Feb 6, 2017
Washington Healthcare Update
This Week: More discussion on what a replacement plan might look like…Senate fireworks
on getting cabinet secretaries confirmed…Energy and Commerce Committee to
markup drug bill…Sen. Wyden introduces bill to weaken IPAB…OMB withdraws
pending regulation on 340B.
Health Reform Takeaway
- Rep. Tom Price clears the Finance Committee so his nomination to
secretary of HHS moves forward for consideration by the full Senate.
- Energy and Commerce subcommittees hold hearings and float drafts of bills
related to Medicaid reform (previously passed in last Congress) and of
bills to “stabilize” the insurance market for replacement purposes.
4. State Activities
6. Regulations Open for Comment
Republican Members at Hearing Suggest States Opt Out of Medicaid Drug Formulary
Republican members of the House Energy & Commerce Committee at a
Feb. 1 health subcommittee hearing
asked witnesses whether state Medicaid programs would be better off if they
could opt out of the current Medicaid drug formulary and related rebate
framework, which includes all FDA-approved drugs. Reps. Tim Murphy (R-PA)
and Buddy Carter (R-GA) suggested formularies hurt state budgets when
Medicaid programs are forced to cover high-priced drugs.
The National Association of Medicaid Directors listed a retooling of the
Medicaid drug formulary framework as one of their policy priorities for the
Trump administration’s first 100 days, and said Medicaid directors need
greater authority to exclude some FDA-approved drugs from the formulary
Prescription drugs are optional under Medicaid statute, but all states
offer coverage through the Medicaid drug rebate program, which sets rebates
at 23.1 percent for brand drugs and 13 percent for generics. But the
mandates that come with the rebate program cripple states’ abilities to
fight the rising cost of prescription drugs, Medicaid directors said in
their open letter.
John McCarthy, Ohio’s former Medicaid director who implemented Medicaid
expansion under Republican Gov. John Kasich, testified at the hearing and
said in answer to questions from Carter that he would advocate for states’
ability to opt out of the formulary.
McCarthy said states—particularly large states—might have the leverage with
drug companies to get prices even lower than they are through the rebate
program if they were able to put drug contracts up for bidding, something
he said would have helped him when his budget was hit by Sovaldi, the
hepatitis C drug that Medicaid programs had to cover.
He said smaller states with fewer people on Medicaid would have less
negotiating power than large states with more crowded beneficiary pools,
but the key is that states should have a choice to do what is best for
their program’s sustainability.
Other lawmakers and patient advocates are split on whether government
programs should negotiate with drug makers.
House Energy and Commerce Delays Taking Up Drug Pricing Bill This Week
The House Energy and Commerce Committee had scheduled a markup this week to
consider legislation to increase competition for generic drugs to prevent
pharmaceutical companies from increasing prices of old medicines. However,
at the request of one of the co-sponsors and Democratic Leadership of the
committee, the markup has been delayed to allow for more vetting of the
The Lower Drug Costs Through Competition Act,
introduced last week by Reps. Gus Bilirakis (R-FL) and Kurt Schrader
(D-OR), would incentivize drug companies to develop generic drugs
amid shortages or absence of competition.
The bill is aimed at high-priced older drugs that have lost patent
protection—like Daraprim, the drug Martin Shkreli infamously raised the
price of by more than 50-fold—and would not affect the cost of innovative
new drugs. Branded drug makers are unlikely to oppose the bill, making it
more politically feasible for Republicans to support it as President Donald
Trump targets high drug prices. Companies that apply to make a generic drug
meeting the bill’s standards would get a six-month FDA review and a
priority review voucher for a six-month review of another generic drug
application. The bill would also increase transparency around FDA’s generic
drug backlog and would require a study on drug safety programs, known as
REMS, to understand whether brand companies use the program
to impede generic competition.
FDA already committed to reviewing within eight months the first generic
drug application that would compete with a branded product.
Sen. Susan Collins (R-ME) introduced a similar bill in the last Congress.
Price and Mnuchin Nominees Move to the Floor
On Jan. 31, Senate Finance Committee Democrats boycotted the vote for
Treasury nominee Steven Mnuchin and Health and Human Services nominee Rep
Tom Price (R-GA). The boycott meant there was not a quorum and the
committee could not vote. On Feb. 1, Republicans voted to suspend the
committee rules and vote the nominees out of committee so they could be
advanced for consideration by the Senate. No Democrats attended the Feb. 1
committee meeting either.
