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Nov 13, 2017

Washington Healthcare Update

This Week: DOD bill could undermine FDA authority…CMS pushes 1115 waivers for opioid epidemic…Maine votes to expand Medicaid…Ohio kills drug proposal.

1. Congress



2. Administration

3. States

4. Reports

1. Congress


Tax Bill Does Not Include Individual Mandate Repeal

Republicans are considering repealing the mandate that currently requires that most Americans obtain health coverage. The Republican House-proposed tax bill could be a vehicle for such an effort. However, so far, the bill has moved through markup without such a provision being added.

Repealing the Affordable Care Act’s individual mandate would reduce the federal deficit by $338 billion between 2018 and 2027, the CBO said in a preliminary estimate.

The Senate Republican proposal released on Nov. 9 does not include a repeal of the mandate. GOP leaders are talking with rank-and-file members to assess whether they have the necessary 50 votes to repeal this provision of the Affordable Care Act.


DOD Bill Could Undermine FDA

Section 732 of the Senate’s version of the National Defense Authorization Act, HR 2810, creates a new regulatory structure that would allow the Pentagon to sign off on unapproved devices and drugs for emergency use on military personnel and others in harm’s way. Never before has authority been provided to an agency to decide approval for drugs and devices for its own use and outside the FDA.

HHS says it would undermine medical safety and potentially put soldiers at risk. FDA currently has sole authority to authorize drugs and devices for emergency use.

The conference language would create two safeguards. First, a new DOD committee of health care experts, appointed by the defense secretary, would need to recommend emergency use of an unapproved drug or device. Second, the assistant secretary of defense for health affairs would need to authorize the drug’s or device’s use after consulting with the FDA. The proposal is backed by Senate Armed Services Chairman John McCain (R-AZ).

FDA offered an alternative proposal, which would have expedited drug and device reviews and approval upon a DOD request, but the language wasn’t accepted.

Senate HELP Chairman Lamar Alexander, House Energy and Commerce Chairman Greg Walden and Sen. Richard Burr asked congressional leaders to hold off on signing the annual defense policy bill, saying that it contains language that will put soldiers at risk and undermine the FDA. Instead of delaying a vote on the legislation to make changes, the House Armed Services and Energy and Commerce committees will continue talks on a potential fix, which could then be attached to another must-pass bill.

Wyden and Murray Specify Requirements for Next Nominee for HHS

On Oct. 30, Sen. Ron Wyden (D-OR), ranking member of the Senate Finance Committee, and Sen. Patty Murray (D-WA), ranking member of the Senate Health, Education, Labor and Pensions Committee, laid out a series of requirements in a letter to President Trump that they say the president’s next nominee to head the Department of Health and Human Services must meet to gain Democratic support.

Their criteria include that the nominee support: deployment of HHS resources to address the opioid crisis; tobacco regulation, especially for products targeting youth; nutrition policies that provide information to consumers; efforts to reduce the cost of prescription drugs; and strong safety and efficacy standards for drugs and devices.

Grassley and Blumenthal Push Funding for Open Payments Database

Sens. Chuck Grassley (R-IA) and Richard Blumenthal (D-CT) wrote HHS Acting Secretary Eric Hargan on Nov. 2 asking him to prioritize funding of CMS’s Open Payments database.

The Open Payments database, created under the bipartisan Physician Payments Sunshine Act, requires drug and device manufacturers and group purchasing organizations to report payments to teaching hospitals and physicians. CMS first published that database in 2014.

The senators believe this information is of particular concern at a time when overprescribing of opioid medications has exacerbated a public health crisis nationwide. Grassley and Blumenthal are the lead sponsors of a bill to expand the Physician Payments Sunshine Act disclosure requirements to apply to nurse practitioners and physician assistants, who are currently not mandated to disclose transactions with drug manufacturers.

To read the letter, click here .

2. Administration

FDA Extends Precertification Model to Low-Risk DTC Genetic Tests

On Nov. 6, FDA said it is extending its precertification model to low-risk direct-to-consumer genetic risk tests. Commissioner Scott Gottlieb made the announcement in a blog post.

Labs could seek a one-time review of their fitness to deliver safe and effective tests; after they have passed this test, Gottlieb said, no additional approvals would be required as long as the labs demonstrated they were keeping abreast of scientific literature, among other benchmarks. This would dramatically relax conditions for marketing the tests.

