Washington Healthcare Update - June 2021 #3

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This week in Washington: Supreme Court dismisses challenge to the Affordable Care Act.

Upcoming Hearings/Markups

Congress

House

  • House Appropriations Committee Releases Fiscal Year 2022 Bill Schedule
  • Accountable Care in Rural America Act Reintroduced
  • House Republicans Send Becerra Letter Asking for Greater Investment in COVID-19 Therapies
  • Rep. Doggett Introduces Bill to Authorize CMS to Work With Localities to Expand Medicaid Coverage
  • Rep. Manchin Asks President Biden to Nominate a Permanent FDA Commissioner

Senate

  • Bipartisan Manufacturing API, Drugs, and Excipients (MADE) in America Act Reintroduced
  • Bipartisan Pioneering Antimicrobial Subscriptions to End Upsurging Resistance (PASTEUR) Act Introduced
  • Republican Doctors Caucus Members Ask FDA to Research COVID-19 Immunity

Administration

  • HHS Proposes Rescinding Trump-Era 340B Health Center Rule
  • FDA Launches International Generic Drug Cluster
  • FDA Panel Discusses Safety Concerns for COVID-19 Vaccinations for Children
  • FDA Authorizes Additional Johnson & Johnson Vaccines From Emergent
  • Biden Administration Purchases Additional 200 Million Doses of Moderna Vaccine

Proposed Rules

  • CMS Issues Proposed Rule to Delay Medicaid Multiple Best Price Policy
  • CMS Issues Proposed Rule on Payment Rates and Policies for Inpatient and Long-Term Hospitals
  • CMS Interim Final Rule Requires LTC Providers to Report Vaccination Rates and Educate Staff and Residents

Courts

  • Supreme Court Dismisses Challenge to Affordable Care Act
  • U.S. District Court Rejects Biden Administration Request to Dismiss AstraZeneca Lawsuit

Reports

  • GAO Report on Direct-to-Consumer Advertising
  • GAO Report on TSA Efforts to Reduce Infectious Disease
  • GAO Report on VA Procurement of Medical Supplies

Upcoming Hearings/Markups

June 22

Senate Health, Education, Labor and Pensions Committee Hearing: “Vaccines: America’s Shot at Ending the COVID-19 Pandemic”
10:00 a.m.
For more information, click here.

June 23

House Oversight and Reform Subcommittee on Economic and Consumer Policy Hearing: “An Epidemic Continues: Youth Vaping in America”
10:00 a.m.
For more information, click here.

Congress

House

House Appropriations Committee Releases Fiscal Year 2022 Bill Schedule

On June 15, chair of the House Appropriations Committee Rep. Rosa DeLauro (D-CT) released the markup schedule for fiscal year (FY) 2022 spending bills. The Appropriations Committee plans to take up the Food and Drug Administration’s (FDA) appropriations next week and the Department of Health and Human Services’s (HHS) appropriations in July.

The schedule can be found here.

Accountable Care in Rural America Act Reintroduced

On June 8, a group of bipartisan representatives reintroduced the Accountable Care in Rural America Act (H.R. 3746), which would amend Title XVIII of the Social Security Act with the objective of improving the benchmarking process for accountable care organizations (ACOs) by removing an organization’s beneficiaries from the calculation of a regional benchmark.

The bill was sponsored by Reps. Jodey Arrington (R-TX), Suzan DelBene (D-WA), Mike Kelly (R-PA), Ami Bera (D-CA), Tom O’Halleran (D-AZ), Terri Sewell (D-AL), Neal Dunn (R-FL) and Lance Gooden (R-TX).

Thirteen health stakeholders, including the American Hospital Association, wrote a letter in support of the bill. The letter can be found here.

House Republicans Send Becerra Letter Asking for Greater Investment in COVID-19 Therapies

On June 15, 23 House Republicans sent a letter to Department of Health and Human Services (HHS) Secretary Xavier Becerra requesting further investment, research and development of COVID-19 therapies. Eleven of the 23 Republicans who signed the letter are members of the GOP Doctors Caucus.