Democrats said they were boycotting the confirmation proceedings because of
concerns that Price and Mnuchin had misled the committee, and that the
nominees needed to provide more information. Democrats said in a letter to
Hatch that they wanted more information on Price’s privileged and
discounted access to stocks and answers from Mnuchin on “robo-signing” and
foreclosures by the bank he once led, OneWest.
Republicans slammed Democrats as being obstructionists and downplayed their
concerns with the nominees. Both Mnuchin and Price are expected to be
confirmed because of broad Republican support
Wyden Introduces Legislation to Weaken IPAB
Sen. Ron Wyden (D-OR) introduced a bill to weaken the controversial
Independent Payment Advisory Board due to fear that President Donald Trump
might use the board to cut Medicare payments. The Affordable Care Act
created the Independent Payment Advisory Board as a backstop to other
measures in the law that aim to curb rising health care costs. The board
has yet to be triggered, but Medicare trustees stated last year that the
growth in health care spending is expected to trigger IPAB this year.
The president appoints IPAB’s 15 members, with the advice and consent of
the Senate. Although the ACA became law in 2010, the law states that
legislation to strip the board’s powers may be introduced only this year,
and no later than Feb. 1. Wyden introduced both a resolution, as prescribed
by statute, and a bill to unwind IPAB. The resolution takes advantage of a
one-time opportunity to discontinue the process, whereas the bill repeals
IPAB in full.
Although legislation to repeal the automatic implementation of the board’s
recommendations had to be introduced by Feb. 1, Congress may repeal the
board any time. However, the latter has not happened even though the
Democrats who championed the board are gone from office. The two parties
came close to repealing IPAB in 2012, but Democrats dropped their support
when Republicans insisted on offsetting the then-$3.1 billion cost of
repealing the board with a medical malpractice measure that saved $45.5
billion. Also, Republicans excluded repeal of IPAB from the budget
reconciliation bill that Congress passed in December 2015 and that is
expected to be a template for this year’s reconciliation bill to repeal
large portions of the Affordable Care Act.
Dozens Arrested in Capitol Sit-in Over HHS Nominee
Dozens of protestors were arrested Jan. 31 during a rowdy demonstration in
front of Senate Finance Chairman Orrin Hatch’s office. They were protesting
Obamacare repeal and the anticipated confirmation of Rep. Tom Price (R-GA)
as HHS secretary.
About 70 demonstrators, comprising health care workers and patients from
the Save My Care coalition, descended on the first floor of the Senate Hart
Office Building and held a sit-in, chanting “What’s your plan for health
care? What’s your plan for us?” A spokesperson for the group said
individuals were charged with unlawful crowding and obstruction.
The protest came just hours after Hatch’s committee was scheduled to vote
on Price’s nomination to lead HHS. Senate Democrats on the panel staged a
surprise walkout, demanding more details about Price’s trades in health
care stocks. The boycott and lack of a quorum also delayed a vote on
Treasury nominee Steven Mnuchin.
Hatch blasted the decision, saying he was very disappointed with his
Democratic colleagues. The Save My Care coalition is backed by the Service
Employees International Union.
Senate Dems Send Letter to FDA on Hiring Freeze
Senate Democrats are worried that President Donald Trump’s federal
workforce hiring freeze will do significant damage to the FDA’s ability to
carry out its core mission and possibly conflict with a new biomedical
Eight HELP Committee Democrats said the directive Trump issued Jan. 25
could limit reviews of new drugs and medical devices and do damage to
bipartisan efforts to fill vacant positions at the agency.
letter, sent Jan. 30 to Acting FDA
Commissioner Stephen Ostroff, says the hiring freeze would conflict with
the new authorities Congress gave FDA in the 21st Century Cures Act to
“attract and retain outstanding talent to help the agency meet the next
generation of scientific challenges.”
The hiring freeze could also conflict with new drug, medical device,
biosimilar and generic user fee agreements Congress is expected to
reauthorize later this year. The pacts would provide industry funding for
the FDA to hire more staff, the lawmakers added.
