Legislative Developments

The House Energy and Commerce Committee seems poised to make substantial changes to the Food and Drug Administration’s (“FDA’s”) Accelerated Approval Program. The committee’s Democratic chairman, Frank Pallone, Jr. (D-NJ) and Republican ranking member, Cathy McMorris Rodgers (R-WA) have proposed competing bills that were featured prominently in the Health Subcommittee’s legislative hearing on March 17, 2022.

The Accelerated Approval Program was developed in 1982, largely in response to the HIV/AIDs epidemic, to expedite approval of novel drugs that treat serious conditions with unmet medical needs based on a surrogate endpoint.  Drugs that receive accelerated approval must undergo post-approval (Phase IV) studies to confirm the intended clinical benefit.  If the clinical testing does not demonstrate the intended clinical benefit, FDA has mechanisms to remove the drug from the market.

However, concerns have mounted regarding FDA’s ability to remove ineffective drugs from the market, and those concerns were punctuated during a February 3, 2022 Health Subcommittee hearing on the reauthorization of FDA User Fees. Dr. Patrizia Cavazzoni, the Director of the Center for Drug Evaluation and Research at the FDA testified that the program’s existing mechanism to withdraw accelerated approvals is cumbersome, resource intensive, and seldom used.

Continue Reading Competing bills propose amendments to FDA’s accelerated approval program

In November 2020, four months after the Trump Administration issued a series of Executive Orders reiterating its policy goals on reducing the costs to consumers for prescription drugs and directing the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”) to implement those policy objectives, HHS-OIG issued a Final Rule to amend certain provisions in the safe harbor regulations under the Federal Anti-Kickback Statute (“AKS”). The Final Rule included three key provisions:

  1. Elimination of discount safe harbor protection for manufacturer rebates paid directly, or indirectly through a pharmacy benefit manager (“PBM”) to Medicare Part D or Medicare Advantage plans (the “Rebate Rule”);
  2. Creation of a new safe harbor to protect point-of-sale (“POS”) price reductions paid by manufacturers to Medicare Part D plans, Medicare Advantage plans, and Medicaid managed care organizations (“MCOs”); and
  3. Creation of a new safe harbor to protect fair-market-value (FMV) service fees paid to PBMs by manufacturers.

The Final Rule imposed a January 1, 2022, effective date for the Rebate Rule. However, in January 2021, two months after issuance of the Final Rule and in connection to a lawsuit brought by the Pharmaceutical Care Management Association challenging the Rebate Rule, the Biden Administration agreed to delay the Rebate Rule’s effective date to January 1, 2023, as reflected in an Order by the United States District Court for the District of Columbia.

In the intervening time though, Congress passed the Infrastructure Investment and Jobs Act (the “Infrastructure Act”). That law, signed by President Biden on November 15, 2021, further delayed implementation of the Rebate Rule to January 2026. Thus the rule, which many thought would be eliminated as part of paying for the cost of the infrastructure bill, was still alive, if only delayed until the middle of the next presidential term.

Continue Reading Future of discount safe harbor for prescription drugs remains uncertain

On June 30, 2020, United States Senators Elizabeth Warren (D-Mass.) and Marco Rubio (R-Fla.) introduced legislation proposing the Committee on Foreign Investment in the United States (CFIUS), an interagency committee authorized to review certain transactions involving foreign investment in the United States for national security concerns, assist the Federal Trade Commission (FTC) in “conduct[ing] a

The House of Representatives has taken action on a number of bills to modify certain Affordable Care Act (ACA) provisions, revise Medicare Advantage policies, and make other health policy changes.

On June 23, 2015, the House voted to approve H.R. 1190, a bill to repeal the Independent Payment Advisory Board (IPAB), by a vote of 244 to 154. The IPAB was established by the ACA to submit Medicare spending plans to Congress if projected spending growth exceeds specified targets. Under the ACA, future IPAB’s proposals would go into effect automatically unless Congress enacts alternative legislation achieving required savings levels. IPAB members have not been appointed, and the spending trigger for IPAB recommendations has not yet been reached. The Administration has expressed its opposition to the bill, noting that while the IPAB “is not projected to be needed now or for a number of years given recent exceptionally slow growth in health care costs, it could serve a valuable role should rapid growth in health costs return.”

