Washington Healthcare Update

by McGuireWoods LLP

This Week: CMS Releases Three Documents on Biosimilar Reimbursement... SCOTUS: Agencies, Not State Courts, in Charge of Medicaid Rate Setting... HHS OIG and Treasury IG Release Report on ACA’s Advanced Premium Tax Credits.

1. Congress


District Work Period – No Legislative Activity

The House was not in session this week. Congress will return from a two-week recess on April 13. The House of Representatives calendar for 2015 can be found here.


State Work Period – No Legislative Activity

The Senate was not in session this week. Congress will return from a two-week recess on April 13. The Senate calendar for 2015 can be found here.

Bipartisan Letter to Preserve Community Health Center Funding

On March 30, Senators Debbie Stabenow (D-MI) and Roger Wicker (R-MS), along with 58 other senators, sent a letter to Senate Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies Chairman Roy Blunt (R-MO) and Ranking Member Patty Murray (D-WA), urging them to continue national financial support for community health centers. In the letter, the bipartisan senators requested continued funding from the appropriators, explaining that the potential mandatory cuts at the end of this fiscal year could result in site closures and prevent millions of people in high-need communities from accessing cost-effective, primary care services. “As Congress works to improve access to care and reduce health-care expenditures, we urge the Subcommittee to support Health Centers, allowing them to continue to provide cost-effective primary care,” the letter said. The discretionary account for community health center funding amounts to $1.5 million this year; this fund is separate from the $7 billion in mandatory two-year funding for community health centers that is included in the SGR bill the Senate is expected to pass later this month. As it stands, community health centers could have their funding cut by nearly 70 percent at the end of the fiscal year in September. Health Centers are the health-care home for more than 23 million patients, including nearly seven million children and more than 268,000 veterans. These centers employ more than 156,000 Americans, and generate an economic impact and overall cost savings of over $24 billion.

2. Administration

DOL, HHS and Treasury Delay Implementation of New Summary of Benefits and Coverage Templates Until 2017

The Department of Health and Human Services (HHS), the Treasury Department and the Department of Labor (DOL) released a frequently asked questions document (FAQ) March 30 noting of their intention to delay implementation of a revised summary of benefits and coverage (SBC) templates until the beginning of the 2017 plan year; the revised SBC templates would include details on plans sold in open enrollment periods in the fall of that coverage year. As is currently proposed, the revised template requires group health plans and health insurers to provide summaries of benefits and coverage that “accurately [describe] the benefits and coverage under the applicable plan or coverage” during open enrollment periods. A notice of proposed rule-making issued in December would have required new summary regulations, templates and associated documents to begin being used as of Sept. 1, 2015. Moreover, the FAQ document says the agencies expect plan summary templates to be finalized by the agencies as early as January 2016. “The Departments are fully committed to updating the template and associated documents (including the uniform glossary) to better meet consumers’ needs as quickly as possible,” the FAQ says. Moreover, the FAQ notes that agencies plan to use consumer testing and give members of the public an opportunity to provide additional input before finalizing the template.

CMS Seeks Comments on QHP Requirements for Provider Networks and Prescription Drug Formularies

The Centers for Medicare and Medicaid Service (CMS) released a collections notice seeking comments on the requirement that qualified health plans (QHPs) publish machine-readable data on provider networks and prescription drug formularies, a function that aids consumers in comparing qualified health plans in the federal marketplace. In a notice published in January, CMS commanded insurers who sell plans through the federal exchange that beginning in the 2016 plan year, QHPs must publish information regarding their formulary drug lists and provider directories on their websites in a format and at times to be announced by the Department of Health and Human Services (HHS). Moreover, the published notice also solicits feedback on guidelines for exchange navigator grant programs, specifically feedback on the progress reports required of exchange navigator programs. A program developed under the Affordable Care Act (ACA), CMS awards navigator grants to individuals and groups that assist customers in selecting plans in the state and federal exchanges.