The lawmakers ask the FDA to provide detail about how the freeze will
affect the agency’s ability to meet its user-fee commitments with industry
and how it could affect FDA’s ability to implement provisions of the Cures
Act. They also want to know how many and which positions may be exempt from
the hiring freeze.
Trump Administration Sends Rule to OMB on Stabilizing Markets
On Feb. 2, the Trump administration submitted a proposed rule to the Office
of Management and Budget. The rule is described as aimed at stabilizing the
No details are yet publicly available on what’s in the CMS proposal. Some
have suggested the rule may deal with three areas: further restricting
special enrollment periods, tightening oversight of enrollees’ coverage
eligibility and limiting the grace period for people who stop paying their
NIH Funds Recruitment for Precision Medicine Initiative
The NIH will provide up to $5 million annually over the next three years to
fund outreach and recruitment for the All of Us Research Program, an effort
to get a representative sample of the country into studies conducted under
the Precision Medicine Initiative.
NIH is asking universities and community groups to recruit at least 1
million people. Data and biospecimens collected from volunteers over many
years will be used in studies covering wide areas of health. NIH wants to
get participation from racial and ethnic groups underrepresented in past
research, but community groups often lack resources to run enrollment
Eligible organizations include nonprofits, community- and faith-based
organizations, minority-serving institutions and local governments.
Applications are due March 24 and the first awards should be issued in May.
For more information,
President Trump Holds Meeting with Drug Manufacturers
In a meeting with pharmaceutical companies Jan. 31 President Donald Trump
called for lowering drug prices in Medicare and Medicaid, increasing
competition and bidding, reforming FDA to accelerate drug approvals,
letting terminally ill patients get treatments and ending foreign
freeloading of U.S.-made drugs. Trump also asked the pharmaceutical
industry to bring manufacturing jobs back to the United States, prompting
pledges from several companies to do so.
There was no specific mention of Medicare Part D drug negotiation, leading
some to question whether Trump is still advocating the highly controversial
In its post-meeting statement, the Pharmaceutical Research and
Manufacturers of America also called for reforming laws and regulations
that prevent private companies from negotiating better deals and paying for
medicines based on the value they provide to the health care system. But
that most likely does not include Part D negotiation, which the industry
has opposed. On its website, PhRMA advocates changing rules and laws so
that drug companies can share information with insurers in advance of FDA
drug approvals. PhRMA also advocates changing the way Medicare Part B and
Medicaid prices are calculated so that indication-based pricing or
outcomes-based arrangements can be factored in.
The White House meeting included Robert Bradway of Amgen, Joaquin Duato of
Johnson & Johnson, Kenneth Frazier of Merck, Robert Hugin of Celgene,
Joseph Jimenez of Novartis, David Ricks of Eli Lilly, Stephen Ubl of PhRMA
and House Energy and Commerce Chairman Greg Walden (R-OR).
Walden said the meeting focused on several paths to bring down drug costs,
including reforming FDA, increasing competition and lowering costs for
patients who can’t afford medications.
OMB Withdraws Major Update to 340B Drug Program
The Office of Management and Budget
a pending regulation for the 340B drug program that would have tightened
controls on which patients, drugs and providers qualify for steep discounts
on prescription medicines.
The decision will likely be viewed negatively by drug makers, who have
argued that the 340B program has become too expansive in recent
years—growing even as more Americans obtained insurance. The program
mandates steep discounts on drugs to safety net providers who treat a
disproportionate share of low-income patients.
Hospitals praised the Trump administration’s decision to withdraw the
guidelines, saying it would have limited access to affordable drugs had it
The draft of the rules known as the “mega-guidance” released in August 2015
aimed to strengthen requirements on the relationships between hospitals and
other “covered entities” participating in the 340B program. The proposal
also called for increased documentation from hospitals and said that
eligibility for discounts would be evaluated on a
“prescription-by-prescription basis” rather than per individual patients.
CMS Announces DMEPOS Competitive Bidding Round 2019
On Jan. 31, CMS announced plans to consolidate all rounds and areas
included in the Medicare Durable Medical Equipment, Prosthetics, Orthotics
and Supplies (DMEPOS) Competitive Bidding Program into a single round of
The DMEPOS Competitive Bidding Program, mandated by Congress through the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA), changes the amount Medicare pays for certain equipment like walkers
and wheelchairs, using market-based prices, while maintaining beneficiary
access to items, services and quality of care. The program replaces the
outdated, inflated fee-schedule prices Medicare paid for these items with
lower, more accurate prices to help Medicare and its beneficiaries save
money while ensuring access to quality equipment, supplies and services.
