Washington Healthcare Update

February 25, 2019

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Coming Week’s Highlights: Congress returns from the Presidents’ Day recess.

Upcoming Hearings

Upcoming Events





Final Rules


Upcoming Hearings

Tuesday, Feb. 26, 2019
Senate Finance Committee: “Drug Pricing in America: A Prescription for Change, Part II”
The second hearing in a series on drug pricing in the Senate Finance Committee will include the testimonies of seven drug company executives. Leaders of pharmaceutical companies refused to testify at a previous hearing. The following seven companies will be represented at this hearing:

  • AbbVie Inc.
  • AstraZeneca
  • Bristol-Myers Squibb Co.
  • Johnson & Johnson
  • Merck & Co., Inc.
  • Pfizer
  • Sanofi

Find a link to witness testimonies, member statements and the hearing live feed here.

Wednesday, Feb. 27, 2019
House Committee on Energy and Commerce: “Confronting a Growing Public Health Threat: Measles Outbreaks in the U.S.”
The House Energy and Commerce Committee’s Oversight and Investigations Subcommittee will hold a hearing on the current measles outbreak and response efforts. Since Jan. 1, 2019, the Centers for Disease Control and Prevention reported 101 individual measles cases in 10 states. The majority of measles cases have occurred in Clark County, WA, a suburb of Portland, OR, with 53 confirmed measles cases. Of those cases, 47 involved people who were not vaccinated against the disease, and 38 people infected were children between the ages of one and 10. Find a link to witness testimonies, member statements and the hearing live feed here.

Tuesday, March 5, 2019
Senate Committee on Health, Education, Labor and Pensions (HELP): “Vaccines Save Lives: What is Driving Preventable Disease Outbreaks?”
The Senate Committee on Health, Education, Labor and Pensions (HELP) will hold a hearing on the outbreak of preventable disease and the debate on vaccinations. Find a link to witness testimonies, member statements and the hearing live feed here.

Upcoming Events

March 7-8, 2019: Medicare Payment Advisory Commission (MedPAC) Public Meeting
Find the meeting agenda and more details as they become available here.

March 7-8, 2019: Medicaid and CHIP Payment and Access Commission (MACPAC) Public Meeting



Grassley, Wyden Investigate Rising Insulin Prices

On Feb. 22, Senate Finance committee Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) launched a probe on the rising cost of insulin, requesting information from drug manufacturers Eli Lilly, Novo Nordisk and Sanofi on recent price increases of up to 500 percent. The letters were sent ahead of a Senate Finance committee hearing on Feb. 26, with seven drug company executives testifying on drug pricing. The senators asked the drug manufacturers how each determines the list and net prices of the medicines, where the medicines are placed on Part D formularies and how rebates to pharmacy benefit managers (PBMs) affect this placement.

The letter to Eli Lilly can be found here.

The letter to Novo Nordisk can be found here.

The letter to Sanofi can be found here.


Chamber of Commerce Launches Ad Campaign Against Administration’s Drug-Pricing Proposal

The Chamber of Commerce will run a seven-figure ad campaign against the administration’s proposal to tie Medicare prices for prescription drugs with prices in comparable nations. The Chamber is concerned the proposal would reduce seniors’ access to treatments and hurt innovation. Running through early to mid-March, the campaign is urging the administration through cable, digital and print ads to drop the proposal and for members of Congress to oppose it, arguing the proposal is imposing “foreign price controls.”


FDA: Competitive Generic Therapies Draft Guidance

On Feb. 19, the Food and Drug Administration (FDA) published a draft guidance on how drug manufacturers can apply for the competitive generic therapy (CGT) pathway, intended for generic versions of drugs that have little-to-no competition on the market. This guidance encourages more generic drug manufacturing and explains how exclusivity would work under the CGT pathway, including exclusivity given to multiple CGT pathway-approved drugs that fit certain criteria.

Comment period ends on April 22, 2019; comments can be submitted here.

Find the draft guidance here.

CMS: Coverage with Evidence Development for Chimeric Antigen Receptor (CAR) T-cell Therapy

On Feb. 15, the Centers for Medicare and Medicaid Services (CMS) proposed Medicare coverage of approved CAR T-cell therapies that use the patient’s immune system to fight cancer. The proposed rule requires Medicare to cover the therapy nationwide when it is offered in a CMS-approved registry or clinical study, in which patients are monitored for at least two years post-treatment. The evidence from these studies and registries allows CMS to identify the patients who benefit from CAR T-cell therapies.

Currently, there is no national Medicare policy for covering CAR T-cell therapy. Local Medicare administrative contractors have discretion over whether to pay for the treatment.