CMS Releases Bulletin on Retirement of Transitional Medical Assistance (TMA) and Qualifying Individuals (QI) Programs

The Centers for Medicare and Medicaid Services (CMS) released an informational bulletin April 1 to provide information to state Medicaid agencies on the impact of the sunset of Transitional Medical Assistance (TMA) and the Qualifying Individuals (QI) programs, which became effective on April 1, 2015. The six- to 12-month TMA program is covered under Section 1925 and Section 1902(e)(1)(B) of the Social Security Act and requires states to provide certain families with continued Medicaid coverage for a designated six- to 12-month period after the family becomes income ineligible. Originally authorized under the Family Support Act of TMA and extended numerous times, the six- to 12-month program expired on April 1. The bulletin clarifies that the sunset does not disrupt coverage for families already receiving support under Section 1925 TMA and does discontinue future eligibility for Section 1925 TMA if in the future the sunset is lifted by subsequent legislation. The four-month extension under Section 1902(e)(1)(A) remains available and does not have a sunset date. Like the TMA program, the Qualifying Individuals program (QI) has been extended numerous times. In the absence of an extension, states will not be required to discontinue their payment of Part B premiums for QI beneficiaries; however these payments will no longer be eligible for federal reimbursement from CMS unless and until the program is reauthorized.

FDA Releases Long-awaited Final Abuse Deterrent Opioid Guidance

The Food and Drug Administration (FDA) released its final guidance April 1 on evaluation and labeling of abuse-deterrent opioids, ahead of a June 1 deadline set by Congress. While drugs with abuse-deterrent properties are not “abuse-proof,” FDA sees this guidance as an important step toward balancing appropriate access to opioids for patients with pain with the importance of reducing opioid misuse and abuse. The document, entitled “Guidance for Industry: Abuse-Deterrent Opioids — Evaluation and Labeling,” lays out three premarket studies that should generally be performed to demonstrate the abuse deterrence properties of a new opioid drug and the general characteristics of post-market studies to show whether a product actually leads to meaningful reductions in abuse and misuse of the medication. The guidance described what is required for labeling language that allows manufacturers to claim the opioid is indeed abuse-deterrent. The final guidance does not address generic versions of abuse-deterrent opioids, but the agency plans to release draft guidance for generic products later this year. Abuse-deterrent opioids are designed to make it harder to manipulate the drugs — such as being crushed and swallowed, crushed and smoked, crushed and snorted or dissolved and injected — to make abuse of the medications more difficult, or “make abuse of the manipulated product less attractive or rewarding.” FDA is also clear in the guidance that these products make the drugs more difficult to abuse only in specific ways, thereby meaningfully deterring abuse, rather than preventing abuse all together.

NIH Team Announced for POTUS’s Precision Medicine Initiative

On March 30, the National Institutes of Health (NIH) announced the formation of a Working Group of the Advisory Committee to the NIH Director (ACD) that will deliver a preliminary report in September 2015 to develop the President’s Precision Medicine Initiative. The Precision Medicine Initiative is a research consortium that will create a cohort of 1 million people who would share information about their lifestyles and health to help researchers understand how to individualize prevention and treatment. The Working Group will help define what can be learned from a study of this scale and scope, what issues will need to be addressed and considered as part of the study design, and what success would look like five and 10 years out. In addition to a team of research experts, the Working Group will include ex-officio members from the U.S. Department of Defense, U.S. Department of Veteran Affairs, U.S. Food and Drug Administration, Health and Human Services Office of the National Coordinator for Health Information Technology, and White House Office of Science and Technology Policy. As it stands, the ACD advises the NIH Director on policy matters important to the NIH mission of conducting and supporting biomedical and behavioral research, research training and translating research results for the public. More information and a list of Working Group members can be found at nih.gov.