The deregulation move would not apply to all tests. An accompanying order notes that particularly risky tests—such as those testing life-threatening diseases—would not be exempt from premarket requirements.

FDA Releases Guidance to Assist Collaboration Between Brand-Name Drugs and Generics on REMS

On Nov. 8, the FDA released guidance to help make it easier for makers of brand-name drugs and generics to collaborate on mandated safety programs known as REMS—a move that should make it harder for brand drug companies to use REMS to prevent competition.

FDA prefers that brand and generic companies have one REMS system per product to reduce the burden on doctors and the pharmacy system. However, brand-name drug makers sometimes make it difficult for the generic company to join their safety plan as a way to forestall competition.

Gottlieb also said he will be contacting wholesalers and other supply chain intermediaries in the coming weeks to inform them of FDA’s interest in making sure generic firms can gain access to samples of branded products for studies needed to get a generic approved. Brand-name companies have tried to use the REMS programs or contracts with wholesalers to block generic drug makers from getting access to samples.

CMS Urges States to Use 1115 Waiver Process on Opioid Abuse

On Nov. 1, timed with the release of the president’s commission on opioids, CMS announced a new policy to allow states to design Medicaid demonstration waivers aimed at curbing the opioid epidemic and to encourage more states to apply for such waivers. These waivers are designed to create a continuum of care including residential care—for which these waivers have already been used to get around the IMD exclusion. CMS also approved substance use disorder (SUD) waivers in Utah and New Jersey.

Instead, the new policy allows states to apply for changes to their Medicaid program to deliver care in the substance abuse arena without requiring them to modify their entire continuum of care.

Under CMS’s new policy, states will be able to receive a federal funding share for services to treat opioid addiction or other SUDs.

The New Jersey and Utah waivers were approved in accordance with the new policy. The New Jersey waiver appropriates Medicaid funds to pay for medication-assisted treatment (MAT), residential withdrawal management treatment, peer supports and targeted case management. New Jersey Gov. Chris Christie (R), a member of Trump’s opioid commission, said that the waiver would allow thousands more people in New Jersey to access treatment.

The Utah waiver will expand Medicaid treatment to up to 6,000 childless adults who are either homeless, involved in the criminal justice system or need substance abuse treatment. The approved waiver does not include proposed amendments that included Medicaid work requirements and time limits on coverage. The state said enrollment for newly eligible Medicaid beneficiaries will begin immediately.

3. States

Maine Votes to Expand Medicaid

Maine voters approved an expansion of the state’s Medicaid program under the Affordable Care Act—the first time state voters have directly authorized such an expansion, and against the governor’s opposition.

Maine Gov. Paul LePage said on the day after the election that “I will not support increasing taxes on Maine families, raiding the rainy-day fund or reducing services to our elderly or disabled.” LePage is a Republican who is term-limited next year and has spearheaded the opposition to the ballot initiative.

Democrats hold a majority in the Maine House and Republicans control the state Senate—and because state lawmakers have already repeatedly supported expanding the program, it is not likely that the legislature would try to block the proposal going forward. The ballot measure requires Maine to submit a plan accounting for the expansion to the Department of Health and Human Services within 90 days.

About 80,000 adults will qualify under the expansion, according to independent estimates from a Maine legislative fiscal office.

Ohio Measure on Drug Prices Defeated

An Ohio ballot measure aimed at lowering drug prices was defeated. The measure would have required that state agencies purchase prescription drugs at prices no higher than those paid by the U.S. Department of Veterans Affairs. It was virtually identical to a proposal narrowly defeated by California voters in 2016.

The ballot campaign was the most expensive in the state’s history. The drug lobby PhRMA spent nearly $60 million in the race, spending almost twice as much per voter as it did in California.

Identical ballot measures in South Dakota and Washington, D.C. are expected next year.

4. Reports

Prescription Opioids: Medicare Needs to Expand Oversight Efforts to Reduce the Risk of Harm: GAO-18-15, Oct. 6

The GAO released a report concerning Medicare’s oversight of the use of opioids and their associated risks with the Medicare populations. The GAO recommended the CMS should gather information over time on the number of beneficiaries at risk of harm from opioids, including those who received high opioid morphine equivalent doses regardless of the number of pharmacies or providers as part of the assessing progress over time in reaching CMS’s goals related to reducing opioid use.

To read the report, click here.

To view the highlights of the report, click here.

To listen to the podcast, click here.

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

Stephanie Kennan, Senior Vice President
Anne Starke, Research Associate

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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