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.
4. State Activities
6. Regulations Open for Comment
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the ACA, until it is repealed, conforms to Hyde; and until the new plan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
Two Subcommittees of the House Energy and Commerce Committee to Hold Three Hearings
The Subcommittee on Oversight and Investigations, chaired by Rep. Tim
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.”
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.
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
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
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
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,
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.
Regulatory Freeze Instituted by New Administration
The Trump administration instituted a
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
“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
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
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.
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
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,
Federal Judge Blocks HHS Rule on Third-Party Payments
On Jan. 25, a federal judge
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
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
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
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
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 HealthCare.gov 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
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
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
Read the proposed rule
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
- 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
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
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,
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
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.
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
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
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
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
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
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Kennan, Senior Vice President
Charlie Iovino, Vice
Caroline Perrin, Research Assistant
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