The program also helps limit fraud and abuse in Medicare.
CMS is required by the Social Security Act to recompete contracts under the
DMEPOS Competitive Bidding Program at least once every three years.
Suppliers must then compete to become a Medicare contract supplier by
submitting bids to provide certain items in CBAs.
CMS also announced several updates to the DMEPOS Competitive Bidding
Program for Round 2019. For example, CMS is adding insulin pumps and
supplies as a product category to be bid in the national CBA. CMS is also
adding 10 new CBAs to the program for the Continuous Positive Airway
Pressure (CPAP) devices and related accessories product category only. In
five of these ten new CBAs, payment for the CPAP device, related
accessories and services will be made on a bundled, non-capped monthly
rental basis, while payment in the other five CBAs will be made on a capped
monthly rental basis like all other existing CBAs.
CMS is also including a lead item bidding methodology for certain items in
Round 2019 in which suppliers will bid for a lead item within a grouping of
similar equipment that takes into account the costs of furnishing all of
the equipment in the grouping. The single payment amount for the other
items within the grouping will be based on their relative differences in
fees when compared to the lead item.
Round 2019 bidders must also obtain a $50,000 bid surety bond for each CBA
in which it submits a bid, as required by the Medicare Access and CHIP
Reauthorization Act of 2015. Bid surety bonds will be forfeited for bidders
who do not accept a contract for a competition (CBA and product category
combination) in which the bidder’s composite bid for the competition is at
or below the median composite bid rate for all bidding entities included in
the calculation of the single payment amounts within the competition.
For more information,
FTC Probing Mylan Over EpiPen
The FTC is probing whether Mylan illegally blocked competition to its
life-saving EpiPen, the company said Jan. 30.
The FTC is investigating whether Mylan made small changes to the allergy
treatment to effectively shield it from cheaper rivals. The FTC is also
looking at whether Mylan entered into any agreements that delayed cheaper
versions of the EpiPen from coming to market.
Mylan denied any wrongdoing. “Mylan received an information request from
the FTC months ago as part of a preliminary investigation,” the company
said in a statement. “Any suggestion that Mylan took any inappropriate or
unlawful actions to prevent generic competition is without merit.”
The company, which has faced backlash for repeatedly raising EpiPen prices,
claims its treatment has always faced competition. It also said Teva has
patent licenses that will allow the company to launch a generic alternative
years before the EpiPen’s patents expire.
Former Tenet Executive Indicted for Defrauding Medicare, Medicaid
John Holland, a former senior vice president of operations for Tenet
Healthcare Corporation’s southern states region, was indicted on four
counts for his alleged role in a $400 million scheme to defraud Medicare
and Medicaid, the
Justice Department said Feb. 1.
Holland allegedly paid bribes and kickbacks for patient referrals over a
13-year period from about 2000 to 2013, and concealed the activity by
circumventing internal accounting controls and falsifying company books and
records. The kickbacks and bribes helped Tenet bill the Georgia and South
Carolina Medicaid programs for more than $400 million, and Tenet obtained
more than $149 million in Medicaid and Medicare funds based on the patient
referrals, the indictment alleges.
Holland also falsely certified to HHS that Tenet was complying with terms
of participation in Medicare and Medicaid and with a corporate integrity
agreement. Tenet received more than $10 billion in payments from federal
health care programs during the four years the agreement was in effect, the
Justice Department said.
4. State Activities
California: Workers Air Concerns Over Rising Health Care Costs
More than 1,000 workers and union leaders attended a meeting Feb. 1 in San
Francisco with officials from the Department of Managed Health Care to air
their concerns about rising health care costs. The meeting was the first
annual public meeting mandated by a 2015 state law that requires health
plans to publicly explain how they set premiums. Rate review already
exists in the small group and individual markets, but California regulators
have no authority to reject rate hikes.