CMS Releases Three Documents on Biosimilar Reimbursement

Three documents released March 30 outline how the Centers for Medicare and Medicaid Services (CMS) will pay for biosimilars in Part B, Part D and Medicaid. The Food and Drug Administration (FDA) on March 6 approved the first biosimilar. The documents suggest that CMS plans to place biosimilars and their reference biopharmaceuticals in separate Part B billing codes, and in Part D, plans would have to get CMS approval before replacing biopharmaceuticals with biosimilar versions. While documents provided some detail on the future of reimbursements, CMS did not address some aspects of payment, including that Medicare will pay for biosimilars administered in hospital outpatient departments under Part B. CMS says it has yet to determine whether it will place multiple biosimilars based on the same reference product in the same billing codes. Further, one of the documents also included suggestions for how states can save money with biosimilars in their Medicaid programs. The Affordable Care Act (ACA) included a measure to avoid discouraging physicians from using biosimilars without grouping biosimilars and reference biologics in the same billing codes and directs Medicare to pay doctors 6 percent of the higher reference biologic prices for administering biosimilars.

Links to the documents can be found below:

CMS Enrollment Report Shows 36,000 Signed Up for Coverage During Special Enrollment Period

In an April 1 press release, the Department of Health and Human Services (HHS) announced that as of March 29, only 36,000 people have signed up for coverage so far during the special enrollment period the agency created for people to get health insurance on HealthCare.gov to avoid tax penalties, a consequence of the individual mandate within the Affordable Care Act (ACA). To qualify for special enrollment, consumers must self-attest that they paid a penalty for not having coverage in 2014, are not enrolled in a plan on HealthCare.gov for 2015 and found out about their penalty only when they filed returns. As many as 6 million Americans are expected to pay a penalty for not having coverage in 2014, according to Obama administration projections. The special enrollment window was launched March 15 and concludes April 30 in the 37 states that rely on the federal exchange, and several states running their own exchanges have also announced special enrollment periods.

NIH National Cancer Institute Names New Acting Director

On April 1 in an official announcement, the National Cancer Institute named Doug Lowry, M.D., as the new Acting Director of the National Cancer Institute (NCI). Dr. Lowy has served as NCI’s deputy director since July 2010. Dr. Lowy, a cancer researcher for more than 40 years, received the National Medal of Technology and Innovation from President Obama in 2014 for his research that led to the development of the human papillomavirus (HPV) vaccine. Dr. Lowy received his medical degree from New York University School of Medicine, trained in internal medicine at Stanford University and studied dermatology at Yale University. “We are fortunate to have a scientist of such stature stepping into the role of Acting Director of the NCI,” said National Institutes of Health (NIH) Director Francis Collins. “Dr. Lowy possesses not only a sharp intellect, deep knowledge of science, and proven leadership experience, but he takes a warm and humane approach to all things. He is superbly positioned to lead the NCI at a time of exceptional progress in cancer research.” NCI is one of the 27 Institutes and Centers that compose NIH. NIC leads the National Cancer Program and the NIH’s efforts to dramatically reduce the prevalence of cancer and improve the lives of cancer patients and their families, through research into prevention and cancer biology, the development of new interventions and the training and mentoring of new researchers.

3. State Activities

SCOTUS: Agencies, Not State Courts, in Charge of Medicaid Rate Setting

On March 31, the Supreme Court ruled in a 5-4 vote that providers cannot sue states over Medicaid rates, arguing that the Department of Health and Human Services (HHS) handles rate setting, and the law on rate setting is too broad for federal courts to take up. The 9th U.S. Circuit Court of Appeals had previously ruled in 2013 that the providers could sue. In the case, Armstrong v. Exceptional Child Center, five Idaho Medicaid providers sued the Idaho Department of Health and Welfare after the state failed to increase payment rates, despite studies by the department showing providers’ costs were greater than the Medicaid rates. In the late 2000s, state officials recommended increases in reimbursement rates, but they were never implemented because the Idaho legislature declined to appropriate funds. The providers sued the state in 2009, accusing it of maintaining reimbursement rates that were too low and did not keep up with their rising costs for delivering medical care. Specifically, the providers claimed that the state violated Medicaid’s equal-access provision — the §30(A) provision — which requires states to pay providers at rates that “are sufficient to enlist enough providers so that care and services are available under the plan at least to the extent that such care and services are available to the general population in the geographic area.” In a dissenting opinion, Justice Sonia Sotomayor said the ruling would have “real consequences” because previously when a state set rates too low, it could be held accountable by the providers directly affected. The medical providers had noted that similar litigation in other states, including Illinois and Oklahoma, has been allowed ever since Medicaid was introduced in 1965. The high court split along non-ideological lines. Liberal Justice Stephen Breyer joined four conservatives in the majority, and conservative Anthony Kennedy joined the other liberals in dissent.