Rep. Doggett Introduces Bill to Authorize CMS to Work With Localities to Expand Medicaid Coverage

On June 17, Rep. Lloyd Doggett (D-TX) introduced the Cover Outstanding Vulnerable Expansion-Eligible Residents (COVER) Now Act, which aims to give the Centers for Medicare and Medicaid Services (CMS) the authority to contract directly with counties, cities and other subdivisions to expand Medicaid eligibility with demonstration projects. The bill would give local governments 100 percent of federal funding for the first three years of expansion, with a reduction to 90 percent by the seventh year. The legislation would approve 100 demonstrations for local expansion, and currently has more than 40 Democratic cosponsors.

Rep. Manchin Asks President Biden to Nominate a Permanent FDA Commissioner

On June 17, Rep. Joe Manchin (D-WV) wrote a letter to President Biden urging him to nominate a permanent Food and Drug Administration (FDA) commissioner. In the letter, Rep. Manchin stated that the acting commissioner, Dr. Janet Woodcock, is not suited for the role, and cited as evidence the recent FDA decision to approve Aduhelm (aducanumab) to treat Alzheimer’s despite no members of the advisory panel voting in favor.

The letter can be found here.

Senate

Bipartisan Manufacturing API, Drugs, and Excipients (MADE) in America Act Reintroduced

On June 16, Sens. Tim Scott (R-SC) and Jacky Rosen (D-NV) reintroduced the Manufacturing API, Drugs, and Excipients (MADE) in America Act, which aims to reduce the U.S. pharmaceutical supply chain’s dependence on China. The bill would create a new tax credit that would apply to manufacturers operating in certain “Opportunity Zones” and improve the Food and Drug Administration’s (FDA) reporting and monitoring efforts.

Companion legislation was introduced in the House by Reps. Tom Rice (R-SC) and Darren Soto (D-FL).

Bipartisan Pioneering Antimicrobial Subscriptions to End Upsurging Resistance (PASTEUR) Act Introduced

On June 16, Sens. Michael Bennet (D-CO) and Todd Young (R-IN) introduced a revised version of the Pioneering Antimicrobial Subscriptions to End Upsurging Resistance (PASTEUR) Act, which aims to incentivize the development of new antibiotics through a subscription-style reimbursement model for antimicrobial drugs. The bill was revised to include the Centers for Disease Control and Prevention’s (CDC) recommendations on drugs that target fungi and measures to ensure that the government’s investments are protected if pharmaceutical companies default on their contracts.

Republican Doctors Caucus Members Ask FDA to Research COVID-19 Immunity

On June 17, members of the GOP Doctors Caucus sent a letter to the Food and Drug Administration (FDA) urging the agency to improve vaccine research to better understand COVID-19 immunity achieved by vaccination or through natural infection. The letter also calls on the FDA to prioritize T-cell tests.

Signatories to the letter were Sen. Roger Marshall (R-KS), Rep. Andy Harris (R-MD), Sen. Rand Paul (R-KY), Rep. Neal Dunn (R-FL), Rep. Ronny Jackson (R-TX) and Rep. Mariannette Miller-Meeks (R-IA), who are all doctors.

The letter can be found here.

Administration

HHS Proposes Rescinding Trump-Era 340B Health Center Rule

On June 15, the Department of Health and Human Services (HHS) issued a notice that it would rescind a Trump administration final rule that required health centers to pass 340B discounts for insulin and epinephrine on to patients.

The final rule came from a September 2020 executive order aimed to address prescription drug prices. The Biden administration delayed the rule twice to give time to review it. HHS states that the Trump administration final rule would create burdens and administrative costs on health centers, and also create a new required definition for “individuals with low income.”

FDA Launches International Generic Drug Cluster

On June 14, the Food and Drug Administration (FDA) launched the Generic Drug Cluster, which the world’s regulatory agencies will use to address generic drug development and increase scientific alignment. The FDA stated that the cluster will aid the FDA and other regulators to better understand agencies’ regulatory requirements and the current thinking on drug development. The cluster will have a confidential forum for regulators to discuss development policies.