Meanwhile, California lawmakers are trying to keep the pressure on
drugmakers. Democrat Jim Wood, chairman of the Assembly health committee,
introduced a bill, AB 265, which would prohibit the use of coupons for
pharmaceutical drugs when other FDA-approved options are cheaper. Medicare
and Medicaid already prohibit the use of coupons. Massachusetts banned
their use in 2012, and there is similar legislation in New Jersey.
The head of California’s Senate health committee, Sen. Ed Hernandez, has
already reintroduced a version of his drug-pricing transparency bill that
was shelved last year.
Florida: Gov. Scott Proposes Cuts to Hospitals’ Medicaid Payments
Florida Gov. Rick Scott has proposed deep cuts to hospitals’ Medicaid
payments in his $83 billion budget released last week. Scott, a former
hospital executive, has proposed changing the state’s Medicaid law to lower
the minimum and maximum amounts an HMO must pay a hospital to participate
in its network. Scott’s proposed changes would generate $581 million in
Hawaii: Lawmakers Attempt to Save Major Parts of ACA
Hawaii lawmakers are already trying to save major parts of the ACA. Bills
introduced in the House and Senate include an individual mandate and
consumer protections, including the prohibition on insurers denying
coverage based on pre-existing conditions and lifetime maximums for
coverage. The bill also allows young adults up to age 26 to stay on their
parents’ health insurance and ensures that women are not charged
more than men for insurance.
Texas: Officials Requesting Continued Funding for 1115 Waiver
Texas officials have
asked CMS to keep funding the
state’s Medicaid 1115 waiver—which spends billions of dollars to cover
hospitals’ uncompensated care costs and delivery system reform
efforts—through September 2019. Under the extension, those programs would
both be funded at $3.1 billion for 2018 and then prorated for eight months
after that. The Texas waiver is now set to expire at the end of the
In arguing for the extension, state officials say providers “require a
level of financial and operational security” to keep serving Medicaid
enrollees and the uninsured while Republicans in Washington work through
Obamacare repeal and develop new policies for 1115 waivers. But the Obama
administration sought to clamp down on these types of waiver requests from
states, arguing that supplemental funding for hospitals should not pay for
expenses that would otherwise be covered through Medicaid expansion.
Nevada: Gov. Sandoval Proposes $20 Million Cut in Mental Health Funding
Nevada Gov. Brian Sandoval has proposed to cut $20 million in state mental
health funding, including eliminating 112 jobs across the state, arguing
that the Medicaid expansion has insured more people and decreased demand
for services. The proposal is part of his
for next year. The budget does include a $173 million boost for Medicaid,
which may include mental health services. Health officials say since Nevada expanded Medicaid, fewer people are seeking state-provided mental
New Jersey: State Legislature to Vote on Drug Addiction Reform Bill This Week
The New Jersey Legislature will vote on a bill this week to implement parts
of a drug addiction reform plan that Gov. Chris Christie proposed last
month. The bill would mandate insurers cover 28 days of inpatient treatment
without prior authorization or medical necessity review. Christie says it
will be the “most aggressive law in the country in terms of providing
access to care.” However, once passed, it would only apply to
state-regulated health insurance plans, which account for around 30 percent
of the total market. Two other states—New York and Massachusetts—require
state-regulated health plans to cover 14 days of treatment. The same bill
also limits initial opioid prescriptions for acute pain to a five-day
Biden Foundation Established to Champion Equal Rights
Former Vice President Joe Biden and former second lady Jill Biden announced
Feb. 1 that they would be launching a foundation to champion equal rights
for all people.
The Biden Foundation will advance issues important to the former vice
president, such as supporting the
Cancer Moonshot Initiative, the Violence Against Women Act, the U.S. Military, equal rights and
affordable education, focusing on community colleges.
“The Biden Foundation is an educational foundation dedicated to exploring
the ways that everyone — no matter their income level, race, gender, age or
sexuality — can expect to be treated with dignity and to receive a fair
shot at achieving the American dream,” the announcement read.
In a video announcing the foundation, Biden said he was “more optimistic”
than he had ever been, praising the millennial generation as “the most
open, most tolerant, most generous generation in American history.” He
discussed the societal evolution on gay marriage as an example of how
societal shifts are possible.
The foundation’s board will include longtime Biden adviser and former Sen.
Ted Kaufman, Valerie Biden Owens, the vice president’s sister and other
former Biden aides and supporters.
