A&B Healthcare Week in Review, June 20, 2014

 I. REGULATIONS, NOTICES, & GUIDANCE

• On June 16, 2014, the Food and Drug Administration (FDA) announced the availability of a guidance document entitled “Q4B Evaluation and Recommendation of Pharmacopoeial Texts for Use in the International Conference on Harmonisation Regions; Annex 6: Uniformity of Dosage Units General Chapter”. The guidance was prepared under the auspices of the International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH). The guidance provides the results of the ICH Q4B evaluation of the Uniformity of Dosage Units General Chapter harmonized text from each of the three pharmacopoeias (United States, European, and Japanese) represented by the Pharmacopoeial Discussion Group (PDG). The guidance conveys recognition of the three pharmacopoeial methods by the three ICH regulatory regions and provides specific information regarding the recognition. The guidance is intended to recognize the interchangeability between the local regional pharmacopoeias, thus avoiding redundant testing in favor of a common testing strategy in each regulatory region. The guidance is in the form of an annex to the core guidance on the Q4B process entitled “Q4B Evaluation and Recommendation of Pharmacopoeial Texts for Use in the ICH Regions”. More information may be found here.
• On June 17, 2014, the Agency for Healthcare Research and Quality (AHRQ) issued a request for scientific information submissions from the public. Scientific information is being solicited to inform the Agency’s review of Diagnosis and Treatment of Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS), which is currently being conducted by the Evidence-based Practice Centers for the AHRQ Effective Health Care Program. Access to published and unpublished pertinent scientific information will improve the quality of this review. AHRQ is conducting this systematic review pursuant to Section 1013 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003. Submissions are due July 17, 2014.
• On June 17, 2014, the Centers for Medicare and Medicaid Services (CMS) announced that the agency is proposing to establish a new system of records (SOR) entitled “CMS Encounter Data System (EDS)”. CMS intends to collect encounter data, or data on each item or service delivered to enrollees of Medicare Advantage (MA) plans offered by MA organizations as defined at Title 42, Code of Federal Regulation (CFR), § 422.4. Pursuant to 42 CFR 422.310, each MA organization must submit encounter data to CMS that is used to determine the risk adjustment factors for payment, updating the risk adjustment model, calculating Medicare Disproportionate Share Hospital (DSH) percentages, Medicare coverage purposes, and quality review and improvement activities. Encounter data will be collected and maintained in the EDS.
• On June 17, 2014, the Department of Health and Human Services (HHS) announced that an information collection activity entitled “The Blue Button Connector” had been submitted to OMB for review and approval. The Office of the National Coordinator for Health Information Technology is requesting an approval on the Blue Button Connector, a Web site that helps consumers and patients find their own health information online from the entities that collect their information (i.e. hospitals, physicians, labs, immunization registries, state health information exchanges etc.). The Connector also helps developers build tools that respond to the readiness of the market. It also will provide links to apps and tools for consumers that use structured electronic health data. Comments are due July 17, 2014.
• On June 18, 2014, the Office of Management and Budget (OMB) received a proposed rule from CMS that would set 2015 Medicare payment rates for physicians and other Part B providers.
• On June 18, 2014, FDA announced the availability of draft guidance for industry entitled “Internet/Social Media Platforms with Character Space Limitations: Presenting Risk and Benefit Information for Prescription Drugs and Medical Devices”. This draft guidance responds to, among other things, stakeholder requests for specific guidance and describes FDA's current thinking on how manufacturers, packers, and distributors of prescription human and animal drugs and medical devices for human use, including biological products, that choose to present benefit information should present both benefit and risk information within advertising and promotional labeling of their FDA-regulated medical products on electronic/digital platforms that are associated with character space limitations, specifically on the Internet and through social media or other technological venues. The draft guidance represents FDA's current thinking on specific aspects of FDA's evolving consideration of social media platforms and other Internet-related matters. FDA continues actively to review, analyze, and develop approaches to a variety of topics related to the labeling and advertising of medical products, including the development of this and other guidance addressing the use of social media platforms and the Internet. Comments must be received by September 16, 2014, in order to be considered for inclusion in final guidance. More information may be found here.
• On June 18, 2014, FDA announced that an information collection entitled “Adverse Event Program for Medical Devices (Medical Product Safety Network (MedSun))” had been approved by OMB.