Comment period ends on March 17, 2019; comments can be submitted here.

Find the proposed rule here.

CMS Upcoming Rule: Revision of Requirements for Long-Term Care Facilities: Arbitration Agreements

A final rule from the Centers for Medicare and Medicaid Services (CMS) is expected to clarify that long-term care facilities can require residents or their families to agree, before disputes arise, to settle complaints through arbitration rather than litigation. The rule arrived at the Office of Management and Budget (OMB) for review on Jan. 30, and could end the fight over legal protections for senior citizens in the health care system.

The administration’s proposed rule includes new transparency measures for pre-dispute arbitration agreements, such as requirements for facilities to clearly explain the terms to prospective residents and that those residents acknowledge they understand.

The rule, found here, is still being reviewed at the OMB.

CMS Proposes Innovations in Technology to Promote Patient Access; Make Health Data Exchange a Reality

On Feb. 11, the Centers for Medicare and Medicaid Services (CMS) and the Office of the National Coordinator (ONC) released proposed rules to support secure access, exchange and use of electronic health information. The Interoperability and Patient Access Proposed Rule from CMS outlines opportunities to make patient data more useful and transferable through open, secure, standardized and machine-readable formats while reducing restrictions on health care providers. The ONC rule calls on the health care industry to adopt standardized application programming interfaces (APIs), which will allow individuals to securely and easily access structured electronic health information (EHI) using smartphone applications.

In addition to the policy proposals, CMS released two Requests for Information (RFIs) to obtain feedback on interoperability and health information technology (health IT) adoption in post-acute care (PAC) settings, and the role of patient matching in interoperability and improved patient care.

Comment period for the proposed rules and the RFIs closes in early April; exact date will be updated when the rules are posted to the Federal Register.

CMS Proposes Medicare Advantage and Part D Payment and Policy Updates to Maximize Competition and Coverage

On Jan. 30, the Centers for Medicare & Medicaid Services (CMS) released Part II of the 2020 Advance Notice of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part D Payment Policies (the Advance Notice), and the Draft Call Letter. CMS released Part I of the Advance Notice on Dec. 20. The proposed updates will continue to modernize and maximize competition among Medicare Advantage and Part D plans, as well as include actions to address the nation’s opioid crisis. The final 2020 Rate Announcement and final Call Letter will be published by April 1, 2019.

The proposed regulation topics include:

  • 2020 Part C Risk Adjustment Model Proposals;
  • 2020 Draft Call Letter;
  • Encouraging plans to take advantage of the new flexibilities to offer targeted benefits and cost-sharing reductions for patients with chronic pain or undergoing addiction treatment;
  • Encouraging Part D sponsors to provide lower cost sharing for opioid-reversal agents; and
  • Proposing steps to advance opioid-related measures through the Star Ratings development process.

Comment period for Part I and Part II ends on March 1, 2019.

Find the proposed regulation for Part II here.

ONC/CMS: Interoperability; Exceptions to Information Blocking

On Feb. 11, the Office of the National Coordinator for Health IT (ONC) released a proposed rule requiring patient electronic access to electronic health information (EHI) be made available at no cost. The rule provides guidance for a 21st Century Cures Act provision to prevent information blocking. The rule includes seven exceptions to what Congress defined as blocking the sharing of electronic information. ONC also asks for information on what pricing information could be included as part of electronic health information to help the public see what they are paying for health care. The proposed rule supplements the rule on interoperability released by the Centers for Medicare and Medicaid Services (CMS) on the same day.

Comment period closes in early April; exact date will be updated when the rules are posted to the Federal Register.

Read the proposed rule here.

HHS Proposal Calls for Reforming Drug-Rebate System

Published on Feb. 6, a proposal by the Department of Health and Human Services (HHS) called for a ban on drug rebates, unless shared directly with seniors at the pharmacy counter, significantly lowering out-of-pocket retail drug spending for the minority of seniors on expensive drugs. The proposal would raise premiums for all Medicare beneficiaries. Part of the administration’s plan is set to take effect in a year and an anticipated legal challenge by pharmacy benefit managers (PBMs) could delay implementation.

The proposal cuts rebates tied to a percentage of list price that drug manufacturers pay to Part D plans, Medicaid managed care and PBMs by taking away the long-standing exemption for rebates in anti-kickback law. The administration proposed two new safe harbor protections: one that would allow rebates that are shared with patients at the point of sale and another that would let PBMs charge flat fees for their services.

Comment period ends on April 8, 2019.

Read the proposed rule here.