New Mexico Opts for Federal Exchange Platform Due to High Costs of Exchange Technology

In a decision March 31 by New Mexico’s Health Insurance Exchange (NMHIX) Board of Directors, the state has opted to forgo building its own exchange technology and instead will lease the HealthCare.gov platform from the Centers for Medicare and Medicaid Services (CMS). The long-awaited decision comes after months of evaluation and a recent denial for federal funding by the Department of Health and Human Services (HHS) for funding for the technology development. The state estimated that constructing its own enrollment platform would cost approximately $118 million between 2015 and 2019, whereas utilizing HealthCare.gov through a lease with CMS would cost only $79 million. Exchange CEO Amy Dowd said that CMS has verbally committed to the arrangement and has assured New Mexico it will still be considered a state-based exchange (and not at risk in a King v. Burwell decision).

Tennessee Legislature Committee Ends Revival of Medicaid Expansion Efforts in State

GOP Gov. Bill Haslam’s proposed alternative Medicaid expansion plan, Insure Tennessee, was rejected for a second time March 31 by the state’s Senate Commerce and Labor Committee after six Republican committee members voted no and only two — including the committee’s lone Democrat — voted yes on the resurrected and retooled plan (SB 72) to use federal Medicaid dollars under the Affordable Care Act (ACA); the ninth senator, physician Mark Green (R), abstained. The resolution failed last month in the Republican-dominated Senate Health Committee on the third day of a special legislative session called by Haslam to discuss the Medicaid expansion plan. Among the changes to the retooled proposal were a lockout provision for six months if beneficiaries did not pay insurance premiums and holding off implementation until the Supreme Court ruled in King v. Burwell. Overall, it’s the fourth time a Senate committee has voted on the bill; there have been no votes in any House committee. The House version (HB 61) of the plan is still palpable, although the likelihood of Insure Tennessee’s becoming law this year is very low; as it stands, the plan sought to extend health insurance coverage to an estimated 280,000 Tennesseans.

Hawaii House Legislative Committees Pull $28 Million Debt Plan from Health Connector Bill

Hawaii’s House of Representatives Committees on Health and Commerce and Consumer Protection approved a bill March 25 that allows continued operations of the state’s health insurance exchange, Hawaii Health Connector, but removed part of the proposal that would allow the exchange to issue $28 million in debt financing. The Committee’s decision came after concerns were raised about the plan, including the idea that the state would back the debt using its reserve fund. Hawaii Health Connector CEO Jeff Kissel says that if the debt-financing plan isn’t approved, customers won’t lose their coverage; however the provision would effectively stop the exchange from enrolling new customers. The Hawaii Health Connector needs approximately $28 million to maintain its operations through 2022, according to the latest sustainability plan; at that point, it’s expected to break even and begin paying off through its revenues the loan interest estimated at $4 million. Worth noting, the Committee moved the debt financing language to its committee report, so that it would be available for the Finance committee to consider. As part of the Affordable Care Act (ACA), Hawaii is one of 16 states and the District of Columbia that have their own state-based exchange.

HHS Audit of Maryland Insurance Exchange Finds $28.4 Million in Improper Billing

A Department of Health of Human Services Office of the Inspector General (OIG) audit of Maryland’s health insurance exchange, Maryland Health Connection, found that the state improperly billed the federal government $28.4 million as a result of its exchange technology failure during the state’s first open enrollment period. The Centers for Medicare and Medicaid Services (CMS) reimbursed states based on the number of people they enrolled in the coverage expansion; the report found that the Maryland exchange substantially overestimated the number of beneficiaries who would enroll in coverage through the exchange, and while the state did adjust the numbers down after its website crashed, it still invoiced HHS for the original amount. The Office of the Inspector General (OIG) report recommends that the state repay the money, although it found no evidence of fraud. The agency also recommended that the state amend its Cost Allocation Plan and the Advance Planning Document for the period for the last half of 2014 so that allocated costs correspond to the relative benefits received, develop a written policy that explains how to calculate cost allocations, and oversee operations to ensure the identification and correction of enrollment projection errors.