• On June 18, 2014, FDA announced that an information collection entitled “Tobacco Products, Exemptions From Substantial Equivalence Requirements” had been submitted to OMB for review and clearance. FDA has established a pathway for manufacturers to request exemptions from the substantial equivalence requirements of the Federal Food, Drug, and Cosmetic Act. FDA may exempt tobacco products that are modified by adding or deleting a tobacco additive, or increasing or decreasing the quantity of an existing tobacco additive, from the requirement of demonstrating substantial equivalence if the Agency determines that: 1) the modification would be a minor modification of a tobacco product; 2) a report demonstrating substantial equivalence is not necessary for the protection of public health; and 3) an exemption is otherwise appropriate. FDA estimates that 500 requests for exemption will be submitted annually, and that it will take approximately 12 hours to prepare an exemption request. Comments are due July 18, 2014.
• On June 18, 2014, HHS announced that it submitted an information collection request entitled “Education and Training of Healthcare Providers as a Coordinated Public Health Response to Violence Against Women Project” to OMB for review and approval. The Office on Women's Health (OWH) is seeking a new clearance to conduct a one year data collection associated with the pilot and evaluation of an eLearning course developed as part of the “Education and Training of Healthcare Providers as a Coordinated Public Health Response to Violence Against Women Project”. The purpose of this data collection is to gather data from healthcare providers who have volunteered to participate in the pilot and evaluation of an e-learning course designed to educate and train healthcare providers on how to respond to intimate partner violence (IPV) against women. Comments are due July 18, 2014.
• On June 19, 2014, FDA issued draft guidance for industry entitled “Uncomplicated Gonorrhea: Developing Drugs for Treatment.” The purpose of this draft guidance is to assist sponsors in the development of new antibacterial drugs for the treatment of uncomplicated gonorrhea. Comments must be received by September 17, 2014, in order to be considered for inclusion in final guidance. More information may be found here.
• On June 19, 2014, the National Toxicology Program (NTP) Interagency Center for the Evaluation of Alternative Toxicological Methods (NICEATM) issued a request for available data and information on devices and/or technologies currently used for identifying potential inhalation hazards. Submitted information will be used to assess the state of the science and determine the technical needs for a dynamic nonanimal system to assess the potential toxicity of inhaled chemicals and nanomaterials. Responses are due July 18, 2014.
• On June 20, 2014, CMS issued an information collection request entitled “Improving Quality of Care in Medicaid and CHIP through Increased Access to Preventive Services State Survey”. The survey will be used to gain a better understanding of state efforts to increase the utilization of preventive services and to develop resources (including educational and outreach resources) to help states increase the utilization of these services. The results will provide a baseline regarding the coverage of preventive services and will help CMS identify ways to assist states with materials focusing on prevention and technical assistance. Comments are due July 21, 2014.
• On June 20, 2014, CMS released several information collection requests. They are: 1) Identification of Extension Units of Medicare Approved Outpatient Physical Therapy/Outpatient Speech Pathology (OPT/OSP) Providers and Supporting Regulations; 2) Withholding Medicare Payments to Recover Medicaid Overpayments and Supporting Regulations in 42 CFR 447.31; and 3) Limitations on Provider Related Donations and Health Care Related Taxes; Limitation on Payment to Disproportionate Share Hospitals. Comments are due August 4, 2014. More information may be found here.
• On June 20, 2014, FDA announced the availability of draft guidance for industry entitled “Determining the Need for and Content of Environmental Assessments for Gene Therapies, Vectored Vaccines, and Related Recombinant Viral or Microbial Products”. The draft guidance document provides investigational new drug application (IND) sponsors and applicants for a biologics license application (BLA), or a supplement to a BLA, with recommendations on considerations when assessing whether to submit an Environmental Assessment (EA) for gene therapies, vectored vaccines, and related recombinant viral or microbial products (GTVVs). The guidance also contains recommendations as to what information should be included in an EA and what sponsors and applicants can expect once an EA is filed. Comments must be received by September 18, 2014, in order to be considered for inclusion in final guidance. More information may be found here.
• On June 20, 2014, HHS, the Department of the Treasury, and the Department of Labor filed a final rule entitled “Ninety-Day Waiting Period Limitation” at the Office of the Federal Register. These final regulations clarify the maximum allowed length of any reasonable and bona fide employment-based orientation period, consistent with the 90-day waiting period limitation set forth in section 2708 of the Public Health Service Act. These final regulations apply to group health plans and group health insurance issuers for plan years beginning on or after January 1, 2015. The rule will be published in the Federal Register on June 25th.

