining input from providers and patients — or even our representatives in Congress.


Dr. Latha Alaparthi is vice president of the Digestive Health Physicians Association and a practicing gastroenterologist at the Gastroenterology Center of Connecticut.

Morning Consult welcomes op-ed submissions on policy, politics and business strategy in our coverage areas. Updated submission guidelines can be found here.

Morning Consult