On Nov. 8, 2023, the Senate Finance Committee voted 26-0 to approve the Better Mental Health, Lower Cost Drugs, and Extenders Act. Among its other provisions, the bill, for which final legislative text has not yet been released, would, for the first time, mandate minimum prices that Medicare Part D plans, and the pharmacy
Earlier this month, in response to the end of the COVID-19 public health emergency, the Department of Health and Human Services (“HHS”) issued the Eleventh Amendment to the declaration under the Public Readiness and Emergency Preparedness Act (“PREP Act”) for medical countermeasures against COVID-19. The PREP Act allows the Secretary of HHS to provide liability immunity, through a declaration, to certain individuals and entities against claims associated with the manufacture, distribution, administration, or use of certain defined medical products or devices, referred to as countermeasures.
HHS originally announced this PREP Act declaration in January 2020 in response to the COVID-19 pandemic (the “Declaration”). The Declaration has been amended at various points throughout the pandemic. This latest amendment makes several different updates:Continue Reading HHS Amends and Extends COVID-19 PREP Act Declaration
On April 18, 2023, the U.S. Department of Health and Human Services (“HHS”) announced its plan to maintain access to COVID-19 vaccines and treatment following the end of the Public Health Emergency on May 11, 2023. The “HHS Bridge Access Program for COVID-19 Vaccines and Treatments” is a $1.1 billion public-private partnership between HHS, pharmacy chains, and drug manufacturers. Essentially, HHS and drug manufacturers will provide COVID-19 vaccines and treatments, like Paxlovid and Lagevrio, to pharmacy chains, which will administer them to individuals without insurance at no cost.
Under the program, the Centers for Disease Control and Prevention (“CDC”), will use its existing authority under Section 317 of the Public Health Service Act to purchase and distribute COVID-19 vaccines and allocate them through its network of 64 state and local health departments, as well as through Health Resources and Services Administration (“HRSA”) supported health centers.Continue Reading HHS Proposes Bridge Access Program for COVID-19 Vaccines and Treatments
On April 7, 2023, only minutes apart, two federal district courts issued rulings on cases challenging the Food and Drug Administration’s regulations governing mifepristone, a key medication for women seeking an abortion. Both rulings faulted the FDA’s handling of the approval and its subsequent restrictions on the dispensing of mifepristone, but the two rulings came to very different conclusions as to what the availability of the drug should be.
Judge Matthew Kacsmaryk of the U.S. District Court for the Northern District of Texas issued a 67-page opinion ordering that the FDA’s initial approval of the drug, which was approved in 2000, should be stayed pending the court’s full review of the merits of the case. The court then stayed its own order for seven days to allow the FDA to appeal to the U.S. Court of Appeals for the Fifth Circuit.
Just minutes later, Judge Thomas Rice of the U.S. District Court for the Eastern District of Washington issued a 31-page opinion ordering FDA and HHS not to make any changes to the availability of mifepristone under the current operative Risk Evaluation and Mitigation Strategy (REMS) program, which requires the drug to be prescribed and dispensed only by certified providers, among other requirements. Unlike Judge Kacsmaryk, whose injunction has nationwide effect, Judge Rice limited the effect of his order to only the 17 states and the District of Columbia who brought the challenge in his court. The 17 plaintiff states in this lawsuit are: Arizona, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Maryland, Michigan, Minnesota, Nevada, New Mexico, Oregon, Pennsylvania, Rhode Island, Vermont, and Washington and the District of Columbia.
The most difficult-to-reconcile aspect of the two orders is the fact that Judge Kacsmaryk’s order is a nationwide stay of the drug’s approval, while Judge Rice’s order to maintain the status quo availability only applies to the specific plaintiffs. Notably absent from the Washington order’s applicability would be California, Massachusetts, New Jersey, New York, North Carolina, New Hampshire, and Virginia.Continue Reading Mifepristone Cases – Our Thoughts
The Department of Health and Human Services (“HHS”) has proposed a rule that updates retail pharmacy standards for electronic transactions adopted under the Administrative Simplification subtitle of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). There is a 60-day public comment period for this rule, which closes on January 9, 2023. This proposed rule, if finalized, would modify the currently adopted National Council for Prescription Drug Programs (“NCPDP”) Telecommunications Standard Implementation Guide (“TSIG”) and its equivalent batch standards.
Specifically, the proposed rule would adopt TSIG version F6, and its equivalent batch standards NCPDP Batch Standard Implementation Guide, Version 15, and Batch Standard Pharmacy Subrogation Implementation Guide Version 10 (for non-Medicaid health plans).