4. Regulations Open for Comment

FDA Assessing the Center of Drug Evaluation and Research’s Safety-Related Regulatory Science Needs and Identifying Priorities

On March 19, the Food and Drug Administration (FDA) announced the availability of a report entitled "Assessing CDER’s Drug Safety-Related Regulatory Science Needs and Identifying Priorities." This report identifies drug safety-related regulatory science needs and priorities related to the mission of FDA’s Center for Drug Evaluation and Research (CDER) that would benefit from external collaborations and resources. FDA hopes to foster collaborations with external partners and stakeholders to help address these needs and priorities. This notice asks stakeholders conducting research related to these needs to describe that research and indicate their interest in collaborating with FDA to address safety-related research priorities. Since publication of the 2011 "Identifying CDER’s Science and Research Needs" report, FDA has been engaged in efforts to further assess and prioritize the needs articulated therein. As part of these efforts, CDER’s Safety Research Interest Group (SRIG), a subcommittee of the Science Prioritization and Review Committee, assessed CDER’s overall drug safety-related regulatory science needs in view of FDA’s ongoing research efforts and highlighted areas that would benefit from additional resources and collaboration. Public comments will be accepted at any time. However, the public is encouraged to submit comments by May 18, 2015, to ensure FDA consideration.

National Coverage Determinations Proposed for Removal

On Aug. 7, 2013, the Centers for Medicare & Medicaid Services (CMS) published a Federal Register notice (78 FR 48164-69), updating the process used for opening, deciding or reconsidering national coverage determinations (NCDs) under the Social Security Act (the Act). The notice replaced the Sept. 26, 2003, Federal Register notice (68 FR 55634) and further outlined an expedited administrative process, using specific criteria, to remove certain NCDs older than 10 years since their most recent review. On March 18, CMS announced its list of NCDs proposed for removal, along with the relevant portion of the Federal Register notice containing the CMS criteria. CMS is soliciting public comment through April 17 on whether any or all of these NCDs should be removed or retained. CMS expects to publish a finalized list by fall 2015. Local Medicare Administrative Contractors (MACs) will be able to determine coverage for items and services that were previously determined by removed NCDs. View the proposed rule: www.cms.gov.

HHS Releases Proposed Rules on EHR Incentive Programs and Health IT Certification Criteria

The U.S. Department of Health and Human Services (HHS), Centers for Medicare & Medicaid Services (CMS) and Office of the National Coordinator for Health Information Technology (ONC) announced March 20 the release of the Stage 3 notice of proposed rulemaking for the Medicare and Medicaid Electronic Health Records (EHRs) Incentive Programs and 2015 Edition Health IT Certification Criteria to improve the way electronic health information is shared and ultimately improve the way care is delivered and experienced. The proposed rules aim to give providers additional flexibility, make the program simpler, drive interoperability among electronic health records and increase the focus on patient outcomes to improve care.

Specifically, the Meaningful Use Stage 3 proposed rule issued by CMS specifies new criteria that eligible professionals, eligible hospitals and critical access hospitals must meet to qualify for Medicaid EHR incentive payments; the rule also proposes criteria that providers must meet to avoid Medicare payment adjustments (Medicaid has no payment adjustments) based on program performance beginning in payment year 2018. Moreover, the 2015 Edition Health IT Certification Criteria proposed rule aligns with the path toward interoperability — the secure, efficient and effective sharing and use of health information — identified in ONC’s draft shared Nationwide Interoperability Roadmap. The proposed rule also builds on past editions of adopted health IT certification criteria, and includes new and updated IT functionality and provisions that support the EHR Incentive Programs’ care improvement, cost reduction and patient safety across the health system.

Under the Health Information Technology for Economic and Clinical Health Act, doctors, health care professionals and hospitals, including critical access hospitals, can qualify for Medicare and Medicaid incentive payments when they adopt and meaningfully use health IT technology certified by ONC. The Stage 3 proposed rule may be viewed here, and the comment period ends on May 29, 2015. The 2015 Edition proposed rule may be viewed here and the comment period ends on May 29, 2015. The Draft 2015 Edition Certification Test Procedures may be viewed at HealthIT.gov, and the comment period ends on June 30, 2015.

