Washington Healthcare Update

November 13, 2017

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This Week: DOD bill could undermine FDA authority…CMS pushes 1115 waivers for opioidepidemic…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 requiresthat most Americans obtain health coverage. The Republican House-proposedtax bill could be a vehicle for such an effort. However, so far, the billhas moved through markup without such a provision being added.

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

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


DOD Bill Could Undermine FDA

Section 732 of the Senate’s version of the National Defense AuthorizationAct, HR 2810, creates a new regulatory structure that would allow thePentagon to sign off on unapproved devices and drugs for emergency use onmilitary personnel and others in harm’s way. Never before has authoritybeen provided to an agency to decide approval for drugs and devices for itsown use and outside the FDA.

HHS says it would undermine medical safety and potentially put soldiers atrisk. FDA currently has sole authority to authorize drugs and devices foremergency use.

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

FDA offered an alternative proposal, which would have expedited drug anddevice reviews and approval upon a DOD request, but the language wasn’taccepted.

Senate HELP Chairman Lamar Alexander, House Energy and Commerce ChairmanGreg Walden and Sen. Richard Burr asked congressional leaders to hold offon signing the annual defense policy bill, saying that it contains languagethat will put soldiers at risk and undermine the FDA. Instead of delaying avote on the legislation to make changes, the House Armed Services andEnergy 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 FinanceCommittee, and Sen. Patty Murray (D-WA), ranking member of the SenateHealth, Education, Labor and Pensions Committee, laid out a series ofrequirements in a letter to President Trump that they say the president’snext nominee to head the Department of Health and Human Services must meetto gain Democratic support.

Their criteria include that the nominee support: deployment of HHSresources to address the opioid crisis; tobacco regulation, especially forproducts targeting youth; nutrition policies that provide information toconsumers; efforts to reduce the cost of prescription drugs; and strongsafety 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 ActingSecretary Eric Hargan on Nov. 2 asking him to prioritize funding of CMS’sOpen Payments database.

The Open Payments database, created under the bipartisan Physician PaymentsSunshine Act, requires drug and device manufacturers and group purchasingorganizations to report payments to teaching hospitals and physicians. CMSfirst published that database in 2014.

The senators believe this information is of particular concern at a timewhen overprescribing of opioid medications has exacerbated a public healthcrisis nationwide. Grassley and Blumenthal are the lead sponsors of a billto expand the Physician Payments Sunshine Act disclosure requirements toapply to nurse practitioners and physician assistants, who are currentlynot 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-riskdirect-to-consumer genetic risk tests. Commissioner Scott Gottlieb made theannouncement in a blog post.

Labs could seek a one-time review of their fitness to deliver safe andeffective tests; after they have passed this test, Gottlieb said, noadditional approvals would be required as long as the labs demonstratedthey 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 ordernotes that particularly risky tests—such as those testing life-threateningdiseases—would not be exempt from premarket requirements.

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

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

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

Gottlieb also said he will be contacting wholesalers and other supply chainintermediaries in the coming weeks to inform them of FDA’s interest inmaking sure generic firms can gain access to samples of branded productsfor studies needed to get a generic approved. Brand-name companies havetried to use the REMS programs or contracts with wholesalers to blockgeneric 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 demonstrationwaivers aimed at curbing the opioid epidemic and to encourage more statesto apply for such waivers. These waivers are designed to create a continuumof care including residential care—for which these waivers have alreadybeen used to get around the IMD exclusion. CMS also approved substance usedisorder (SUD) waivers in Utah and New Jersey.

Instead, the new policy allows states to apply for changes to theirMedicaid program to deliver care in the substance abuse arena withoutrequiring them to modify their entire continuum of care.

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

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

The Utah waiver will expand Medicaid treatment to up to 6,000 childlessadults who are either homeless, involved in the criminal justice system orneed substance abuse treatment. The approved waiver does not includeproposed amendments that included Medicaid work requirements and timelimits on coverage. The state said enrollment for newly eligible Medicaidbeneficiaries will begin immediately.

3. States

Maine Votes to Expand Medicaid

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

Maine Gov. Paul LePage said on the day after the election that “I will notsupport increasing taxes on Maine families, raiding the rainy-day fund orreducing services to our elderly or disabled.” LePage is a Republican whois term-limited next year and has spearheaded the opposition to the ballotinitiative.

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

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

Ohio Measure on Drug Prices Defeated

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

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

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

4. Reports

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

The GAO released a report concerning Medicare’s oversight of the use ofopioids and their associated risks with the Medicare populations. The GAOrecommended the CMS should gather information over time on the number ofbeneficiaries at risk of harm from opioids, including those who receivedhigh opioid morphine equivalent doses regardless of the number ofpharmacies or providers as part of the assessing progress over time inreaching 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 atMcGuireWoods Consulting:

StephanieKennan, Senior Vice President
Anne Starke, Research Associate

Founded in 1998,McGuireWoods Consulting LLC(MWC) is a full-service public affairs firm offering infrastructure andeconomic development, strategic communications & grassroots, and governmentrelations services. McGuireWoods Consulting is a subsidiary of theMcGuireWoods LLPlaw firm and has been named in The National Law Journal’s special annualreport, “The Influence 50,” for the past several years. In the most recentreport, McGuireWoods Consulting was ranked 15th of the 1,900 governmentrelations firms in Washington, D.C.

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