Washington Healthcare Update

October 24, 2022

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This Week in Washington: Countdown to Election Day- Focus on polls, campaigns and who will be in control of the House and Senate




Proposed Rules

Final Rules




The House is in recess until Nov. 14


The Senate is in recess until Nov. 14

Senators Write USTR to Urge Protection of American Innovation in Therapeutics and Diagnostics

U.S. Senators Tom Carper (D-Del.) and Pat Toomey (R-Pa.) led a bipartisan group of senators in writing U.S. Trade Representative Katherine Tai to urge the Biden Administration to safeguard American innovation in the World Trade Organization’s (WTO) negotiations on whether to expand its waiver of IP rights enforcement for COVID-19 vaccines to also include therapeutics and diagnostics. Senators Bill Cassidy (R-La.), Chris Coons (D-Del.), John Barrasso (R-Wyo.), Kyrsten Sinema (D-Ariz.), Thom Tillis (R-N.C.), Robert Menendez (D-N.J.), Richard Burr (R-N.C.), and Jon Tester (D-Mont.) also signed onto the letter.

In June 2022, WTO members agreed to waive obligations under the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement for COVID-19 vaccine patent subject matter for a five-year period. This requires the United States to not enforce certain IP rights on behalf of U.S.-based companies at the WTO. The expansion under consideration would enable eligible WTO member countries to ignore otherwise enforceable intellectual property (IP) protections for therapeutics and diagnostics that treat COVID-19.

GOP Senators Ask FDA to Increase Focus Non-Opioid Pain Medication

On Oct. 19, Sens. James Lankford (R-OK), Roger Marshall (R-KS), Shelley Moore Capito (R-WV) and Marsha Blackburn (R-TN) wrote the Food and Drug Administration Commissioner Robert Califf asking that the FDA increase focus on development of non-opioid pain medication. They note that no non-opioid alternative for pain management was approved in 2021. In 2018, the SUPPORT for Patients and Communities Act required FDA issue guidance addressing challenges in non-addictive pain therapies and to assist drug developers in creating non-opioid alternatives for acute and chronic pain management. The FDA did publish draft guidance in February, but the senators state the FDA has not met the requirements of the legislation fully. The senators asked that they be responded to by Nov. 9. 

CBO Looks At Doctors’ Reimbursement and Access

The Congressional Budget Office (CBO) included “analyzing how the amount physicians are paid for services affects access to care for dual-eligible beneficiaries (people dually enrolled in Medicare and Medicaid) compared with Medicare-only beneficiaries” on a recently released list of its ongoing projects.

This comes as MedPAC, the congressional advisory panel on Medicare reimbursement, is also looking at how to raise reimbursement for safety net doctors. At its most recent meeting, MedPAC discussed four ways to target funds for providers caring for patients with low-income subsidies. 


National Security Memorandum Focuses on Biological Threats and Pandemic Preparedness

On Oc. 18, President Biden signed a national security memorandum focused on biological threats and pandemic preparedness.

The National Security Memorandum-15 (NSM-15) outlines the policy and describes actions needed by U.S. government agencies to manage the “risk of biological incidents.”

The National Biodefense Strategy and Implementation Plan for Countering Biological Threats, Enhancing Pandemic Preparedness, and Achieving Global Health Security outlines five preparedness goals, including risk awareness and detection, ensuring biodefense enterprise capabilities and preparedness, rapid response and recovery.

The strategy calls for the capacity to: 

  • develop a test to detect a pathogen within 12 hours;
  • produce novel therapeutics within six months; and
  • produce enough vaccines to protect the nation within 130 days.

The Administration says it is already implementing the strategy with existing funding but needs more resources and expects that funding for this will come from the President’s request for pandemic preparedness and biodefense of $88 billion over five years. However, Republicans have not shown interest in funding this request.