FDA Panel Discusses Safety Concerns for COVID-19 Vaccinations for Children

On June 18, the Food and Drug Administration’s (FDA) Vaccines and Related Biological Products Advisory Committee met to discuss whether COVID-19 vaccines should be authorized for pediatric populations aged 6 months-12 years, or whether pediatric indications should go through the full vaccine licensure process.

FDA Authorizes Additional Johnson & Johnson Vaccines From Emergent

On June 16, the Food and Drug Administration (FDA) announced that it authorized an additional batch of Johnson & Johnson’s (J&J) COVID-19 vaccine produced at Emergent BioSolutions’ Baltimore facility. The authorization comes despite multiple health and safety hazards at the Baltimore facility during the time of vaccine production. Canada rejected donated J&J vaccines from the facility, with the national health agency saying it could not verify their quality.

Biden Administration Purchases Additional 200 Million Doses of Moderna Vaccine

On June 16, Moderna announced that the Biden administration purchased an additional 200 million doses of its COVID-19 vaccine to help vaccinate children or be used as a booster for individuals with lower immunity. 110 million doses will be distributed through the end of 2021 and 90 million will be distributed the first quarter of 2022.

Proposed Rules

CMS Issues Proposed Rule to Delay Medicaid Multiple Best Price Policy

On May 26, the Centers for Medicare and Medicaid Services (CMS) published a proposed rule that would delay the Medicaid Multiple Best Price Policy implementation for six months. The Medicaid Multiple Best Price Policy would require manufacturers to report multiple best prices for a drug under Medicaid if the drug manufacturer is participating in a value-based purchasing arrangement.

The original rule, which was finalized on Dec. 31, 2020, would have implemented the requirements on Jan. 21, 2022, but the Biden administration’s proposed rule would delay the implementation until July 1, 2022.

The most recent proposed rule, titled “Medicaid Program; Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability (TPL) Requirements: Delay of Effective Date for Provision Relating to Manufacturer Reporting of Multiple Best Prices Connected to a Value Based Purchasing Arrangement; Delay of Inclusion of Territories in Definition of States and United States,” can be found here.

CMS Issues Proposed Rule on Payment Rates and Policies for Inpatient and Long-Term Hospitals

On April 27, the Centers for Medicare and Medicaid Service (CMS) issued a proposed rule titled “Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals and the Long Term Care Hospital Prospective Payment System and Proposed Policy Changes and Fiscal Year 2022 Rates; Quality Reporting and Medicare and Medicaid Promoting Interoperability Programs Requirements for Eligible Hospitals and Critical Access Hospitals; Proposed Changes to Medicaid Provider Enrollment; and Proposed Changes to the Medicare Shared Savings Program.”

The proposed rule would update Medicare fee-for-service payment rates and policies for inpatient hospitals and long-term care hospitals for fiscal year (FY) 2022. CMS is publishing this proposed rule to meet the legal requirements to update Medicare payment policies for IPPS hospitals and LTCHs on an annual basis. A fact sheet that discusses major provisions of the proposed rule can be downloaded from the Federal Register here.

The public comment period closes on June 28.

The rule can be found here.

CMS Interim Final Rule Requires LTC Providers to Report Vaccination Rates and Educate Staff and Residents

On May 11, the Centers for Medicare and Medicaid Services released an interim final rule titled “COVID-19 Vaccine Requirements for Long-Term Care Facilities and Intermediate Care Facilities for Individuals with Intellectual Disabilities Residents, Clients, and Staff.”

The rule requires long-term care (LTC) facilities and intermediate care facilities treating individuals with intellectual disabilities to submit weekly reports on the COVID-19 vaccination status of residents and staff. In addition, the interim final rule requires LTC and intermediate care facilities to educate residents and staff about the vaccine and offer shots when supplies are available.

There is a 60-day comment period.

The rule can be found here.

Courts

Find a comprehensive look at “The Courts and Healthcare Policy” here.

