A federal judge in Maryland on Wednesday ruled the Trump administration would have to wait to implement a demonstration to tie Medicare outpatient drug pay to drug prices in foreign countries.
The demonstration was supposed to start on Jan. 1, but U.S. District Judge Catherine Blake issued a temporary restraining order on the policy for 14 days. The ruling stems from a lawsuit filed by the Pharmaceutical Research and Manufacturers of America, Association of Community Cancer Centers, the Global Colon Cancer Center Association and National Infusion Center Association to stop the policy.
Blake said the challengers' arguments that the Trump administration had illegally expedited the regulatory process on the so-called most-favored nation rule were convincing. A proposed version of the policy languished at the White House budget office for a year and a half, but the Trump administration in November claimed that the COVID-19 pandemic created a sense of urgency to immediately finalize the policy, which was announced in November.
"An agency may not dispense with notice and comment procedures merely because it wishes to implement what it sees as a beneficial regulation immediately," Blake wrote.
The potentially severe economic harm to healthcare providers due to lower reimbursement rates and little time to renegotiate contracts proved reason enough to stop the policy.
"The rule at issue threatens not just to harm the livelihoods of healthcare providers, but also to shutter community-based healthcare facilities, without which many patients may have to travel long distances to obtain medical care," Blake wrote.
The restraining order applies nationwide. CMS' proposed demonstration would apply nationally and be mandatory.
The PhRMA lawsuit is one of several legal challenges to the policy, which would put the financial responsibility of absorbing lower Medicare reimbursement or negotiating lower drug prices on healthcare providers.