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Jan 30, 2017

Washington Healthcare Update

This Week: The first full week of the Trump administration saw executive orders, freeze on regulations, cabinet confirmation hearings and more…Congressional Republicans met in Philadelphia to discuss their agenda and timetable for accomplishing goals.

Health Reform Takeaway

  • “Repeal and Replace” Takes Hold: Goal at this point is to pass both a repeal and a replacement of ACA by the end of March in the House of Representatives.
  • House and Senate Begin Drafting Repeal and Replace Bill: The House Ways & Means and Energy & Commerce Committees and the Senate Finance and Health, Education, Labor and Pensions (HELP) Committees are currently examining specific proposals to repeal and replace the Affordable Care Act through this reconciliation legislative vehicle. Individual groups of senators are also beginning to introduce different versions of replacement legislation. The earliest the congressional committees could report ACA repeal and replacement proposals was Jan. 27, but indications are that these committees will bring forward public proposals in February or March. In addition, many want to get the administration’s input and that means waiting until Rep. Price is confirmed as Secretary of HHS.
  • Obamacare Ads Stopped: Trump administration has pulled the plug on Obamacare ads and outreach, saying it’s a $5 million savings. The deadline for enrollment is Tuesday. The last five days of the open enrollment season are seen as critical because many individuals procrastinate and then make a last-minute decision to sign up. That is particularly true for the young and healthier customers.

1. Congress



2. Administration

3. Courts

4. State Activities

5. Other

6. Regulations Open for Comment

7. Reports

1. Congress


House Passes Ban on Federal Funding of Abortion

On Jan. 24, the House passed legislation that would ban federal funding from going toward abortion coverage, including qualified health plans sold in the exchanges. The move came one day after President Trump signed an executive order reinstating the so-called “Mexico City” policy banning foreign aid from going to entities that provide abortion services, and just days after millions of Americans protested anti-women policies.

The legislation would make the Hyde Amendment and other prohibitions on federal funding for abortions permanent and government-wide; ensure that the ACA, until it is repealed, conforms to Hyde; and until the new plan year begins, require that QHPs fully disclose the extent to which any health insurance product sold on the exchange funds abortion coverage. It also would ban small businesses from using tax credits to buy plans with abortion coverage.

Two Subcommittees of the House Energy and Commerce Committee to Hold Three Hearings

The Subcommittee on Oversight and Investigations, chaired by Rep. Tim Murphy (R-PA), announced a hearing for Jan. 31 at 10 a.m. in Room 2123 of the Rayburn House Office Building. The hearing is entitled “Medicaid Oversight: Existing Problems and Ways to Strengthen the Program.” This hearing will aim to troubleshoot existing problems with the implementation of the Medicaid program and identify ways to strengthen the program.

The Subcommittee on Health, chaired by Rep. Michael C. Burgess, M.D. (R-TX), announced two hearings: (1) Feb. 1 at 10 a.m. in Room 2123 of the Rayburn House Office Building, entitled “Strengthening Medicaid and Prioritizing the Most Vulnerable”; and (2) Feb. 2 at 10:30 a.m. in Room 2123 of the Rayburn House Office Building, entitled “Patient Relief from Collapsing Health Markets.”

The hearing on Feb. 1 will examine discussion drafts of three Medicaid bills. Similar legislation was introduced by committee members last Congress. These bills include: ending Medicaid benefits for lottery jackpot winners, closing a loophole that lets married couples shelter assets to qualify for Medicaid and helping states that are forced to provide temporary Medicaid coverage for individuals who are unlawfully present. A portion of the savings from the legislation would be directed to reduce waiting lists for the most vulnerable in the Medicaid program, like those with disabilities.

The hearing on Feb. 2 will examine four bills to give patients cost relief from Obamacare, tighten enrollment gaps and protect taxpayers. Specifically, the bills aim to help bring younger and healthier patients into the insurance system by loosening age rating bands, ensure patients with pre-existing conditions are not denied coverage or care, require verification before a patient signs up for a plan outside of the standard open enrollment period, end the gaming of health insurance rules by minimizing the grace periods that have led to risk imbalance and potential misuse, and protect patients from premium increases if they maintain coverage.

House Energy and Commerce Committee Chair Works on ACA Replacement Bill

Chairman Greg Walden (R-OR) will introduce a bill next week with a requirement that health plans cover people with pre-existing conditions.