Supreme Court Dismisses Challenge to Affordable Care Act

On June 17, the Supreme Court ruled 7-2 in the case of California v. Texas that the two Texans and states that challenged the Affordable Care Act’s (ACA) constitutionality do not have standing, thereby dismissing the case. In 2018, Congress repealed the penalty for failing to comply with the ACA’s individual mandate. As a result, a group of 18 Republican attorneys general and two individuals from Texas claimed that without the penalty, the remaining mandate was unconstitutional, and since the mandate is linked to rest of the ACA, the entire ACA should be thrown out.

Justice Steven Breyer wrote the decision, and Justices Samuel Alito and Neil Gorsuch wrote the dissent. In the dissent, Justices Alito and Gorsuch say that further legal action is still possible.

U.S. District Court Rejects Biden Administration Request to Dismiss AstraZeneca Lawsuit

On June 16, the U.S. District Court for the District of Delaware rejected the Biden administration’s request to dismiss an AstraZeneca’s lawsuit. The AstraZeneca lawsuit challenged the Department of Health and Human Services’s (HHS) effort to stop restrictions of 340B discounts on drugs dispensed by contract pharmacies. AstraZeneca is one of several manufacturers that sued the government in response to a December HHS Office of General Counsel advisory opinion that stated the method used by 340B providers to dispense drugs does not impact pharmaceutical companies’ obligation to provide discounts. The judge stated that the 340B statute is vague and there is more than one permissible interpretation.

Reports

GAO Report on Direct-to-Consumer Advertising

On June 17, the Government Accountability Office (GAO) released a report titled “Prescription Drugs: Medicare Spending on Drugs with Direct-to-Consumer Advertising.” The report states that pharmaceutical companies spent $17.8 billion on direct-to-consumer advertising (DTCA) for 553 drugs from 2016 through 2018, with annual spending relatively stable at $6 billion per year. Almost half of DTCA spending was for drugs that treat arthritis, diabetes and depression. Also, nearly all DTCA spending was on name-brand drugs. The GAO report states that Medicare Parts B and D beneficiaries spent $560 billion on drugs from 2016-2018, and $324 billion was spent on advertised drugs. Among the top ten drugs with the highest Medicare Parts B or D expenditures, four were also among the top ten drugs in highest advertising spending.

The GAO review of four advertised drugs found that pharmaceutical companies changed their DTCA spending during key events. In addition, the GAO found that DTCA may have contributed to increases in Medicare beneficiary use and spending.

A press release from Sens. Chuck Grassley (R-IA) and Dick Durbin (D-IL) on the report can be found here.

The full report can be found here.

GAO Report on TSA Efforts to Reduce Infectious Disease

On June 14, the Government Accountability Office released a report titled “COVID-19: TSA Could Better Monitor Its Efforts to Reduce Infectious Disease Spread at Checkpoints.” The report details efforts undertaken by the Transportation Security Administration (TSA) to control the spread of COVID-19, such as amended safety measures and additional paid leave. The GAO recommended that TSA take steps to strengthen monitoring measures to reduce the spread of infectious disease at checkpoints, and analyze available data to identify successes and failures. The report notes that these suggestions could be implemented by the TSA administrator.

The full report can be found here.

GAO Report on VA Procurement of Medical Supplies

On June 15, the Government Accountability Office (GAO) issued a report titled “VA COVID-19 Procurements: Pandemic Underscores Urgent Need to Modernize Supply Chain.” The report notes that the Department of Veterans Affairs (VA) had difficulty getting medical supplies, including personal protective equipment (PPE) in the early days of the COVID-19 pandemic. The report states that as a result, the VA is currently taking on several initiatives to modernize its supply chain and prepare for future crises. The initiatives include replacing the inventory management system, establishing Regional Readiness Centers for critical medical supplies and seeking to participate in a Department of Defense Warstopper program for emergency access to critical supplies. The report notes that each initiative is delayed and is in the early planning stages. The GAO has made 49 recommendations to the VA since 2015 to improve acquisition management, and the VA has implemented 22 of them. The GAO recommended that the VA develop a comprehensive supply chain management strategy that details how the supply chain initiatives relate to each other.

The full report can be found here.

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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