Use of an Electronic Informed Consent in Clinical Investigations: Questions and Answers; Draft Guidance for Industry, Clinical Investigators and Institutional Review Boards

The Food and Drug Administration (FDA or the Agency) is announcing the availability of draft guidance for industry, clinical investigators and institutional review boards, entitled “Use of Electronic Informed Consent in Clinical Investigations: Questions and Answers.” The guidance provides recommendations for clinical investigators, sponsors and institutional review boards (IRBs) on the use of electronic media and processes to obtain informed consent for FDA-regulated clinical investigations of medical products, including human drug and biological products, medical devices and combinations thereof. Although public comments will be accepted any time, to ensure that the Agency considers your comment on this draft guidance before it begins work on the final version of the guidance, submit either electronic or written comments on the draft guidance by May 8, 2015.

FDA: Reprocessing Medical Devices in Health Care Settings: Validation Methods and Labeling

On March 12, FDA announced new actions to enhance the safety of reusable medical devices and address the possible spread of infectious agents between uses. The new recommendations are outlined in a final industry guidance aimed at helping device manufacturers develop safer reusable devices, especially those devices that pose a greater risk of infection. Medical devices intended for repeated use are commonplace in health care settings. They are typically made of durable substances that can withstand reprocessing, a multi-step process designed to remove soil and contaminants by cleaning and to inactivate microorganisms by disinfection or sterilization. While the majority of reusable devices are successfully reprocessed in health care settings, the complex design of some devices makes it harder to remove contaminants. FDA’s guidance document, titled “ Reprocessing Medical Devices in Health Care Settings: Validation Methods and Labeling ,” includes recommendations medical device manufacturers should follow pre-market and post-market for the safe and effective use of reprocessed devices. A device manufacturer’s reprocessing instructions are critical to protect patients against the spread of infections. As part of its regulatory review for reusable medical devices, the FDA reviews the manufacturer’s reprocessing instructions to determine whether they are appropriate and able to be understood and followed by end users. The guidance lists six criteria that should be addressed in the instructions for use with every reusable device to ensure users understand and correctly follow the reprocessing instructions.

Compounding of Human Drug Products Under the Federal Food, Drug, and Cosmetic Act; Establishment of a Public Docket

On March 9, FDA announced it is establishing a public docket to receive information, recommendations and comments on matters related to the Agency’s regulation of compounding of human drug products under sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act (FD&C Act). Section 503A of the FD&C Act describes the conditions that must be satisfied for human drug products compounded by a licensed pharmacist or licensed physician to be exempt from certain sections of the FD&C Act. Previously, the conditions of section 503A of the FD&C Act also included restrictions on the advertising or promotion of the compounding of any particular drug, class of drug or type of drug and the solicitation of prescriptions for compounded drugs. These provisions were challenged in court and held unconstitutional by the U.S. Supreme Court in 2002.

On Nov. 27, 2013, President Obama signed the Drug Quality and Security Act (DQSA), which contains important provisions relating to the oversight of human drug compounding. This new law removes from section 503A of the FD&C Act the provisions that had been held unconstitutional by the U.S. Supreme Court in 2002. By removing these provisions, the new law clarifies that section 503A of the FD&C Act applies nationwide. In addition, the DQSA adds a new section, 503B, to the FD&C Act that creates a new category of “outsourcing facilities.” Outsourcing facilities, as defined in section 503B of the FD&C Act, are facilities that meet certain conditions described in section 503B, including registration with FDA as an outsourcing facility. This docket is intended for general comments related to human drug compounding that are not specific to documents or issues that are the subject of other dockets. Comments may be submitted to this docket at any time.

