A&B Healthcare Week in Review, July 25, 2014

I. REGULATIONS, NOTICES, & GUIDANCE

• On July 23, 2014, the Health Resources and Services Administration (HRSA) announced the availability of an interpretive rule providing the Department of Health and Human Services’ (HHS) interpretation of section 340B(e) of the Public Health Service Act (PHSA), entitled “Implementation of the Exclusion of Orphan Drugs for Certain Covered Entities Under the 340B Program.” The interpretive rule states that section 340B(e) of the PHSA excludes drugs with an orphan designation only when those drugs are transferred, prescribed, sold, or otherwise used for the rare condition or disease for which the drug was designated under section 526 of the Federal Food, Drug, and Cosmetic Act (FD&C Act). The interpretive rule is effective immediately. More information may be found here.
• On July 21, 2014, the Food and Drug Administration (FDA) announced that a proposed information collection entitled “Experimental Study of Direct-to-Consumer Promotion Directed at Adolescents” had been submitted to the Office of Management and Budget (OMB) for review and clearance. FDA plans to conduct a randomized, controlled study in two different medical conditions that assesses adolescents' perceptions following exposure to different types of direct-to-consumer (DTC) prescription drug advertising. Comments on the proposed study are due August 20, 2014.
• On July 21, 2014, HHS announced the “VizRisk Prize Competition Challenge”. VizRisk is the first-ever behavioral health data visualization challenge hosted by HHS. Its goal is to foster increased utilization, innovation, and critical analyses of publically available but underutilized government health data to better inform personal and health policy decisions. This 3 month challenge, July 28th to October, 28th 2014 will call on designers, coders, data scientists, public health experts, and others from around the country to analyze, organize, and visualize behavioral health risk data. HHS will be asking participants to use the Centers for Disease Control and Prevention’s (CDC’s) Behavioral Risk Factor Surveillance System data in combination with other publicly available government data sets to reveal key insights, trends, and relationships. Submissions are due October 28, 2014.
• On July 21, 2014, the Agency for Healthcare Research and Quality (AHRQ) issued a request for scientific information submissions entitled “Behavioral Programs for Diabetes Mellitus”. This notice informs the public that the Effective Health Care (EHC) Program would find the following information on Behavioral Programs for Diabetes Mellitus helpful: 1) A list of completed studies that your organization has sponsored for this indication; 2) For completed studies that do not have results on ClinicalTrials.gov, please provide a summary, including the following elements: study number, study period, design, methodology, indication and diagnosis, proper use instructions, inclusion and exclusion criteria, primary and secondary outcomes, baseline characteristics, number of patients screened / eligible/ enrolled/ lost to follow-up / withdrawn / analyzed, effectiveness / efficacy, and safety results; 3) A list of ongoing studies that your organization has sponsored for this indication; and 4) Description of whether the above studies constitute ALL Phase II and above clinical trials sponsored by your organization for this indication and an index outlining the relevant information in each submitted file. Submissions are due August 20, 2014.
• On July 21, 2014, FDA announced an opportunity for the public to comment on an information collection entitled “Regulations for In Vivo Radiopharmaceuticals Used for Diagnosis and Monitoring”. This notice solicits comments on the information collection in the regulations for in vivo radiopharmaceuticals used for diagnosis and monitoring. Comments are due September 19, 2014.
• On July 22, 2014, the Centers for Medicare and Medicaid Services (CMS) announced that an information collection entitled “Business Proposal Forms for Quality Improvement Organizations (QIOs)” had been submitted to OMB for review. The business proposal forms will be one element of the historical cost data from which CMS can analyze future proposed costs for QIOs. In addition, the business proposal format will standardize the cost proposing and pricing process among all QIOs. Comments are due August 21, 2014.
• On July 22, 2014, FDA announced an opportunity for public comment on a proposed information collection entitled “513(g) Request for Information”. Section 513(g) of the Federal Food, Drug, and Cosmetic Act (the FD Act) (21 U.S.C. 360c(g)) provides a means for obtaining the Agency's views about the classification and regulatory requirements that may be applicable to a particular device. Section 513(g) provides that within 60 days of the receipt of a written request of any person for information respecting the class in which a device has been classified or the requirements applicable to a device under the FD Act, the Secretary of Health and Human Services shall provide such person a written statement of the classification (if any) of such device and the requirements of the FD Act applicable to the device. Respondents to this collection of information are mostly device manufacturers; however, anyone may submit a 513(g) request for information. Comments are due September 22, 2014.