Senate Finance Committee to Vote on Price Nomination

Chairman Orrin Hatch (R-UT) announced that the Senate Finance Committee will vote on the nomination of Rep. Tom Price (R-GA) to be Secretary of the U.S. Department of Health and Human Services on Jan. 31 at 10 a.m.

Democratic Senators Seek SEC Probe of Price’s Stock Trades

Eight Democratic senators, led by Sen. Patty Murray (D-WA), are asking the SEC to investigate Rep. Tom Price’s stock trades, citing “potential STOCK Act violations, illegal insider trading and other conflicts of interest.” Price has been accused of buying stock in several health care companies shortly before introducing legislation that could benefit them. He has denied using nonpublic information before purchasing a stock and denied trying to help the companies.

This request came just a day prior to Price’s going before the Senate Finance Committee for a confirmation hearing. He appeared before the Senate HELP Committee last week and was challenged by Democrats to explain why he traded health care stocks worth more than $300,000 over the last four years, as well as his purchase of biotech company stock at discounted prices.

Senators Introduce Bills on ACA Replacement

On Jan. 23, Sen. Bill Cassidy (R-LA), joined by Sens. Susan Collins (R-ME), Johnny Isakson (R-GA) and Shelly Moore Capito (R-WV), introduced the Patient Freedom Act of 2017 (PFA). The legislation for partially repealing and replacing the Affordable Care Act (ACA) combines features of the Healthcare Accessibility, Empowerment, and Liberty Act, which Sen. Cassidy introduced into Congress with Congressman Pete Sessions (R-TX) in 2016, and earlier Patient Freedom Acts, which Sen. Cassidy introduced as potential responses, had the Supreme Court held in King v. Burwell that the federal marketplace could not issue premium tax credits.

Following are the press release, one-page description and section-by-section summary.

Sens. Cassidy and Collins state that the PFA would grant to the states power to “increase access to health insurance and improve patient choice, while preserving important consumer protections” from the ACA. The PFA does this by selectively—rather than entirely—repealing ACA provisions, and by giving the states three choices. Under the PFA, states could 1) keep the ACA (more or less); 2) adopt a different approach based on subsidized “Roth HSAs” (explained below); or 3) reject reform altogether. The hope is that the legislation will appeal to both supporters of the ACA and those who demand a less regulatory, more market-oriented and more state-centered approach.

Sen. Rand Paul (R-Ky.) also introduced legislation: “Obamacare Replacement Act” (S. 222). Among its key provisions:

  • Provides a two-year open-enrollment period under which individuals with pre-existing conditions can obtain coverage.
  • Restores HIPAA pre-existing conditions protections. Prior to Obamacare, HIPAA guaranteed those within the group market could obtain continuous health coverage regardless of pre-existing conditions.
  • Replaces the existing open-ended tax exclusion for employer-provided health insurance with a universal deduction on both income and payroll taxes that would provide the same level of benefit regardless of how an individual obtains their health insurance.

The bill will also give “individuals the option of a tax credit of up to $5,000 per taxpayer for contributions to an HSA ... Removes the maximum allowable annual contribution, so that individuals may make unlimited contributions to an HSA ... [and] Eliminates the requirement that a participant in an HSA be enrolled in a high deductible health care plan.”

For more information, click here.

CBO Lowers ACA Enrollment Projections

On Jan. 24, the Congressional Budget Office (CBO) lowered its previous projections for enrollment in the ACA marketplaces, but maintained that the individual insurance market remains on a steady trajectory.

CBO and the Joint Committee on Taxation, in the official 2017 to 2027 Budget and Economic Outlook, project that about 10 million people will get health insurance through the marketplaces established under the ACA in 2017, down from an earlier projection of 15 million. Also revised down was the number of people expected to buy health insurance through the marketplaces in 2027—from between 18 and 19 million in last year’s projection to 13 million.

Still, CBO and JCT project that the number of people with nongroup health insurance coverage will remain steady at about 18 million people in 2017, and about 20 million in 2027.

Under current law, the CBO also estimates that in 2027 as many as 28 million people under the age of 65 will remain uninsured. These projections come as President Donald Trump and Republican lawmakers move to repeal major pieces of Obamacare.

