A US federal judge in Maryland granted a temporary injunction against the Department of Health and Human Services (HHS) on Wednesday, temporarily blocking a proposed rule to reduce drug prices. The proposed “most favored nation” rule would require Medicare to reduce prices based on international prices for certain drugs, including cancer medication.
Reducing drug prices has been one of the foremost policy objectives of the Trump Administration. Here, the judge said that the proposed rule failed because the HHS rushed through the notice-and-comment rulemaking process and did not adequately collect public comments on the proposed rule. Normally, the Administrative Procedure Act (APA) requires an agency to collect and respond to public comments on promulgated rules, unless there is “good cause” to avoid the process.
The HHS argued that due to COVID-19, drug prices had rapidly increased, providing good cause to bypass the usual process. The judge disagreed, finding little evidence to back up the HHS’s assertion.
It should be noted that this injunction is likely only a temporary setback for the proposed rule. The judge stated that a “most favored nation” rule may indeed be a reasonable policy option for the HHS to adopt, as long as the agency follows proper notice-and-comment procedure in the future. Whether the HHS will continue pursuing this policy remains unclear as the Biden administration takes over, but given the bipartisan support for reduced drug prices, changes to the current regulatory model are likely.
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