• On July 23, 2014, FDA issued an information collection request regarding pH of smokeless tobacco products. To become better informed about the impact of the use of tobacco products on the public health, FDA would request information about the effects of product pH in smokeless tobacco products from all tobacco product manufacturers. Comments are due September 22, 2014. More information may be found here.
• On July 23, 2014, FDA announced the availability of Draft and Revised Draft Guidances for Industry Describing Product-Specific Bioequivalence Recommendations. The recommendations provide product-specific guidance on the design of BE studies to support abbreviated new drug applications (ANDAs). In the Federal Register of June 11, 2010, FDA announced the availability of a guidance for industry entitled “Bioequivalence Recommendations for Specific Products,” which explained the process that would be used to make product-specific BE recommendations available to the public on FDA's Web site. The BE recommendations identified in this notice were developed using the process described in that guidance. Comments must be received by September 22, 2014 to be assured consideration before the Agency begins work on the final versions of the guidances.
• On July 24, 2014, the Internal Revenue Service (IRS) released final and temporary regulations entitled “Rules Regarding the Health Insurance Premium Tax Credit”. This document contains final and temporary regulations relating to the health insurance premium tax credit enacted by the Affordable Care Act (ACA). These regulations affect individuals who enroll in qualified health plans (QHPs) through Affordable Insurance Exchanges and claim the premium tax credit, and Exchanges that make qualified health plans available to individuals. Of note, the rule allows married victims of domestic violence, as well as victims of spousal abandonment, to claim a premium tax credit without filing a joint return. The rules also clarify how taxpayers who are legally separated or divorced can allocate certain measures used to calculate their premium tax credit eligibility and amount of advance premium tax credit payments on a tax return. The rule will be published in the Federal Register on July 28, 2014.
• On July 24, 2014, IRS released final regulations and temporary regulations entitled “Branded Prescription Drug Fee”. This document contains final regulations that provide guidance on the annual fee imposed on covered entities engaged in the business of manufacturing or importing branded prescription drugs. This fee was enacted by section 9008 of the Patient Protection and Affordable Care Act, as amended by section 1404 of the Health Care and Education Reconciliation Act of 2010. This document also withdraws the Branded Prescription Drug Fee temporary regulations and contains new temporary regulations regarding the definition of controlled group that apply beginning on January 1, 2015. The final regulations and the new temporary regulations affect persons engaged in the business of manufacturing or importing certain branded prescription drugs. The rule will be published in the Federal Register on July 28, 2014.
• On July 25, 2014, CMS released its “Medicare and Medicaid Programs; Quarterly Listing of Program Issuances-April Through June 2014”. This quarterly notice lists CMS manual instructions, substantive and interpretive regulations, and other Federal Register notices that were published from April through June 2014, relating to the Medicare and Medicaid programs and other programs administered by CMS.
• On July 25, 2014, CMS sent the following information collection requests to OMB for review: 1) Improving Quality of Care in Medicaid and CHIP through Increased Access to Preventive Services State Survey; and 2) Cooperative Agreement to Support Navigators in Federally-facilitated and State Partnership Exchanges. Comments on these proposals are due August 25, 2014. More information may be found here.
• On July 25, 2014, FDA released a revised draft guidance for industry entitled “Providing Regulatory Submissions in Electronic Format-Certain Human Pharmaceutical Product Applications and Related Submissions Using the Electronic Common Technical Document Specifications”. The draft guidance announced in this notice is being issued in accordance with the Food and Drug Administration Safety and Innovation Act (FDASIA), which amended the Federal Food, Drug, and Cosmetic Act (FD&C Act) to require that certain submissions under the FD&C Act and Public Health Service Act (PHS Act) be submitted in electronic format, beginning no earlier than 24 months after issuance of the final version of the guidance on that topic. The draft guidance outlines Electronic Common Technical Document (eCTD) specification requirements for certain submissions to new drug applications (NDAs), abbreviated new drug applications (ANDAs), biologics license applications (BLAs), and investigational new drug applications (INDs) and is being issued for public comment. Comments must be received by September 23, 2014 to be assured consideration before the Agency begins work on the final version of the guidance. More information may be found here.

