509 F.Supp.3d 482
D. Md.2020Background
- On Nov. 27, 2020, HHS/CMS issued an interim final “Most Favored Nation (MFN) Rule” making Medicare Part B reimbursement for certain high‑cost drugs tied to the lowest price among selected comparator countries, effective Jan. 1, 2021.
- The MFN Model was mandatory and nationwide, initially covering the 50 highest‑spend Part B drugs and projected to cut nearly $5 billion in Year 1 and far more over seven years.
- CMS published the rule without pre‑promulgation notice‑and‑comment and invoked the APA’s “good cause” public‑interest exception, citing high drug prices and the COVID‑19 pandemic as urgency.
- Plaintiffs (including the National Infusion Center Association, Association of Community Cancer Centers, PhRMA, and others) sued on Dec. 4, 2020 and moved for a TRO/PI, alleging APA, statutory, and constitutional defects; oral argument occurred Dec. 18, 2020.
- Key practical harms alleged: steep revenue drops for provider members (risking closures), disruption or loss of access to critical therapies (e.g., Ocrevus for primary progressive MS), and loss of opportunity to influence rule content through notice and comment.
- The district court granted a nationwide temporary restraining order, principally on the plaintiffs’ likely success on their APA notice‑and‑comment claim and on irreparable harm grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction: whether 42 U.S.C. §405(h)/§1395ii bars district review | Rule arises under §1315a (different subchapter), so §405(h)/§1395ii does not preclude suit in district court | §405(h) and incorporated Medicare review bars channel claims to the Secretary and forecloses district jurisdiction | Court: Plaintiffs pleaded a colorable federal question under the APA and §1315a is in a different subchapter, so §405(h)/§1395ii does not bar jurisdiction |
| Standing (organizational/representational) | NICA and others suffer concrete organizational/member injuries (economic losses, clinic closures, patient care disruption) and procedural injury from loss of notice and comment | Government challenged standing generally | Court: NICA has representational standing—members face imminent economic and patient‑care harms and the procedural deprivation is tied to concrete interests |
| APA notice‑and‑comment / good cause exception | CMS unlawfully bypassed notice and comment; its “good cause” justification (pandemic, rising drug prices) is speculative and lacks necessary contemporaneous findings | CMS claims delay would harm public interest and waiver is justified to address urgent economic/health harms during COVID‑19 | Court: Plaintiffs likely to succeed on APA claim—agency failed to show that providing notice and comment would be contrary to the public interest; good‑cause showing was inadequate |
| TRO factors & scope (irreparable harm, balance, nationwide relief) | Plaintiffs would suffer irreparable economic and patient‑care harms and lose the chance to influence rulemaking; nationwide relief is necessary to preserve status quo | Government argues public interest favors implementation to lower drug prices and that an injunction would delay public benefit | Court: Irreparable harm shown; balance/public interest favor injunction; nationwide TRO appropriate to preserve status quo pending further proceedings |
Key Cases Cited
- Winter v. Nat. Res. Def. Council, 555 U.S. 7 (2008) (standards for preliminary injunction/TRO).
- Perez v. Mortg. Bankers Ass'n, 575 U.S. 92 (2015) (agency rulemaking procedures and notice requirement principles).
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (1983) (courts may not supply post hoc rationalizations for agency action).
- N.C. Growers' Ass'n v. United Farm Workers, 702 F.3d 755 (4th Cir. 2012) (good‑cause exception is narrow; agencies must justify bypassing notice and comment).
- Sorenson Commc'ns v. FCC, 755 F.3d 702 (D.C. Cir. 2014) (good‑cause inquiry is meticulous; agency factual findings required).
- Mack Trucks, Inc. v. EPA, 682 F.3d 87 (D.C. Cir. 2012) (public‑interest prong of good cause is narrowly construed; notice may only be excused where advance notice would defeat the proposal’s purpose).
- Jifry v. FAA, 370 F.3d 1174 (D.C. Cir. 2004) (example of good‑cause waiver in emergency national‑security context).
- Earth Island Inst. v. Ruthenbeck, 490 F.3d 687 (9th Cir. 2007) (nationwide injunction permissible where APA violation invalidates a rule of broad applicability).