The new standards will allow retail pharmacies with multiple locations to send one batch mode transaction that meets the F6 standard. Among the changes from version to version are new data fields, new data segments, and new functionality.Continue Reading HHS Proposes Rule to Update Retail Pharmacy Standards for Electronic Transactions under HIPAA
In an opinion authored by Justice Samuel Alito and joined by four of the other conservatives, The Supreme Court in Dobbs v. Jackson Women’s Health Organization held that there is no federal constitutional right to an abortion, and that the decision to regulate abortion should be governed exclusively by state law. In doing so, the decision overruled The Supreme Court’s previous decisions of Roe v. Wade decided in 1973 and Planned Parenthood of Southeastern PA v. Casey decided in 1992.
The Dobbs opinion tracks closely with the previous leaked draft opinion from The Supreme Court and includes concurring opinions from Justice Thomas, Justice Kavanaugh, and Chief Justice Roberts, as well as a dissent by Justices Breyer, Sotomayor and Kagan.
The Chief Justice concurred in the judgment but wrote separately to indicate that he would have only upheld the Mississippi law, and stopped short of overturning the precedents of Roe and Casey.
Decision changes landscape of reproductive health care rights
The Court’s decision, which was effectively 6-3 given the Chief Justice’s concurrence in the judgment, changes the landscape of reproductive health care rights throughout the country.Continue Reading Supreme Court Overturns Roe and Casey
Now that U.S. Supreme Court has overturned Roe v. Wade in Dobbs v. Jackson Women’s Health, the implications of that action will be far reaching both for fertility practices and for health care providers in general.
The Reed Smith Reproductive Health Working Group has generated a series of “unanswered questions” client updates to reflect the…
As noted in an earlier post here, the U.S. Supreme Court is expected to issue an opinion in the Dobbs v. Jackson Women’s Health case sometime before its recess in July. A draft majority opinion, authored by Justice Samuel Alito and overturning Roe v. Wade, was leaked to news media in May.
While we won’t…
On June 7, 2022, the Federal Trade Commission (FTC) announced that it would conduct an inquiry into the competitive impact of contracting and other business practices of pharmacy benefit managers (PBMs), including their effects on access to and affordability of prescription drugs. As part of the inquiry, which is similar to FTC inquiries into other aspects of the health care industry, the FTC issued orders under Section 6(b) of the FTC Act requiring the six largest PBMs to provide information and records to the Commission.
The five FTC commissioners voted unanimously on June 6, 2022 to conduct the study and issue the Section 6(b) orders. According to the FTC mission statement, Section 6(b) “enables [the FTC] to conduct wide-ranging studies that do not have a specific law enforcement purpose.”
In February, an earlier proposed review of PBMs failed to receive approval on a 2-2 party-line vote, with the two Republican Commissioners, Noah J. Phillips and Christine S. Wilson, voting against the proposed study. Commissioner Alvaro Bedoya was confirmed by the Senate in May, giving Democrats three seats on the Commission.
Commissioners Phillips and Wilson issued a statement indicating that they had voted to approve the current inquiry because it has a different scope than the previously proposed study, including relationships between PBMs and both pharmacies and pharmaceutical manufacturers, “including, critically, how those practices might impact out-of-pocket costs for consumers.”
The FTC stated that its inquiry will examine PBMs’ role as middlemen who are hired by health plans to negotiate rebates and fees with drug manufacturers, create drug formularies and related policies, and reimburse pharmacies for patients’ prescriptions. The Commission said that PBMs “often have enormous influence on which drugs are prescribed to patients, which pharmacies patients can use, and how much patients ultimately pay at the pharmacy counter.” Chair Linda M. Khan stated that the FTC had received complaints about PBM practices from patients and professionals across the healthcare system, several of which the inquiry will examine. Continue Reading FTC announces inquiry into PBM practices and orders PBMs to provide information
In the first advisory opinion of 2022, the Department of Health and Human Services’ Office of Inspector General (OIG) allowed Medicaid beneficiaries to qualify for a benefit available to low-income individuals, even though the arrangement would not qualify as a “retailer reward.”
The OIG stated it would not seek enforcement of the federal Anti-Kickback Statute or the Beneficiary Inducements Civil Monetary Penalty Statute (CMP Law) for an arrangement proposed by a web-based retailer that that sells a wide variety of consumer goods and services, and that offers fee-based membership programs with a number of benefits, including pharmacy-related benefits.
The retailer requested an advisory opinion from OIG to allow individuals to use Medicaid enrollment to qualify as eligible for participation in the discount programs that provided certain expedited free shipping, and discounts on food and grocery items. In issuing a favorable advisory opinion, OIG determined that allowing individuals to use their Medicaid enrollment status as a qualification presented a minimal risk of fraud and abuse to federal health programs.Continue Reading OIG permits retailer to use Medicaid enrollment as qualification for discount program
On August 12, 2021, the Seventh Circuit joined the Third, Eighth, Ninth, and D.C. Circuits in holding that the “objective reasonableness” standard for determinations of scienter, as set forth by the Supreme Court in Safeco Insurance Co. of America v. Burr, 551 U.S. 47, 70 (2007), applies in the context of False Claims Act (FCA) litigation. In doing so, the Seventh Circuit observed that, under Safeco, a defendant cannot possess the requisite scienter under the FCA if: (1) it has an objectively reasonable reading of the statute or regulation; and (2) there was no authoritative guidance warning against its view. This case has significant implications for defendants in FCA litigation by finding that an objectively reasonable interpretation of the law will defeat allegations of false claims.
