Northern District of California Grants Preliminary Injunction Against Most Favored Nation Rule

Posted by Danielle Sapega on December 29, 2020
Medicaid, Medicare

On December 28, 2020, the District Court for the Northern District of California granted a motion for a preliminary injunction enjoining the Centers for Medicare and Medicaid Services from implementing the Most Favored Nation Rule (the “Rule”, summarized in our December 23 post) until the notice and comment procedures required by the federal Administrative Procedures Act (“APA”) are completed. The opinion, penned by Judge Chhabria, largely adopts the reasoning of the District Court for the District of Maryland, which granted a temporary restraining order against the implementation of the Rule last week. Judge Chhabria notes that the plaintiffs are “virtually certain” to prevail on their claim that the government violated the APA, and concludes that vacating the Rule in its entirety pending completion of the notice and comment period is the only appropriate path, as enjoining its enforcement as to the plaintiffs only runs contrary to the underlying purposes of the Rule itself.  We will continue to monitor pending suits and other developments related to the Rule’s implementation.

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