2. Administration

Regulatory Freeze Instituted by New Administration

The Trump administration instituted a regulatory freeze on Jan. 20 that requires federal agencies to not issue any new regulations or guidance documents, pull back any regulations or guidance under review by the Office of the Federal Register, and temporarily postpone regulations and guidance that have been published but have yet to take effect. It is common for a new president to impose an executive branchwide freeze on regulations under development, but it is not certain whether a notice-and-comment process is necessary to delay final regulations that are not yet in effect.

The White House’s Jan. 20 memo asks the heads of executive departments and agencies to take a number of steps to freeze regulations and guidance so that the new president’s appointees or designees have the chance to review them. Regulations and guidance subject to statutory or judicial deadlines should be excluded from the regulatory freeze, the memo says. One of those steps includes not sending any new regulation to the Office of the Federal Register until a department or agency head appointed by the president reviews and approves the regulation. The exception to this is if a regulation or guidance touches on “emergency situations or other urgent circumstances relating to health, safety, financial or national security matters.” Regulations that have been sent to the Office of the Federal Register but not published should be immediately withdrawn and reviewed by the administration. Additionally, final rules that had been published by the Office of the Federal Register but have yet to take effect will be temporarily postponed.

“With respect to regulations that have been published in the OFR but have not taken effect, as permitted by applicable law, temporarily postpone their effective date for 60 days from the date of this memorandum, subject to the exceptions described in paragraph 1, for the purpose of reviewing questions of fact, law and policy they raise,” the memo says. “Where appropriate and as permitted by applicable law, you should consider proposing for notice and comment a rule to delay the effective date for regulations beyond that 60-day period.”

In cases where the effective date of a rule has been delayed to review questions of fact, law or policy, agencies must now consider proposing notice-and-comment rulemaking. If regulations raise substantial questions, the memo says agencies should notify the OMB director and “take further appropriate action.”

However, the Congressional Research Service in a legal memo notes that it is not clear whether an agency like CMS would need to go through the notice-and-comment process before delaying the effective date of a rule that has been finalized but not yet implemented. CMS had three outstanding rules under review by the Office of Management and Budget a few days after the White House memo was released, according to OMB’s website. These are: a proposed rule on Medicaid Supplemental Payment and Accountability, a final rule on program integrity enhancements to the provider enrollment process, and an interim final rule on pre-existing condition insurance plan program updates. The pre-existing condition insurance plan program rule has been under review by OMB since February 2015. The 340B so-called “mega-guidance” was also listed as under OMB review. CMS final rules that have been in the Federal Register but not yet implemented include rules on the use of new or increased pass-through payments in Medicaid, conditions of participation for home health agencies and pay bundles for cardiac care and joint replacement, as well as an HHS rule on Medicare appeals.

Doctors’ Group Protests Exclusive Zika Vaccine License to Sanofi

On Jan. 23, Doctors Without Borders asked the Pentagon to reverse a decision to grant an exclusive license to the pharmaceutical company Sanofi for patents on a promising Zika vaccine candidate, saying it could sabotage efforts to get the vaccine to those who need it most.

The humanitarian group said the U.S Army Medical Research and Materiel Command, which helped create the Zika vaccine, should instead grant a nonexclusive patent license that would enable other companies or nonprofits to advance the vaccine.

While applauding the U.S. government for its funding and leadership of Zika research, the group said an exclusive license could hinder innovation and restrict access to the promising vaccine. Sanofi might not develop the vaccine if it saw no profit in it, the group said, or it might develop the vaccine but charge too much for poor people in tropical areas to receive it.

The group noted that Sanofi had received $40 million in HHS funding to develop the vaccine and that other sources, including FDA fast-track programs, would be available to further Sanofi’s work.

“The licensing of this technology should ensure full public return on the public investment that U.S. taxpayers have made and are continuing to make,” according to the release.

A public notice about the military’s license of the vaccine was published Dec. 9, with comment due Jan. 23.

CMS to Host Webinar on Advancing Care Coordination Through Episode Payment Models

The CMS Innovation Center will host a webinar to discuss various aspects of the Advancing Care Coordination through Episode Payment Models (EPMs); Cardiac Incentive Payment Model; and Changes to the Comprehensive Care for Joint Replacement Model final rule on Feb. 9, from 12 p.m.–1 p.m. EDT. The final rule was displayed at the Federal Register on Dec. 20 and is effective on Feb. 8.

Registration for this webinar is now open. For additional information about Episode Payment Models, click here.