Further, the decision is the latest victory in a spate of cases brought by the plaintiffs’ bar claiming that pharmacies are required to report special prices—such as membership club prices or matched competitor prices—as their usual and customary (U&C) prices. Virtually every pharmacy that has operated a membership club has faced scrutiny through actions under the FCA and consumer-class actions. The Seventh Circuit’s decision comes in the wake of the recent jury verdict in favor of CVS in the matter of Carl Washington (formerly known as Corcoran) et al. v. CVS Pharmacy, Inc., No. 15-cv-03504 (N.D. Ca. Jun. 24, 2021). This victory will support pharmacies’ defenses in other similar litigation alleging the submission of false U&C prices, particularly when the alleged false conduct occurred before 2016, given that the Seventh Circuit found that reporting retail prices—as opposed to special prices such as price matches—was an objectively reasonable approach to U&C reporting.
The Department of Health and Human Services (HHS) has modified HIPAA retail pharmacy transaction requirements to differentiate between partial fill and full refills of opioids and other Schedule II drug prescriptions. Specifically, HHS has finalized the requirements for use of the National Council for Prescription Drug Programs (NCPDP) Telecommunication Standard Implementation Guide, Version D, Release …
The Department of Health and Human Services (HHS) has issued a proposed rule that would modify the current HIPAA transaction standard for retail pharmacy transactions (the August 2007 revision of NCPDP telecommunications standard D.0) with respect to claims and similar transactions for Schedule II drugs. HHS states that the change would enable covered entities to…
The House of Representatives approved two “gag clause” bills on September 25, 2018 that would prevent insurers from restricting pharmacies from informing consumers about lower cost, out-of-pocket prices for their prescriptions. The bills were approved by the Senate earlier this month, and are now cleared for the President’s signature.
Specifically, S 2553, the Know…
Several Congressional hearings are scheduled next week and into December on health policy issues, including:
- A November 17 Senate Finance Committee hearing entitled “Physician Owned Distributors: Are They Harmful to Patients and Payers?”
- A November 17 House Judiciary Subcommittee on Regulatory Reform hearing on “The State of Competition in the Pharmacy Benefit Manager
CMS published an interim final rule with comment period (IFC) on May 6, 2015 that modifies a previously-adopted regulatory requirement regarding qualifications to prescribe Part D drugs. By way of background, under a final rule published May 23, 2014, Part D sponsors must deny a pharmacy claim for a Part D drug if…
CMS has released the 2016 Medicare Advantage (MA) and Part D Rate Announcement and Call Letter. According to a CMS fact sheet, the final policies increase Medicare Advantage rates by 1.25% (compared to an earlier forecast of a 0.95% reduction), although considering coding trends the agency expects revenues to increase by 3.25%. In…
The OIG has released its March 2015 “Compendium of Unimplemented Recommendations,” which highlights the OIG’s top 25 recommendations for cost savings and/or quality improvements in HHS programs, along with other significant unimplemented recommendations. High-priority recommendations address the following areas, among others:
- Payment Policies and Practices: Expand the DRG window to include additional days prior to
On September 19, 2014, the Office of Inspector General (OIG) of the Department of Health & Human Services issued a Special Advisory Bulletin (SAB) in which it identified several potential regulatory risks to federal health care programs as the result of coupon programs used by drug manufacturers to reduce or eliminate patient copayments for brand-name drugs. In the SAB, the OIG explains that coupon program sponsors and pharmacies will risk the receipt of penalties if they do not take steps to actively prevent federal health care program beneficiaries from using the coupons. According to the OIG, these coupon programs qualify as examples of remuneration offered to consumers to encourage the purchase and use of specific items, and therefore implicate the federal Anti-Kickback Statute. In addition, a claim that includes items or services resulting from such a kickback violation would constitute a false or fraudulent claim under the False Claims Act.
Continue Reading HHS OIG Paints with Broad Brush in Criticizing Drug Manufacturer Coupon Programs
On May 23, 2014, CMS published a final rule revising the Medicare Advantage (MA) and Part D prescription drug program regulations to implement various statutory requirements, strengthen beneficiary protections, improve program efficiencies and payment accuracy; and clarify program requirements, generally effective for contract year 2015. CMS estimates that the proposed rule would reduce Medicare spending…