For more information: https://www.whitehouse.gov/briefing-room/presidential-actions/2022/10/18/national-security-memorandum-on-countering-biological-threats-enhancing-pandemic-preparedness-and-achieving-global-health-security/?mkt_tok=NDkwLUVIWi05OTkAAAGHlLGoPwDxgyHCkjw_ZXtQim9w0mtSu_5twVQs46bnkPBcPv5XbO4qyMdwAYVWNfCIWvG-31b-QS3qAnPQMJdxcVN6L27_NZreL6dGq-zyfevq4g 


OMB Begins Review of Proposal on Prior Authorization

On Oct. 13, the Office of Management and Budget (OMB) began reviewing a rule that would

streamline prior authorization for Medicare Advantage, Medicaid and CHIP managed care plans, and exchange plans. Prior authorization reform has been a long-standing issue that recently heated up after a controversial HHS Office of the Inspector General report found in appropriate denials.

A summary of the proposed CMS rule being reviewed is now reviewing says the rule would put new requirements on MA plans, Medicaid fee-for-service programs, Medicaid plans and exchange plans to improve the electronic exchange of health care data and streamline processes related to prior authorization. It would also add measures to the Merit-based Incentive Payment Systems in the interoperability category and for hospitals in their interoperability program.

HHS Office of Civil Rights Looking At Chain Pharmacies Restricting Drug Access

The Office of Civil Rights of the U.S. Department of Health and Human Services (HHS) is investigating pharmacies that have begun limiting the prescriptions for medications that are used to treat conditions such as cancer, lupus and arthritis — as well as manage miscarriages — that can also be used to induce an abortion in states with strict abortion bans. Since the Dobbs decision concerning abortion, HHS has received complaints about chain pharmacies not complying with federal obligations to fill prescriptions. 

In July HHS, issued reproductive health nondiscrimination guidance after similar reports. However, in September, Republican members of Congress introduced a bill that would let pharmacists refuse to fill prescription for medications they believe could be used to end a pregnancy. No action has been taken on that proposal.

FDA Advisory Panel Supports Pulling Makena From Market

On Oct. 19, a panel of FDA advisers backed the agency’s proposal to pull Covis Pharma’s preterm birth drug Makena from the market. Makena has been marketed for more than 10 years under the accelerated approval pathway. During that time, the drug has failed to demonstrate it works to improve neonatal outcomes from premature birth, according to FDA

The FDA wants to withdraw the drug from the market, asserting that failing to do so would be a disservice to patients and undermine the accelerated approval pathway. Covis argued that removing Makena — the only drug approved by FDA to reduce risk of preterm birth in women and improve neonatal outcomes — would lead doctors to use alternative treatments to prevent preterm birth.

This debate highlights how long it can take to remove a drug even when officials think it does not work and puts the accelerated pathway under more scrutiny. 

FDA Delays MOU Compounding Enforcement

On Oct. 21, the Food and Drug DA published a Federal Register Notice that it is delaying indefinitely enforcement of its 5% sales cap on human drug compounders who distribute their products out of state and is suspending its final memorandum of understanding that sought to give state pharmacy boards a key monitoring role over pharmacy compounding. The 5% sales cap was to be enforced beginning Oct. 27. The FDA now says it will publish a final rule concerning distribution requirements for compounded human drug products and will publish an updated MOU. Enforcement of the sales cap will be after the final rule. However, no timeline has been provided.

The final memorandum, published May 2020, requires states to notify FDA when pharmacies within their states ship more than 50% of their compounds out of state. Compounders in states that do not sign the MOU will be subject to a 5% cap on out-of-state sales, which some pharmacists have said could deprive patients of needed prescribed medications.

In October 2020, seven compounding pharmacies filed a lawsuit against the FDA, claiming the FDA had overstepped authority and failing to gather input from state boards of pharmacy before issuing the MOU. In September 2021, the court remanded the MOU to FDA to either certify that it will not have a significant economic effect on small businesses or prepare a regulatory flexibility analysis.

For more information:


Proposed Rules

FDA Releases Proposed Rule to Standardize the National Drug Code Format

On July 25, the Food and Drug Administration (FDA) issued a proposed rule titled “Revising the National Drug Code Format and Drug Label Barcode Requirements.” The proposed rule would amend the National Drug Code (NDC) to require one standardized format for all NDCs.

Public comments will be accepted until Nov. 22, 2022.