Event Notices:

• September 10, 2014: On June 16, 2014, FDA in collaboration with the National Cancer Institute (NCI) announced a public meeting entitled “Methodological Considerations in Evaluation of Cancer as an Adverse Outcome Associated With Use of Non-Oncological Drugs and Biological Products in the Postapproval Setting,” which will take place on September 10, 2014 from 8:00 AM to 5:00 PM in Washington DC. The purpose of the public meeting is to engage in constructive dialogue and information sharing among regulators, researchers, the pharmaceutical industry, public health agencies, health care providers, and the general public concerning challenges in designing and implementing postapproval studies to evaluate the risk of cancer associated with use of non-oncological drugs and biological products. The input from this meeting and public docket will be used to inform the Agency on best study design and methodological options to consider when evaluating cancer risk in the postapproval setting. This meeting includes a public comment session.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On June 18, 2014 Senators Lamar Alexander (R-TN), Tom Coburn, M.D. (R-OK), and Richard Burr (R-NC) sent a letter to FDA Commissioner Margaret Hamburg asking for comprehensive data on the risks and benefits associated with the Expanded Access, or “compassionate use”, program. Expanded Access allows patients to access non-FDA approved therapies which are outside of clinical trials to treat serious or immediately life threatening conditions. The letter states: “The work of our nation’s biomedical research infrastructure and potential for medical innovation on behalf of patients is astounding. Yet, each day patients nationwide are burdened by diseases and conditions that no FDA-approved products can cure or treat. Those patients are understandably desperate for any treatment that might improve their ailments, quality of life, or survival. For some, there is hope in drugs or devices that have not yet completed the FDA review and approval process, but their hopes are often frustrated since clinical trials alone often take years to complete under current design requirements.”
• This week the minority staff on the Senate Finance and Senate Judiciary Committees released a report entitled “Red Flags: How Politics and Poor Management Led to the Meltdown of HealthCare.gov”. The report details the findings of a joint inquiry by the Committees into the troubled launch of HealthCare.gov last fall. The investigation finds that CMS commissioned independent verification and validation tests of the site prior to launch, but did not “place much, if any, priority” on contractor assessments that suggested the site was not ready to go live on the first day of open enrollment. The document alleges, “Officials ignored countless red flags to launch a website with thousands of defects. The breakdown [of HealthCare.gov] was not a surprise to dozens of high level officials within CMS and HHS, nor to hundreds of individuals working for the contractors who had developed the code for the website. These individuals were aware for months of gaping holes in testing, critical security concerns, and failures under the most modest simulations.” A press release on the report may be found here.