3. Courts

Federal Judge Blocks HHS Rule on Third-Party Payments

On Jan. 25, a federal judge blocked the implementation of an HHS rule on third-party insurance payments that was finalized by the Obama administration in December.

U.S. District Judge Amos Mazzant in Sherman, Texas, granted a temporary restraining order that prevents the rule from taking effect. He found that HHS failed to follow proper rulemaking procedures. He had issued an emergency stay on the rule earlier this month.

Three dialysis companies, Fresenius Medical Care, DaVita and U.S. Renal Care, filed a lawsuit to block the rule, saying it would harm patient care. The Obama administration issued the rule after insurers complained that kidney care providers are steering patients who are eligible for Medicare or Medicaid into private plans in order to reap higher payments.

The rule was scheduled to take effect Jan 13.

FTC Refiles Suits Against Generic Defendants

On Jan. 23, the FTC refiled charges against Watson Laboratories and its former parent company Allergan for illegally blocking the entry of a lower-cost generic version of a drug into the U.S. market.

The agency charges that Watson struck a “pay-for-delay” agreement with Endo Pharmaceuticals to keep a cheaper version of Endo’s pain medicine Lidoderm from consumers. Watson had filed for FDA approval to make a generic Lidoderm patch, then agreed not to make the treatment in exchange for a share of Endo’s extended monopoly profits, according to the FTC. The lawsuit was filed in the U.S. District Court for the Northern District of California.

FTC also entered into a settlement agreement with Endo today for its role in the matter, as well as accusations that the company violated antitrust laws by using pay-for-delay settlements to block access to cheaper versions of its opioid Opana ER. The settlement bars Endo from entering into such pay-for-delay arrangements with generic drugmakers in the future.

The FTC additionally filed an administrative complaint against Impax Laboratories, charging that the company agreed with Endo to delay making a generic version of Opana until January 2013, in exchange for $112 million. The administrative trial against Impact is set to begin Sept. 19.

The FTC originally brought the charges as a single action in March 2016, then voluntarily dismissed its complaint in November after the court granted defendants’ severance motion.

Judge Blocks Aetna-Humana Merger

A federal judge blocked Aetna’s merger with Humana after finding that the health insurers’ $37 billion deal would leave seniors with fewer and costlier options for private Medicare coverage.

The merger risked irreparably harming competition within the Medicare Advantage market, and would hand Aetna and Humana a near monopoly across the nation, wrote U.S. District Court Judge John D. Bates in a verdict issued Jan. 23.

The ruling represents a major victory for the Justice Department, which sued to halt the merger over concerns that it would further consolidate an already-concentrated private Medicare landscape. Between Aetna and Humana, the companies serve 4.5 million of the nearly 17 million seniors enrolled in Medicare Advantage. The DOJ also raised concerns that the deal would hurt competition on the Obamacare insurance exchanges.

Aetna and Humana could still appeal the ruling. It is unclear if President Donald Trump’s Justice Department will take a friendlier view of the merger.

The companies had argued that their merger could not be anticompetitive because they would still have robust competition from a government-run Medicare program that serves two-thirds of eligible seniors.

But Bates rejected that argument, along with Aetna and Humana’s plan to alleviate antitrust concerns by selling 290,000 Medicare Advantage customers to Molina Healthcare.

“The companies’ rebuttal arguments are unpersuasive,” Bates wrote. “Federal regulation would likely be insufficient to prevent the merged firm from raising prices or reducing benefits, and neither entry by new competitors nor the proposed divestiture to Molina would suffice to replace competition eliminated by the merger.”

4. State Activities

California: Covered California’s Outreach Plan to Continue

Covered California officials said the state-based exchange’s $100 million marketing and outreach plan will continue as planned, unaffected by the Trump administration’s move to halt advertising and other enrollment outreach. Roughly 1.3 million people have renewed coverage, and 327,000 residents have signed for the first time since Nov. 1. The exchange commissioned a report that found eliminating cost-sharing reductions and requiring health plans to build the costs into 2018 premiums would increase federal expenses by $221 million, or 29 percent. That is because the resulting advance premium tax credits would be worth more than what the government now pays directly in cost-sharing. The UCLA professors who authored the paper determined eliminating the subsidy funding would raise premiums for Silver plan consumers by 16.6 percent next year.