Final Rules

HHS: Title X Notice of Final Rule

On Feb. 22, the Department of Health and Human Services (HHS) released a final rule to revise the regulations governing the Title X family planning program, which focuses on serving low-income Americans. The final rule ensures compliance with statutory program integrity provisions governing the program, specifically the statutory prohibition on funding programs where abortion is a method of family planning. The final rule amends the Title X regulation, which had not been majorly updated in nearly twenty years.

The five major provisions of the law:

  • Title X Services
    Grants under Section 1001 assist in the establishment and operation of voluntary family planning projects, which provide a broad range of acceptable and effective family planning methods and related preventive health services. The broad range of services does not include abortion as a method of family planning.
  • Title X Training
    Grants under Section 1003 provide training for personnel working in family planning services projects described under Section 1001 – this includes National Training Centers.
  • Title X Research
    Grants and contracts under Section 1004 provide for projects for research in the biomedical, contraceptive development, behavioral, and program implementation fields related to family planning and population.
  • Title X Information and Education
    Grants and contracts under Section 1005 provide for the development and dissemination of informational and educational materials including the Office of Population Affairs (OPA) website and the Title X family planning clinic locator database.
  • The Prohibition of Abortion
    None of the funds appropriated under this title shall be used in programs where abortion is a method of family planning.

The final rule has been submitted to the Federal Register (OFR) for publication and has not yet posted.

Find the final rule here.

FDA: Expedited Programs for Regenerative Medicine Therapies for Serious Conditions Final Guidance

On Feb. 19, the Food and Drug Administration (FDA) published a final guidance changing the FDA’s interpretation of the statutory definition of regenerative medicine advanced therapy (RMAT), expanding what qualifies the FDA’s RMAT designation to include allogenic and autologous cell therapies, xenogenic cell products and some gene therapies. The guidance also outlines how sponsors can use clinical evidence toward supporting an RMAT designation.

Find the final guidance here.

FDA: Evaluation of Devices Used with Regenerative Medicine Advanced Therapies Final Guidance

On Feb. 19, the Food and Drug Administration (FDA) published a final guidance on how the FDA plans to evaluate medical devices used with cell and gene therapies. Not substantially different than the draft version released in 2017, the final guidance includes the FDA’s intention to streamline its application of regulatory requirements, as well as explanations to class designations of regenerative therapy products or why certain devices are labeled specific regenerative medicine advanced therapy (RMAT) or a class of RMATs, or limited to a specific cell type or multiple cell types.

Find the final guidance here.

FDA: Final Rule Adds Six Substances to 503A Bulks List

On Feb. 15, the Food and Drug Administration (FDA) finalized, for the first time, the placement of six bulk drug substances on the list of bulk substances that can be used by compounders not registered as outsourcing facilities. The final rule establishes a set of criteria used to evaluate substances nominated to the list, known as the 503A bulks list.

Read the final rule here.


GAO: Defense Health Care; Actions Needed to Determine the Required Size and Readiness of Operational Medical and Dental Forces

On Feb. 21, the Government Accountability Office (GAO) published a report responding to concerns from the Senate Armed Services Committee and the Department of Defense (DOD) that the military health system has prioritized peacetime care to the detriment of combat casualty care capability and wartime medical skills. The GAO reviewed DOD reports and personnel requirements data for fiscal year 2017 and future years, and interviewed senior DOD leaders as well as officials at six military treatment facilities to represent each military department and provide a mix of patient volumes.

The report included the following recommendations. The DOD should:

  • Establish joint planning assumptions and a definition;
  • Identify a method for assessing medical and dental personnel requirements;
  • Identify and mitigate limitations in a clinical readiness metric for medical providers; and
  • Determine specialties and estimate costs and benefits for applying a readiness metric.

The DOD concurred with all recommendations and provided implementation steps.

Read the full report here.

CMS: Annual U.S. Health Care Spending to Hit $5.96 Trillion by 2027

On Feb. 20, the Centers for Medicare and Medicaid Services’ (CMS) Office of the Actuary estimated health care spending is set to rise an average of 5.5 percent annually over the next decade and will reach 19.4 percent of gross domestic product in 2027. The report includes an estimate of $5.96 trillion spent on health care annually by 2027. Driving spending growth are health care goods and services, including prescription drugs, and increased Medicare enrollment as baby boomers age into the program. Medicaid expansions in five states is also projected to contribute to the spending growth, and the repeal of the Affordable Care Act’s (ACA) individual mandate is expected to slightly decrease private health insurance enrollment.

Read the full report here.

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

Stephanie Kennan, Senior Vice President
Mariam Eatedali, 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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