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 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.
CMS Proposes Average 0.25 Percent Hike for Medicare Advantage Plans
On Feb. 1, the Trump administration issued guidance that proposes updates
to the methodologies used to pay Medicare Advantage plans and Part D
sponsors. The guidance calls for raising Medicare Advantage payments an
average of 0.25 percent.
Health plans take in roughly $200 billion a year from the government to
provide care for seniors enrolled in private Medicare plans. There are
currently more than 18 million people enrolled in Medicare Advantage,
accounting for roughly a third of all of the program’s beneficiaries. More
than 1 million seniors have been added to private Medicare plans in the
past year, continuing a trend of robust growth that goes back a decade.
“These proposals will continue to keep Medicare Advantage strong and stable
and provide high quality, affordable care to seniors and people living with
disabilities,” said Patrick Conway, acting administrator of the Centers for
Medicare and Medicaid Services.
Obamacare included major cuts to Medicare Advantage—America’s Health
Insurance Plans puts the total figure at $200 billion—that were designed to
bring payments more in line with traditional government-run Medicare. Last
year, the federal government paid private plans an average of 102 percent
of traditional fee-for-service costs per member.
UnitedHealth Group and Humana are the biggest national players, accounting
for roughly 40 percent of the Medicare Advantage market in 2015.
CMS will accept comments until March 3 and the final notice will be posted
on April 3.
To read a fact sheet on the rate proposal,
Heritage Foundation Highlights Decrease in Competition, Choice in Obamacare Exchanges
In a new paper, the Heritage Foundation found that exchange customers in
nearly 70 percent of U.S. counties have two or fewer insurers to choose
from. That is up from just 36 percent of counties last year, mostly a
consequence of larger insurers’ leaving the market. The authors, Edmund
Haislmaier and Alyene Senger, suggest the reduction does not bode well for
competition in 2018 and both advocate for Obamacare’s full repeal. “Given
that proponents of the law expected it to increase insurer competition,
diminishing consumer choice and insurer competition can be added to the
list of ACA failures,” they wrote.
For the full paper,
GAO Identifies Ways to Reduce Improper Medicaid Payments
new testimony, GAO identifies some ways to reduce improper payments in the Medicaid
program, such as by confirming that Medicaid’s participants and health care
providers meet eligibility requirements, effectively overseeing managed
care organizations and ensuring that participants don’t have duplicate
coverage through private insurance. According to GAO, CMS has taken steps
to address some of these issues, but more work is needed—at both the state
and federal levels.
Medicaid has an estimated $36 billion in improper payments in fiscal year
GAO Discusses Prior Work on Patient Protection and Affordable Care Act
In new testimony, GAO discusses prior work regarding the Patient Protection
and Affordable Care Act. The act changed many aspects of the private health
insurance markets, including establishing health insurance exchanges in
each state beginning in 2014—intended to allow consumers to compare and
select health plans.
GAO discusses prior work that found:
enrollment in health plans was concentrated among a small number of
health insurance issuers;
consumers in the individual market had access to more plans in 2015
than 2014, with varying premiums; and
enrollees who obtained exchange coverage were generally satisfied with
their plans, with affordability still a concern for some.
For more information,
GAO Reports on Gambling Disorders in DOD and Coast Guard
In a new report, GAO reviewed gambling among members of the armed forces.
The report (1) describes what is known about the prevalence of gambling
disorder among servicemembers in DOD and the Coast Guard; (2) assesses
DOD’s and the CG’s approaches to diagnosing and treating servicemembers for
the disorder; and (3) evaluates the extent to which guidance at both
facilities addresses gambling disorder prevalence.
GAO made several recommendations, including that DOD incorporate gambling
disorder questions in a systematic screening process and that DOD and the
CG update guidance to include gambling disorder. DOD concurred with five
recommendations focused on updating guidance, but did not concur with
incorporating gambling questions into a screening process due to the
disorder’s low prevalence. GAO maintained that this recommendation is still
valid because, among other things, DOD’s prevalence data is limited. The CG
concurred with the two recommendations focused on updating guidance.
To see the report,
If you have any questions, contact the following individuals at
Kennan, Senior Vice President
Charlie Iovino, Vice
Caroline Perrin, Research Assistant
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