This action follows House approval last week of H.R. 160, a bill to repeal the ACA medical device tax, applicable to sales in calendar quarters beginning after the date of enactment. The Administration also opposes enactment of this legislation on grounds that it would increase the deficit. In other action, the House also approved the following health policy bills last week:

Continue Reading House Passes Bills to Repeal ACA Medical Device Tax and IPAB, Revise Medicare Advantage Policy

As previously reported, Congress has been considering financing Trade Adjustment Assistance (TAA) reauthorization legislation in part through future Medicare provider cuts. Specifically, as approved by the Senate on May 22, 2015, H.R. 1314 would apply a 0.25% across-the-board cut, known as sequestration, to Medicare provider and plan payments during the second half of FY

On May 5, 2015, the Senate approved the conference report to accompany S.Con.Res. 11, the concurrent resolution setting forth the federal budget for FY 2016 and establishing budgetary target levels for FYs 2017 through 2025, following earlier House approval. The conference agreement, which was approved on largely party-line votes, includes nonbinding language supporting Affordable Care

The House and Senate are considering trade legislation that would be financed in part by $700 million from extended Medicare sequestration authority – much to the consternation of the health care provider community. By way of background, under the “Protecting Access to Medicare Act of 2014” (PAMA), Congress “front-loaded” the Medicare reimbursement cuts under the

On April 21, 2015, the House of Representatives approved H.R. 471, the Ensuring Patient Access and Effective Drug Enforcement Act of 2015. The bipartisan legislation would clarify the Controlled Substances Act to establish consistent enforcement standards intended to protect against diversion while promoting patient access to medically-necessary controlled substances.

Today President Obama signed into law H.R. 2, the “Medicare Access and CHIP Reauthorization Act of 2015” (MACRA), which reforms Medicare payment policy for physician services and adopts a series of policy changes affecting a wide range of providers and suppliers. Most notably, MACRA permanently repeals the statutory Sustainable Growth Rate (SGR) formula, achieving a goal that has eluded Congress for years. Now, after a period of stable payment updates, MACRA will link physician payment updates to quality, value measurements, and participation in alternative payment models.
Continue Reading President Obama Signs MACRA: Permanently Reforms Medicare Physician Reimbursement Framework, Includes Other Health Policy Provisions

On March 25, 2015, the House of Representatives approved (with no Democratic votes) H.Con.Res. 27, a budget resolution providing instructions to Congressional committees on the federal spending framework for FY 2016. Among other things, the resolution calls for repealing the ACA “in its entirety,” transforming Medicare into a premium-support program, and replacing the ACA Medicaid

The Senate has adjourned until April 13, 2015 without taking action on the House-approved Medicare Access and CHIP Reauthorization Act, which would repeal the Sustainable Growth Rate (SGR) formula, reform Medicare physician payments, and make other policy changes.  In the interim, the 21.2% physician fee schedule cut mandated by the SGR will be triggered

Repeals SGR Formula, Adopts Medicare and Other Policy Changes

Today the U.S. House of Representatives approved a major Medicare package, the Medicare Access and CHIP Reauthorization Act (MACRA), which would reform Medicare reimbursement policy for physician fee schedule services and adopt a series of policy changes affecting a wide range of providers and suppliers.

Most

Yesterday the House of Representatives approved the following health policy bills:

  • H.R. 284, the Medicare DMEPOS Competitive Bidding Improvement Act of 2015 – which would require Medicare suppliers that bid under a DME, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to obtain a $50,000-$100,000 bid surety bond for each competitive bidding area (CBA). 

On March 16, 2015, the House of Representatives is scheduled to consider the following health policy legislation:

  • H.R. 284, the Medicare DMEPOS Competitive Bidding Improvement Act of 2015 — which would require Medicare suppliers that bid under a DME, prosthetics, orthotics, and supplies (DMEPOS) competitive bidding program to submit binding bids or risk forfeiture

On February 2, 2015, the Obama Administration released its proposed federal budget for fiscal year (FY) 2016. The budget would impact all types of health care providers, health plans, and drug manufacturers if adopted as proposed – which is unlikely given Republican control of the House and Senate. Nevertheless, Congress can be expected to consider the Medicare and Medicaid savings proposals (many of which are carry-overs from prior budgets) during expected debate in the coming months on Medicare physician fee schedule (MPFS) reform legislation or during future budget negotiations. The following is a summary of the major Medicare, Medicaid, and related policy proposals contained in the FY 2016 budget proposal.
Continue Reading Obama Administration Releases FY 2016 Budget Proposal with Medicare/Medicaid Provisions

On January 27, 2015, the House Energy and Commerce Committee released its “21st Century Cures Act” discussion draft, the product of a year-long, bipartisan effort by the Committee to accelerate the pace of medical cures in the United States. The nearly 400-page bill addresses a wide range of topics, including, among many other things: the

On January 27, 2015, the House Energy and Commerce Subcommittee on Health held a hearing on bipartisan public health legislation, including:

  • Ensuring Patient Access to Effective Drug Enforcement Act (to improve enforcement efforts regarding prescription drug diversion and abuse);
  • Improving Regulatory Transparency for New Medical Therapies Act (to amend the Controlled Substances Act to improve