Indiana: Bill Allowing Needle Exchange Programs Gaining Traction in Legislature

A bill allowing counties and municipalities to set up their own needle exchange programs is gaining traction in the Indiana Legislature as the state continues to deal with an HIV outbreak. Under current law, the state health commissioner must declare a public health emergency before counties can set up an exchange. The bill cleared the House Public Health Committee and has support from Gov. Eric Holcomb. The legislation comes about two years after former Gov. Mike Pence lifted a ban on needle exchanges to respond to the HIV outbreak in Scott County. Patient advocates say the previous law created barriers that were difficult and time-consuming for counties.

Massachusetts: Gov. Baker Wants to Revive State Employer Mandate Proposal

Massachusetts Gov. Charlie Baker wants to revive a state employer mandate that changed after Obamacare went into effect, leading to an increase in people covered by Medicaid and CHIP rather than job-based coverage. The number of enrollees in MassHealth who are working full-time has nearly tripled since 2011, putting a strain on the state budget. MassHealth accounts for 40 percent of the governor’s budget, up from roughly 30 percent seven years ago. The proposal, which would need legislative approval, would include requiring employers to contribute a minimum of $4,950 for employees working 35 hours, as well as a five-year moratorium on new coverage mandates.

Michigan: HMO’s Want to Set Up Pilot Programs for Behavioral Health

HMO’s are urging the Michigan Legislature to allow them to set up pilot programs focused on integrating behavioral health with physical health care that go beyond what the governor’s mental health task force has recommended. The state panel earlier this month recommended that HMOs be allowed to set up pilot programs to play a role in the state’s behavioral health system, but it doesn’t offer guidelines on how to move forward with integration. The Michigan Association of Health Plans wants the State Legislature to provide clearer details about the pilot programs including alternative financing models. In a statement, the group said the panel’s recommendation “does not address the administrative or financial solutions needed to move toward an integrated system.” The state has been locked in a battle over how to reform its behavioral health system after Gov. Rick Snyder last year proposed letting HMOs manage behavioral health services. The proposal drew criticism from mental health groups and Snyder instead formed a task force, which made the recommendations.

Minnesota: Gov. Dayton Signs Legislation Creating State-Funded Subsidies

On Jan. 26, Minnesota Gov. Mark Dayton signed legislation creating state-funded subsidies for roughly 125,000 residents to reduce their individual market premiums. The subsidies will cut premiums by 25 percent, according to state officials. Dayton — who caused significant controversy last year when he said Obamacare was “no longer affordable” for many — had pushed the proposal for months after the near-collapse of the state’s individual market.

5. Other

National Governors Association Urges Congress Against Shifting Health Costs to States

The National Governors Association told House Republicans Jan. 24 that it is “critical” that Congress does not shift more health care costs to states as lawmakers weigh changes to Medicaid financing.

As Republicans in Congress work to replace Obamacare, they are weighing broader Medicaid changes that would limit federal spending through block grants or per capita caps. The governors’ letter did not specifically name either proposal, but it stressed that providing health care to vulnerable populations is a shared responsibility between the federal government and the states.

“In considering changes to Medicaid financing, it is critical that Congress continue to maintain a meaningful federal role in this partnership and does not shift costs to states,” wrote Democratic Gov. Terry McAuliffe of Virginia and Republican Gov. Brian Sandoval of Nevada, who head the NGA.

The two governors stressed that Congress must maintain current health spending levels as it considers an Obamacare replacement. But given the sharp partisan divide on Obamacare, they do not recommend specific suggestions for what a replacement should include.

The GOP ideas for limiting Medicaid spending are loathed by Democrats, who say either overhaul would destroy health coverage for low-income people. Several Republican governors have voiced support for either concept, but many are also urging that Congress retain Obamacare’s federal funding boost for Medicaid expansion. It is unclear how block grants or per capita caps would account for that money.

6. Regulations Open for Comment

CMS Releases Proposed Notice With Changes to Medicaid National Drug Rebate Agreement

On Nov. 7, CMS issued a proposed notice announcing changes that would be made to the Medicaid National Drug Rebate Agreement (NDRA) for use by the Secretary of the Department of Health and Human Services and manufacturers under the Medicaid Drug Rebate Program. The NDRA is being updated to incorporate legislative and regulatory changes that have occurred since the agreement was published in February 1991, as well as to make editorial and structural revisions, such as references to the updated Office of Management and Budget (OMB)-approved data collection forms and electronic data reporting. There is a 90-day comment period for this proposed notice that will end on Feb. 7, 2017.