House of Representatives

• On June 18, 2014, the House Ways and Means Subcommittee on Health held a hearing on the Medicare Payment Advisory Commission (MedPAC) June 2014 Report to Congress, “Medicare and the Health Care Delivery System”. As part of its mandate from Congress, each June MedPAC reports on issues affecting the Medicare program as well as broader changes in health care delivery and the market for health care services. The report outlines a set of questions for the Medicare program as it develops new ways of financing and organizing care for beneficiaries. The sole witness for the hearing was MedPAC Executive Director Mark Miller. More information on the hearing may be found here.
• On June 18, 2014, the House Oversight and Government Reform Subcommittee on Economic Growth, Job Creation and Regulatory Affairs hosted a hearing entitled “Poised to Profit: How ObamaCare Helps Insurance Companies Even If It Fails Patients”. Witnesses for the hearing included Jeff Sessions, United States Senator, Alabama; Mandy Cohen, M.D., Acting Deputy Administrator and Director, Center for Consumer Information and Insurance Oversight (CCIIO), Centers for Medicare & Medicaid Services (CMS); Mr. Seth J. Chandler, Foundation Professor of Law, University of Houston Law Center; Mr. John R. Graham, Senior Fellow, National Center for Policy Analysis; Mr. Edmund F. Haislmaier, Senior Research Fellow, Center for Health Policy Studies, The Heritage Foundation; and Ms. Cori E. Uccello, Senior Health Fellow, American Academy of Actuaries. During the hearing Dr. Cohen asserted that HHS has the authority to administer the Affordable Care Act (ACA) risk corridor program without an appropriation, using its authority to collect user fees from insurers. Relatedly, on June 19th, HHS Secretary Sylvia Mathews Burwell sent a legal analysis to House Energy and Commerce Committee and Senate Budget Committee leadership explaining the Department’s authority to make payments under the risk corridor program. More information on the hearing may be found here.
• On June 19, 2014, the House Energy and Commerce Subcommittee on Health conducted a markup of pending health legislation, including: Designer Anabolic Steroid Control Act (H.R. 4771); Sunscreen Innovation Act (H.R. 4250); Vector-Borne Disease Research Accountability and Transparency Act of 2014 (H.R. 4701); Paul D. Wellstone Muscular Dystrophy Community Assistance, Research and Education Amendments of 2014 (H.R. 594); Sudden Unexpected Death and Data Enhancement and Awareness Act (H.R. 669); and Wakefield Act of 2014 (H.R. 4290). The bills were agreed to by voice vote. More information on the markup may be found here.
• This week the House Energy and Commerce Committee announced that it will host its second “21st Century Cures” roundtable on Tuesday June 24th, to discuss digital health care, and specifically the regulatory policies that govern advances in this space. Concurrently the Committee released a white paper on the subject, entitled “Leveraging Technology to Advance the Discovery, Development, and Delivery of Better Treatments and Cures”.