FDA Solicits Comments on New Methodologies for Generic Drug Clinical Studies

In a notice released March 5 by the Federal Register, the Food and Drug Administration (FDA) is seeking feedback from stakeholders on possible new methodologies for generic drug clinical studies and ways to demonstrate bioequivalence as part of its regulatory science priorities for 2016 under Generic Drug User Fee Amendments (GDUFA). FDA noted it will take feedback from stakeholders into account when creating next year’s regulatory science plan for generic drugs. A public hearing has been scheduled for June 5, where FDA plans to hear from stakeholders on six specific areas including scientific or technical advancements that would help that currently limit generics’ availability, innovative approaches to preapproval development of generic drugs, advancements in scientific approaches to evaluate therapeutic equivalence of generic drugs through later stages of their lifecycle. The agency’s efforts come as House and Senate lawmakers are also looking at ways to revamp clinical trial design, though up to now they haven’t focused on generic drug-specific issues, and identification of high-impact public health issues involving generic drugs, among others. The notice comes as the House of Representatives 21st Century Cures discussion legislative draft also seeks to revamp clinical trials by allowing trial sponsors to propose incorporating adaptive trial designs for alternative statistical methods into proposed clinical trials and streamlining the institutional review board.

FDA Reopens Comment Period for Generic Drug Labeling Rule

In an announcement Feb. 17, the Food and Drug Administration (FDA) revealed that it has formally re-opened the comment period for a controversial generic drug labeling proposed rule and will hold a public meeting next month to address concerns with the rule and possible alternatives. The rule, which FDA proposed in 2013, would allow generic drugmakers to unilaterally update safety information and would require generic drugmakers to modify their labels independently of their brand-name counterparts, something that only brand-name drugmakers can currently do before receiving agency permission. The FDA proposed the rule in response to a 2011 U.S. Supreme Court decision that federal law does not permit generic drugmakers to make such changes independently and, therefore, they should not be held accountable for a failure to warn against a risk. Stakeholders will have until April 27 to comment on the proposed rule; the agency’s public hearing to receive more input from stakeholders will be held on March 27 from 8 a.m. to 5 p.m. at FDA’s White Oak campus.

FDA Releases Five Draft Guidance Documents on Drug Compounding

On Feb. 13, U.S. Food and Drug Administration (FDA) issued five draft guidance documents related to drug compounding and repackaging that will help entities comply with important public health provisions; guidance will be applicable to pharmacies, federal facilities, outsourcing facilities and physicians and comes as an outcrop of the Drug Quality and Security Act (DQSA), enacted by Congress in November 2013, in response to a deadly fungal meningitis outbreak that was linked to contaminated sterile compounded drug products. Specifically, the documents include potential direction on outsourcing facility registration, outsourcing facility adverse event reporting, drug repackaging, mixing, diluting and repackaging biological products, and a draft Memorandum of Understanding (MOU) with the states. The draft guidance documents are available for public comment until May 14, while draft comment for the draft MOU is open until June 13.

FDA Releases Draft to Streamline Experimental Drug Applications

On Feb. 4, the Food and Drug Administration (FDA) released draft guidance, entitled Individual Patient Expanded Access Applications: Form 3926, for a new, shorter application for patient access to experimental drugs. The draft comes in response to concerns that the existing process for “compassionate use” for experimental drug applications was too arduous. In the guidance, FDA says the newly proposed form would take doctors 45 minutes to complete whereas the existing form is estimated to take 100 minutes. Under the old system, FDA required that a “cover sheet” be included with any IND submission, known as Form 1571. However, that form was originally intended to be used by companies involved in drug development, not physicians, who submit the vast majority of expanded access requests. FDA said it was “concerned” that some physicians might not understand how to complete that cover sheet “and associated documents because it is not tailored to requests for individual patient expanded access.” Peter Laurie, FDA’s associate commissioner for public health strategy and analysis, said the changes would greatly simplify the compassionate use process. The old form “called for 26 separate types of information and seven attachments,” he noted. “The new form calls for a small fraction of that. The new draft form, when finalized, will require only eight elements of information and a single attachment.” The changes announced by the agency are expected to affect a significant number of patients each year; in 2014, FDA processed 1,758 single patient investigational new drug applications and emergency investigational new drug applications—97 percent of all expanded access requests. Comments and suggestions for the draft document should be submitted by April 13, 2015.