Event Notices

• August 5-6, 2014: The Federal Committee on Training in Primary Care Medicine and Dentistry (ACTPCMD) will hold meetings August 5th and 6th in Rockville, Maryland. The meeting will begin with introductions of seven new members to the committee and then move to opening remarks from HRSA senior officials who will provide an update on HRSA's newly created Bureau of Health Workforce. The new members will receive a comprehensive update on the committee's latest 11th Report to Congress, which will focus on the training of health professionals in community settings, the members will then break-out into workgroups and continue development of the report. A short timeline for finalizing the report will be created. An opportunity will be provided for public comment at the end of each day of the meeting, or written comments to the members may be sent prior to the meeting to Shane Rogers at srogers@hrsa.gov. More information may be found here.
• September 5, 2014: FDA is announcing a public meeting to discuss current scientific and regulatory approaches to biomarker development, acceptance, and utility in drug and biologic development programs. The purpose of the public meeting is to initiate constructive discussion and information sharing on the advancement of biomarker science in the context of therapeutic product development among relevant stakeholders. Specifically, the meeting will focus on identifying challenges for biomarker applications in early- and late-phase clinical trials and emerging best practices for successful biomarker-based programs, including co-development of in vitro diagnostic devices and use of biomarkers as outcome measures in clinical trials. FDA is conducting this meeting in collaboration with Brookings Institution. This meeting satisfies an FDA commitment that is part of the fifth authorization of the Prescription Drug User Fee Act (PDUFA V). More information may be found here.
• November 4-5, 2014: FDA’s Center for Drug Evaluation and Research/Office of Medical Policy and the Duke University Office of Continuing Medical Education are cosponsoring a 3-day training course for clinical investigators on scientific, ethical, and regulatory aspects of clinical trials. This training course is intended to provide clinical investigators with expertise in the design, conduct, and analysis of clinical trials; improve the quality of clinical trials; and enhance the safety of trial participants. Senior FDA staff will communicate directly with clinical investigators on issues of greatest importance for successful clinical research. The training course will be held November 4th and 5th in College Park, Maryland. More information may be found here.

II. LEGISLATION & COMMITTEE ACTION

U.S. Senate

• On July 23, 2014, the Senate Health, Education, Labor and Pensions (HELP) Committee held hearing on health and income security bills, including: HR 2083 — Protecting Students from Sexual and Violent Predators Act; S 315 — A bill to reauthorize and extend the Paul D. Wellstone Muscular Dystrophy Community Assistance, Research, and Education Amendments of 2008; S 2154 — Emergency Medical Services for Children Reauthorization Act; S 531 — A bill to provide for the publication by the secretary of Health and Human Services of physical activity guidelines for Americans; S 2405 — Trauma Systems and Regionalization of Emergency Care Reauthorization Act; S 2406 — Improving Trauma Care Act; S 2539 — Traumatic Brain Injury Reauthorization Act; S 2511 — A bill to amend the Employee Retirement Income Security Act of 1974 to clarify the definition of substantial cessation of operations. More information on the hearing may be found here.

House of Representatives

• On July 22, 2014, the House Energy and Commerce Health Subcommittee held a hearing entitled “21st Century Cures: Examining Barriers to Ongoing Evidence Development and Communication”. Witnesses for the hearing included Mary Grealy, President, Healthcare Leadership Council; Michael A. Mussallem, Chairman and CEO, Edwards Lifesciences; Gregory Schimizzi M.D., Cofounder, Carolina Arthritis Associates, On Behalf of the Alliance for Specialty Medicine; Josh Rising, MD, MPH, Director, Medical Devices, The Pew Charitable Trusts; Louis Jacques, Senior Vice President and Chief Clinical Officer, ADVI. More information may be found here.
• On July 23, 2014, the House Ways and Means Subcommittee on Oversight held a hearing on the integrity of the administration of the ACA premium tax credit. The sole witness for the hearing was Mr. Seto Bagdoyan, Acting Director, Audit Services, Forensic Audits and Investigative Service, Government Accountability Office (GAO). More information on the hearing may be found here. During the hearing Bagdoyan testified that GAO was asked to examine issues related to controls for application and enrollment for coverage through the FFE. As part of its investigation, he said, GAO went undercover and created 18 fictitious identities to apply for insurance subsidies online, over the phone, and in person. Bagdoyan testified that the federal Marketplace approved coverage for 11 of 12 fictitious applicants who initially applied online, or by telephone, and in all 11 cases, GAO obtained an advance premium tax credit, totaling around $2,500 per month. The full report detailing GAO’s preliminary results may be accessed here.
• On July 23, 2014, the House Energy and Commerce Health Subcommittee held a roundtable discussion on personalized medicine as part of the Committee’s 21st Century Cures initiative. Panelists included Dr. Jeff Shuren, Director, Center for Devices and Radiological Health (CDRH), U.S. Food and Drug Administration (FDA); Dr. Richard Moscicki, Deputy Center Director for Science Operations, Center for Drug Evaluation and Research (CDER), FDA; Dr. Andrew Futreal, Professor, Genomic Medicine, MD Anderson Cancer Center; Dr. Franklin Cockerill, Chair, Laboratory Medicine and Pathology, Mayo Clinic; Mr. Martin Naley, Entrepreneur-in-Residence, Genomic Informatics, Apple Tree Partners; Dr. Susanne Haga, Associate Research Professor, Institute for Genome Sciences and Policy, Duke University; Dr. Sean Bohen, Senior Vice President, Early Development, Genentech; Dr. Louis DeGennaro, Interim President and CEO, Chief Mission Officer, Leukemia & Lymphoma Society; Dr. Patrick O’Gara, Director, Clinical Cardiology, Brigham and Women’s Hospital; Dr. Edward Abrahams, President ,Personalized Medicine Coalition; Dr. Laura Koontz, Director of Policy, Ovarian Cancer National Alliance; and Mr. Patrick Groody, Ph.D, Senior Director, Integrated Business Planning, Molecular Diagnostics, Abbott. More information may be found here.
• On July 24, 2014, the House Rules Committee approved H. Res 676, allowing Congressional Republicans to advance a lawsuit against President Obama regarding the Administration’s decision to delay the ACA employer mandate. The panel rejected all 11 Democratic amendments to the measure.
• On July 24, 2014, the House Ways and Means Health Subcommittee held a hearing on the future of the Medicare Advantage (MA) program. Witnesses for the hearing included Chris Wing, Chief Executive Officer, SCAN Health Plans; Jeff Burnich, M.D. Senior Vice President & Executive Officer, Sutter Medical Network, on behalf of CAPG; Robert Book, PhD, Senior Research Director, Health Systems Innovation Network, LLC, Outside Healthcare and Economics Expert, American Action Forum; and Joe Baker, President, Medicare Rights Center. More information may be found here.

