United States District Court in California vacates the MFN interim final rule

By AmerisourceBergen

On Monday, December 28, 2020, the United States District Court - Northern District of California vacated the MFN interim final rule after the District Court in Maryland issued a temporary 14-day injunction just last week.

 

U.S. District of MD Judge Blake cited that the Administration had rushed implementation of the rule without providing time for public comment, a violation of the Administrative Procedure Act.

The California ruling adopted the findings issued by Judge Blake in her ruling last week. Late yesterday, California Judge Chhabria added, “While there’s nothing unlawful per se about rushing to enact policy in the final days of a presidential administration (indeed, it’s a time-honored tradition), executive branch officials may not circumvent clear legal requirements in the eleventh hour to achieve goals they couldn’t accomplish in the normal course.”

The plaintiff in this case was the California Life Sciences Association and the ruling cited that there is evidence of irreparable harm to the plaintiff’s membership if the interim rule was implemented.

With this ruling, MFN will not go into effect on January 1 as planned. While the Trump Administration has the authority to theoretically issue a new proposed rule before January 20, not only must it address Judge Chhabria’s finding of irreparable harm caused by the rule as currently constructed, the Biden Administration is also free to change whatever is issued and draft its own proposed rule. The longer-range question is what the Biden Administration will attempt to accomplish regarding prescription drug pricing – including in relation to drug pricing in other countries.

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