5. Reports

MedPAC April Meeting Summary

On April 2-3, the Medicare Payment Advisory Commission (MedPAC) convened a series of meetings on Medicare payment policy. MedPAC is an independent congressional agency established by the Balanced Budget Act of 1997 (P.L. 105-33) to advise the U.S. Congress on issues affecting the Medicare program. The Commission meets publicly in Washington, DC, to discuss Medicare issues and policy questions and to develop and approve reports and recommendations to the Congress. At these meetings, staff present research and policy options for the Commissioners to discuss.

The meeting consisted of seven individual sessions:

  • Hospital short-stay policy issues
  • Polypharmacy and Medicare beneficiaries with a focus on opioid use in Part D
  • Sharing risk in Medicare Part D
  • Measuring low-value care
  • Using episode bundles to improve the efficiency of care
  • Bundling oncology services
  • Synchronizing Medicare policy across payment models

For more information, please visit www.medpac.gov.

HHS OIG and Treasury IG Release Report on ACA’s Advanced Premium Tax Credits

On April 1, the Department of Health and Human Services Office of the Inspector General (OIG) and Treasury Inspector General for Tax Administration (TIGTA) jointly released a report that focuses on the accounting structure for the Affordable Care Act’s (ACA) advanced premium tax credits (APTC); the oversight agencies found that about $11 billion was allotted for subsidies in FY 2014 and about $15.5 billion was spent for calendar year 2014. Moreover, in 2015, $18.9 billion of the Centers for Medicare and Medicaid Services’s (CMS) $31.5 billion fiscal 2015 funding is allocated for tax credits. In analyzing the accounting structure, the inspectors general found that various agencies and departments involved — including the Internal Revenue Service (IRS), Treasury, HHS, CMS and the Office of Management and Budget (OMB) — looked at three options, but ultimately agreed that creating an allocation account for CMS to obligate and disburse funds for the APTC was the best approach; effectiveness of these APTCs is dependent upon the CMS’s ability to reliably validate invoiced charges submitted by health insurance issuers to the CMS prior to certifying the payments. Also critical to the overall effectiveness of the APTC payment process is the IRS’s ability to subsequently identify and address incorrect APTC payments when taxpayers file their tax returns. This oversight review is one of the two reports that will evaluate the effectiveness of the process for the financial accounting of the premium tax credits and review the rationale for determining how to establish programmatic control over APTCs.

CDC: Use of Behavioral Therapy, Medication and Dietary Supplements for ADHD in Children

On April 1, the Centers for Diseases Control (CDC) released a study that found that among Attention Deficit Hyperactivity Disorder (ADHD)-diagnosed children aged 4-17 years, about four in 10 children were treated with medication alone, one in 10 received behavioral therapy alone, three in 10 were treated with both medication and behavioral therapy, and one in 10 received neither medication nor behavioral therapy in 2009-2010. Moreover, only about one in 10 children took dietary supplements for ADHD during that time period. The CDC study, “Treatment of Attention-Deficit/Hyperactivity Disorder among Children with Special Health Care Needs,” provides a snapshot into how ADHD was treated just before the release of the 2011 clinical guidelines for treatment of ADHD from the American Academy of Pediatrics (AAP). “We do not know what the long-term effects of psychotropic medication are on the developing brains and bodies of little kids. What we do know is that behavioral therapy is safe and can have long-term positive impacts on how a child with ADHD functions at home, in school, and with friends,” said CDC Principal Deputy Director Ileana Arias. “Because behavioral therapy is the safest ADHD treatment for children under the age of 6, it should be used first, before ADHD medication for those children.” The study also shows significant state-to-state variability in the type of treatment used to treat ADHD in children 4-17 years of age; on average, states with higher behavioral therapy rates had lower medication treatment rates and vice versa. Rates of medication treatment among children with ADHD ranged from a low of 57 percent in California to a high of 88 percent in Michigan; rates of behavioral therapy among children with ADHD ranged from a low of 33 percent in Tennessee to 61 percent in Hawaii. This CDC analysis is derived from parent-reported data from the 2009-2010 National Survey of Children with Special Health Care Needs.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

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