III. REPORTS, STUDIES, & ANALYSES

• On June 18, 2014, the HHS Assistant Secretary for Planning and Evaluation (ASPE) released a research brief entitled “Premium Affordability, Competition, and Choice in the Health Insurance Marketplace, 2014”. Researchers analyzed data on changes in premium costs associated with the ACA tax credits made through the Federally Facilitated Exchanges (FFEs) during the initial open enrollment periods. They found that individuals who selected plans in the FFE with tax credits have a post-tax credit premium that is 76% less than the full premium, on average, as a result of the tax credit—reducing their premium from $346 to $82 per month. The report also indicates that 69% of individuals selecting plans with tax credits in the FFE have premiums of $100 or less after tax credits, and nearly half (46%) have premiums of $50 or less after tax credits.
• On June 19, 2014, the Kaiser Family Foundation released a report entitled “Survey of Non-Group Health Insurance Enrollees”. The report is the first in a series of surveys taking a closer look at the entire non-group market, including individuals with coverage obtained both inside and outside the Exchanges, and those who were uninsured prior to the ACA as well as those who had a previous source of coverage. The survey finds that roughly two-thirds of those with non-group coverage are now in ACA-compliant plans, while three in ten have coverage they purchased before the ACA rules went into effect. The survey finds that about half of all non-group enrollees now have coverage purchased from a Health Insurance Exchange, and nearly six in ten (57%) of those with Exchange coverage were uninsured prior to purchasing their current plan. Most of this previously uninsured group reports having gone without coverage for two years or more, and for many the ACA was a motivator in seeking coverage; seven in ten of those who were uninsured prior to purchasing a Marketplace plan say they decided to buy insurance because of the law, while just over a quarter say they would have gotten it anyway.
• On June 17, 2014, CBO released a cost estimate for HR 3230, which would substantially expand the current authority of the Department of Veterans Affairs (VA) to provide medical services to veterans through agreements with non-VA health care providers. All told, CBO expects that if the bill was fully implemented, some veterans would ultimately seek additional care that would cost the federal government about $54 billion a year, after accounting for savings to other federal programs.
• The Robert Wood Johnson Foundation released a report entitled “The ACA and America’s Cities: Fewer Uninsured and More Federal Dollars”. In the report, researchers estimated the effect of the ACA on numbers of uninsured in 14 large cities: Los Angeles, Chicago, Houston, Philadelphia, Phoenix, Indianapolis, Columbus, Charlotte, Detroit, Memphis, Seattle, Denver, Atlanta, and Miami. The study finds that in the seven cities that expanded Medicaid, the ACA will likely decrease the number of uninsured by an average of 57%. In cities not expanding Medicaid, they found that the ACA will likely decrease the number of uninsured by an average of 30%. If Medicaid eligibility were expanded in these cities, the number of uninsured would fall by an average of 52%.
• On June 18, 2014, the Government Accountability Office (GAO) issued a report entitled “Medicaid Program Integrity: Increased Oversight Needed to Ensure Integrity of Growing Managed Care Expenditures”. The report examines state and federal roles and responsibilities to identify potential 1) gaps in efforts to ensure Medicaid program integrity coverage; and 2) fragmentation, overlap, or duplication of program integrity efforts, and efforts to coordinate activities. The report finds that although payments made under Medicaid managed care are growing at a faster rate than payments under fee-for-service (FFS), five state program integrity (PI) units and four Medicaid Fraud Control Units (MFCU) from the seven states included in GAO’s review said they primarily focus their efforts on Medicaid FFS claims and have not begun to closely examine program integrity in Medicaid managed care. In addition, GAO found that federal entities have taken few steps to address Medicaid managed care program integrity. GAO recommends that CMS increase its oversight of program integrity efforts by requiring states to audit payments to and by MCOs; updating its guidance on Medicaid managed care program integrity; and providing states additional support for managed care oversight, such as audit assistance from existing contractors.
• On June 18, 2014, Avalere Health released an analysis which finds that average proposed premiums for individual market exchange plans will increase modestly in 2015, based on initial rate filings in nine states. Across the nine-state group, average monthly silver premiums will rise by 8% from $324 in 2014 to $350 in 2015. In particular, average monthly silver premiums will rise in eight of the states, ranging from a 2.5% increase ($8) in Rhode Island to a 16% average increase ($54) in Indiana. Oregon was the only state examined in which average premiums will decrease for 2015—falling 1.4% or $3 per month. In addition, Avalere found that premium variation within states is poised to increase in 2015 compared to 2014.

IV. OTHER HEALTH POLICY NEWS

• On June 18, 2014, the Health Resources and Services Administration (HRSA) issued a statement in response to a May 23rd ruling by the US District Court for the District of Columbia (Pharmaceutical Research and Manufacturers of America v. US Department of Health and Human Services) which determined that HRSA does not have the authority to promulgate regulations expanding access to 340B discounts for “orphan” drugs. The 340B Drug Pricing Program requires drug manufacturers to provide outpatient drugs to eligible healthcare organizations, such as charity hospitals and Ryan White clinics, at significantly reduced prices. The ACA expanded the program by adding several new categories of covered entities, but excluded orphan drugs (which treat rare diseases or conditions) from 340B pricing. In July 2013, HRSA published a final rule clarifying that covered entities may obtain orphan drugs at 340B prices when they are used for non-orphan indications. HRSA’s response this week asserts: “…the Court did not invalidate HRSA’s interpretation of the statute. HHS/HRSA continues to stand by the interpretation described in its published final rule, which allows the 340B covered entities affected by the orphan drug exclusion to purchase orphan drugs at 340B prices when orphan drugs are used for any indication other than treating the rare disease or condition for which the drug received an orphan designation.”
• On June 16, 2014, CMS launched a national initiative entitled “From Coverage to Care”, which is intended to help people with new coverage understand their benefits and connect to primary care and preventive services. The program also seeks to give health care providers tools to promote patient engagement. CMS released an accompanying document entitled “A Roadmap to Better Care and a Healthier You”, which lists steps to help consumers and providers be informed about benefits and how to access primary care and preventive services.

This advisory is published by Alston & Bird LLP’s Health Care practice area to provide a summary of significant developments to our clients and friends. It is intended to be informational and does not constitute legal advice regarding any specific situation. This material may also be considered attorney advertising under court rules of certain jurisdictions.