For more information, click here.

CMS Issues Proposed Rule for Medicaid Managed Care Plans

CMS has issued a new proposed rule detailing regulations for pass-through payments to providers from Medicaid managed care plans. The guidance builds on the Medicaid managed care rule finalized by the Obama administration in May.

Read the proposed rule here.

CMS Announces PACE Innovation Act Request for Information

On Jan. 4, CMS released a Request for Information (RFI) seeking public input on potential adaptations of the model of care employed by the Program of All-Inclusive Care for the Elderly (PACE) for new populations, including individuals with physical disabilities, under the authority provided by the PACE Innovation Act. The PACE Innovation Act of 2015 (PIA) provides authority to test application of PACE-like models for additional populations, including populations under the age of 55 and those who do not qualify for a nursing home level of care, under Section 1115A of the Social Security Act.

The RFI includes two parts:

  • In the first part, CMS seeks comment on potential elements of a five-year PACE-like model test for individuals dually eligible for Medicare and Medicaid, age 21 and older, with disabilities that impair their mobility and who are assessed as requiring a nursing home level of care, among other eligibility criteria. We have provisionally named this model “Person Centered Community Care” or P3C. This potential model is designed to meet the requirements of a model test under Section 1115A of the Social Security Act and to adapt the PACE model of care for one population of focus. In addition to feedback on the potential elements of the P3C model described in the RFI, CMS seeks comment on the types of technical assistance that potential P3C organizations and states would require to participate in the model test.
  • In the second part of the RFI, CMS seeks information on additional specific populations whose health outcomes could benefit from enrollment in PACE-like models, and how the PACE model of care could be adapted to better serve the needs of these populations and the currently eligible population.

CMS is accepting feedback on this RFI until 5 p.m. EST on Feb. 10, 2017. Comments should be submitted electronically in PDF form to with the organization or individual submitting comments on the title of the document.

CMS Proposes Rule for Prosthetics and Orthotics Suppliers

On Jan. 11, CMS issued a proposed rule that would implement statutory requirements and specify: the qualifications needed for practitioners to furnish and fabricate prosthetics and custom-fabricated orthotics, and for qualified suppliers to fabricate prosthetics and custom-fabricated orthotics; accreditation requirements that qualified suppliers must meet in order to bill for prosthetics and custom‑fabricated orthotics; requirements that an organization must meet in order to accredit qualified suppliers to bill for prosthetics and custom-fabricated orthotics; and a timeframe by which qualified practitioners and qualified suppliers must meet the applicable licensure, certification and accreditation requirements. This rule would also remove the exemption from quality standards and accreditation that is currently in place in accordance with Section 1834(a)(20) of the Act for certain practitioners and suppliers who furnish or fabricate prosthetics and custom‑fabricated orthotics. In addition, this rule also includes authority for the Centers for Medicare & Medicaid Services (CMS) to revoke the Medicare enrollment of Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) suppliers that submit claims for items that do not meet the requirements of the statute and this proposed rule.

Only qualified practitioners who furnish or fabricate prosthetics and custom‑fabricated orthotics and qualified suppliers that fabricate or bill for prosthetics and custom‑fabricated orthotics would be subject to these requirements.

CMS will accept comments on the proposed rule until March 13, 2017, and will respond to comments in a final rule.

To see the proposed rule, click here.

FDA Releases Draft Guidance for Interchangeable Biosimilars

On Jan. 17, FDA outlined the criteria companies must meet to get a copycat biologic deemed interchangeable with its branded counterpart, a certification that paves the way for the cheaper products to be automatically substituted at the pharmacy level under state laws.

To get this designation, a biosimilar sponsor must show that its product can be expected to produce the same clinical result as the branded biologic in any given patient, for all of the drug’s approved uses, and that there are no risks if a patient is switched back and forth between the interchangeable biosimilar and the branded biologic, per draft guidance released by FDA.

Interchangeable biosimilars are expected to offer greater savings to the health system than biosimilars that lack this designation. Without the interchangeability designation a doctor must proactively write a prescription for the biosimilar.

The guidance outlines the types of studies and scientific data that companies will need to submit to FDA to get an interchangeable designation. When companies seek that designation, FDA recommends they seek approval for all of the branded biologic approved uses.