III. REPORTS, STUDIES, & ANALYSES

• A study published in the New England Journal of Medicine this week finds that 10.3 million people gained health coverage during the first ACA open enrollment period. Researchers from Harvard and HHS found a significant decline in the uninsured rate among nonelderly adults that coincided with the initial open-enrollment period under the ACA. These changes remained highly significant after adjustment for potential confounders such as employment, demographic characteristics, and income. The pattern of coverage gains was consistent with the effects of the ACA, with major gains for persons likely to be eligible for expanded Medicaid on the basis of their income and state of residence but smaller and non-significant changes for low-income adults in states without Medicaid expansion. The study found evidence that within the first 6 months of gaining insurance, more adults reported having a personal doctor and fewer had difficulties paying for medical care — even though the latter measure asked about the prior 12 months. These results are consistent with studies of previous insurance expansions that have shown that gains in coverage can lead to rapid improvements in access. A press release from HHS highlighting findings may be accessed here.
• On July 23, 2014, the National Center for Policy Analysis (NCPA) released a report entitled “Health Care Spending and the Affordable Care Act”. The report finds that it is unlikely that ACA provisions intended to constrain Medicare spending will achieve their desired results. In addition, the authors suggest, the law’s individual mandate and Medicare expansions provisions will most likely increase health care demand and thus spending in coming years.
• On July 24, 2014, HHS issued a report showing that the ACA’s Medical Loss Ratio (MLR) provision has saved consumers a total of $9 billion on their health insurance premiums since 2011. The MLR rule (also known as the 80/20 rule), requires insurers to spend at least 80 percent of premium dollars on patient care and quality improvement activities. Under the law, if insurers do not meet this threshold, they owe a refund back to consumers. The data shows that last year, consumers saved $3.8 billion on premiums. Nationwide, the report finds, 6.8 million consumers are due to receive an average refund benefit of $80 per family. A related HHS press release may be found here.

IV. OTHER HEALTH POLICY NEWS

• On July 22, 2014, the U.S. Court of Appeals for the District of Columbia Circuit concluded in Halbig v. Burwell, No. 14-5018, that the IRS Rule implementing the ACA’s tax credit provision is invalid. The rejected IRS Rule makes tax credits available to individuals purchasing health plans on both state and federally established Health Insurance Exchanges. The D.C. Circuit held that this interpretation is contrary to the language in 26 U.S.C. § 36B(b)(2), which requires the IRS to calculate tax credits for premiums for qualified health plans “which were enrolled in through an Exchange established by the State under 1311[.]” While the Court was willing to accept the government’s argument that a federally facilitated exchange established under section 1321 of the ACA could be said to have been established under section 1311, it rejected the idea that the statutory language would permit such an exchange to be “an Exchange established by the State.” The D.C. Circuit thus struck down the IRS Rule as contrary to the statute’s plain language. Several hours after the D.C. Circuit issued Halbig, the U.S. Court of Appeals for the Fourth Circuit reached the exact opposite result in King v. Burwell, No. 14-1158. The Fourth Circuit upheld the IRS Rule by finding that § 36B(b)(2) is ambiguous and then deferring to the IRS’s reading of the statutory language as a permissible exercise of agency discretion.

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.