Final Rules

Homeland Security Issues Final Rule Reversing Trump “Public Charge” Rule

On Sept. 8 the administration issued final rules making it clear that the Department of Homeland Security will not refuse entry to non-citizens seeking admission to the U.S. or a green card due to their likelihood to receive Medicaid/CHIP or other health benefits except for long-term institutionalized care. The rule reverses the Trump administration’s public charge rules issued in 2019. 



Maternal Health: Availability of Hospital-Based Obstetric Care in Rural Areas

GAO-23-105515 Published: Oct 19, 2022. Publicly Released: Oct 19, 2022.

House Report 116-450 directed the Government Accounting Office (GAO) to report on ways to improve access to obstetrics care in rural areas. This report is focused on the hospitals and clinicians that provide delivery services and describes (1) the availability of hospital-based obstetric services in rural areas, (2) stakeholder perspectives on factors that affect such availability, and (3) stakeholder perspectives on efforts federal agencies, states, and others could take to increase such availability.

Stakeholders GAO interviewed most often ranked two factors as most important among a list of seven factors potentially affecting the availability of obstetric care in rural areas. Specifically, stakeholders said:

  • Medicaid reimbursement rates set by states do not cover the full cost of providing obstetric services. This may mean particular financial losses for hospitals providing these services in rural areas, where a higher proportion of births are covered by Medicaid. Medicaid covered 50 percent of rural births in 2018, compared to 43 percent of births for the United States as a whole, according to the most recent analysis from the Medicaid and CHIP Payment and Access Commission.
  • Recruiting and retaining providers is particularly challenging for rural areas, as they must compete with urban areas for a limited pool of providers to staff obstetric units that require a full range of maternal health providers, such as physicians and nurses, as well as anesthesiologists.

Stakeholders GAO interviewed most often cited the following efforts federal agencies, states, and others could take to increase the availability of obstetric care in rural areas. Specifically, stakeholders said:

  • Increasing Medicaid reimbursement would help to keep obstetric services open, as Medicaid covers a higher proportion of births in rural areas than urban areas.
  • Increasing remote consultations, such as through videoconferencing or phone calls, between clinicians could help ensure that rural patients who live longer distances from higher levels of obstetric care have access to such care through their own clinicians in their communities.
  • Establishing regional partnerships—such as a hub-and-spoke model where a larger hospital (hub) partners with smaller rural hospitals (spokes) for care coordination and to provide training and other resources—could help ensure rural patients receive risk-appropriate care in their communities. For example, a specialist from the hub hospital could help manage a rural patient’s high-risk condition as needed and support the rural clinician for planning delivery at the local hospital.

To read the full report: https://www.gao.gov/products/gao-23-105515

Public Health Preparedness: HHS Should Address Strategic National Stockpile Requirements and Inventory Risks

GAO-23-106210 Published: Oct 17, 2022. Publicly Released: Oct 17, 2022.

The Pandemic and All-Hazards Preparedness and Advancing Innovation Act of 2019 included a provision requiring the (Government Accounting Office) to review the National Stockpile. This report examines: (1) the process used to make inventory decisions; (2) non COVID-19 obligations for countermeasures and their alignment with recommendations; and (3) obligations for countermeasures using COVID-19 relief funds, and inventory and operations changes in response to the COVID-19 pandemic.

The GAO made three recommendations:

  • The Assistant Secretary for Preparedness and Response should update procedures for how SNS reviews will be conducted in accordance with statutory requirements, including a description of the roles and responsibilities of its interagency partners in the development of the SNS reviews.
  • The Assistant Secretary for Preparedness and Response should develop and document an approach—whether through the standard operating procedures for the SNS reviews or some other mechanism—for ensuring that MCMs under consideration for SNS procurement receive the same consideration regardless of whether they received development funding from BARDA, in accordance with statutory requirements.
  • The Assistant Secretary for Preparedness and Response should develop and document an approach for regularly managing the risks associated with the gaps between SNS MCM inventory levels and recommended quantities. Such an approach, which could occur as part of the SNS reviews, should clearly prioritize risks, track progress made in addressing the risks, and estimate resources needed to address risks. This approach should involve communicating this information to key decision makers, including Congress.

To read the report https://www.gao.gov/products/gao-23-106210