FDA is requesting comments on the draft guidance as well as a number of questions outlined in a Federal Register notice. FDA wants to know how it should regulate manufacturing changes of interchangeable products that occur after approval. The agency also wants to know how it should handle interchangeable designations if a branded biologic gets another use approved for the drug, after the interchangeable biosimilar is cleared by FDA.

FDA Releases Draft Guidance on Off-Label Drug Communication

On Jan. 17, FDA issued draft guidance that gives drug and device companies more flexibility to communicate off-label information about their products and avoid charges of misbranding. The new policy allows companies to promote a drug or device with information not on the agency-approved label as long as that information is truthful and non-misleading and is consistent with FDA-approved labeling.

Companies have asked FDA for clarity on marketing policies after a 2012 U.S. Court of Appeals decision ruled that under the First Amendment the government could not prohibit and criminalize the truthful off-label promotion of FDA-approved drugs.

The guidance outlines how FDA will determine whether a company’s communication is consistent with FDA’s required labeling. For example, companies will not be permitted to communicate information about the drug or device related to a use that has not yet been approved by FDA. They also can’t promote a patient population for the drug or device that has not been cleared by the agency.

The agency offers some examples of information companies could communicate that could be consistent with its FDA-required labels. For example, FDA said companies can promote testimony of patients who used the drug for its FDA-approved uses, such as the product’s effect on patients’ daily activities. Companies could also communicate long-term safety and efficacy information about products that were approved for chronic use based on a six-month trial, if the company now has data on the drug lasting a couple of years, FDA added.

The guidance also outlines the type of scientific data companies need to support their off-label claims. Comments on the draft are due in 60 days.

7. Reports

Study Finds ACA Increased Coverage for People With Chronic Illnesses

A study published in the Annals of Internal Medicine demonstrates that the ACA dramatically increased coverage for individuals with chronic illnesses like heart disease and diabetes in its first year of implementation.

The study found that about 5 percent of people with chronic illness gained coverage in 2014 when the law’s individual mandate and coverage expansion took effect. The percentage of people with chronic illness who gained coverage in Medicaid expansion states jumped from 83 percent to 89 percent that year. Meanwhile, in non-expansion states, the coverage increased modestly from 77 to 81 percent.

The authors said the ACA did not remove all barriers to treatment, particularly in states that have not expanded Medicaid. The study found that nearly 23 percent of people with chronic illness had to forgo a visit during the first year of the ACA’s implementation and about 18 percent reported not having a personal doctor. Some 27 percent of this group also said they did not have a checkup that year. Researchers said the gaps in access were particularly dramatic among racial minorities. About 27 percent of African-Americans and about 32.9 percent of Hispanics reported forgoing a visit to the doctor in 2014.

GAO Report Finds VA, DOD Facility Lacks Information for Proper Oversight and Efficiency

A new GAO report found that the Department of Veterans Affairs (VA) and the Department of Defense (DOD) need to develop better information to monitor operations and improve efficiency at their joint facility in North Chicago.

The National Defense Authorization Act for Fiscal Year 2010 authorized VA and DOD to establish a five-year demonstration to integrate their medical facilities in North Chicago, Illinois. The act also required the agencies to submit a report of the demo and their recommendation as to whether it should continue operating as a fully integrated facility after the five years. GAO reviewed their report and found that it lacked specific time frames and interim milestones for making improvements, and an updated cost-effectiveness analysis.

GAO recommended that the agencies develop the missing time frames and milestones, and conduct a cost-effectiveness analysis.

GAO Report Finds VHA Needs to Address Systemic, Long-standing Human Capital Challenges

A new GAO report found that the Veterans Health Administration is facing key human capital challenges that hamper its ability to effectively serve veterans. These challenges include skills gaps within medical centers’ HR offices and inadequate training for HR staff. Moreover, central HR offices have limited authority to oversee and hold medical centers accountable for delivering essential HR services, such as recruiting and training staff.

GAO recommended that VHA strengthen its central HR offices to ensure they can effectively oversee medical center HR staff and that VHA improve staff performance management at all levels and better support employee engagement.

If you have any questions, contact the following individuals at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Charlie Iovino, Vice President
Caroline Perrin, Research Assistant

Founded in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering infrastructure and economic development, strategic communications & grassroots, and government relations services. McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and has been named in The National Law Journal's special annual report, "The Influence 50," for the past several years. In the most recent report, McGuireWoods Consulting was ranked 15th of the 1,900 government relations firms in Washington, D.C.

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