Alston & Bird Healthcare Week in Review, September 15, 2017

I. Regulations, Notices, & Guidance

• On September 11, 2017, the Food and Drug Administration (FDA) issued a notice entitled, Center for Devices and Radiological Health Premarket Approval Application Critical to Quality Pilot Program. The FDA’s Center for Devices and Radiological Health (CDRH or Center), Office of Compliance (OC) and Office of In Vitro Diagnostics and Radiological Health (OIR) is announcing its Premarket Approval Application Critical to Quality (PMA CtQ) pilot program. Participation in the PMA CtQ pilot program is voluntary and the program aims to evaluate device design and manufacturing process quality information early on to assist FDA in its review of the PMA manufacturing section and post-approval inspections. According to the FDA, the voluntary pilot program is part of the FDA's ongoing Case for Quality effort to apply innovative strategies that promote medical device quality and is a joint effort between the FDA's CDRH and Office of Regulatory Affairs (ORA). The pilot program is intended to provide qualifying PMA applicants with the option to engage FDA on development of CtQ controls for their device and forego the standard PMA preapproval inspection. The pilot program will run from September 29, 2017, to December 31, 2018.
• On September 11, 2017, the FDA issued a guidance entitled, Evaluation and Reporting of Age, Race, and Ethnicity Data in Medical Device Clinical Studies. The purpose of the guidance is to outline the FDA’s recommendations and expectations for the evaluation and reporting of age, race, and ethnicity data in medical device clinical studies. According to the FDA, the primary intent of these recommendations is to improve the quality, consistency, and transparency of data regarding the performance of medical devices within specific age, race, and ethnic groups. Comments may submitted at any time.
• On September 11, 2017, the National Institutes of Health (NIH) issued a notice entitled, Government-Owned Inventions; Availability for Licensing. The notice announces that the government owned intellectual property covering imaging agents with improved renal clearance is available for licensing and commercialization. The invention is called Evans blue dye derivatives for serum albumin labeling.
• On September 12, 2017, the FDA issued a draft guidance entitled, Microdose Radiopharmaceutical Diagnostic Drugs: Nonclinical Study Recommendations. The draft guidance is ntended to assist developers of microdose radiopharmaceutical diagnostic drugs on the nonclinical studies recommended to support human clinical trials and marketing authorization. The draft guidance discusses how to refine nonclinical study recommendations for this class of drug given its unique characteristics. This draft guidance is intended to provide recommendations for a pathway to full drug development (marketing authorization) for microdose radiopharmaceutical diagnostic drugs. Comments are due by November 13, 2017.
• On September 12, 2017, the NIH issued a notice entitled, Government-Owned Inventions; Availability for Licensing. The notice announces that the government owned intellectual property covering HIV-1 reverse transcriptase inhibitors is available for licensing and commercialization. The invention relates to compounds that inhibit HIV-1 DNA synthesis mediated by reverse transcriptase (RT). HIV-1 DNA synthesis by RT utilizes deoxynucleoside 5’-triphosphate (dNTP) as substrate and like many other enzymes, the reaction is reversible.
• On September 13, 2017, the FDA issued a notice entitled, Biosimilar User Fee Rates for Fiscal Year 2018. The notice announces the rates for biosimilar user fees for fiscal year (FY) 2018. The Federal Food, Drug, and Cosmetic Act (the FD&C Act), as amended by the Biosimilar User Fee Amendments of 2017 (BsUFA II), authorizes the FDA to assess and collect user fees for certain activities in connection with biosimilar biological product development; review of certain applications for approval of biosimilar biological products; and each biosimilar biological product approved in a biosimilar biological product application. BsUFA II directs FDA to establish, before the beginning of each fiscal year, the amount of initial and annual biosimilar biological product development (BPD) fees, the reactivation fee, and the biosimilar biological product application and program fees for such year. These fees apply to the period from October 1, 2017, through September 30, 2018.
• On September 13, 2017, the FDA issued a notice entitled, Prescription Drug User Fee Rates for Fiscal Year 2018. The notice announces the rates for prescription drug user fees for fiscal year FY 2018. The FD&C Act, as amended by the Prescription Drug User Fee Amendments of 2017 (PDUFA VI), authorizes FDA to collect application fees for certain applications for the review of human drug and biological products, and prescription drug program fees for certain approved products. This notice establishes the fee rates for FY 2018.
• On September 14, 2017, the NIH issued a notice entitled, Government-Owned Inventions; Availability for Licensing. The notice announces that Recombinant HIV-1 Envelope Proteins and Their Use is available for licensing.
• On September 14, 2017, the FDA issued a notice entitled, Medical Devices Regulated by the Center for Biologics Evaluation and Research. The notice announces that the FDA is publishing a list of premarket approval applications (PMAs) that have been approved by the Center for Biologics Evaluation and Research (CBER). This list is intended to inform the public of the availability of safety and effectiveness summaries of approved PMAs through the internet and the Agency's Dockets Management Staff.
• On September 14, 2017, the FDA issued a draft guidance entitled, Utilizing Animal Studies to Evaluate Organ Preservation Devices. The intent of this draft guidance is to provide recommendations regarding best practices for utilizing animal studies for the evaluation of organ preservation devices. The draft guidance is not final nor is it in effect at this time. Comments are due by November 14, 2017.
• On September 14, 2017, the FDA issued a draft guidance entitled, The Index of Legally Marketed Unapproved New Animal Drugs for Minor Species. The draft guidance describes the process for adding a new animal drug to the Index of Legally Marketed Unapproved New Animal Drugs for Minor Species (the Index). The Index consists of a list of legally marketed unapproved new animal drugs for minor species that meet the requirements of the FD&C Act. Comments are due by November 14, 2017.
• On September 14, 2017, the FDA issued a draft guidance entitled, Regulatory Considerations for Microneedling Devices. The draft guidance is being issued to assist industry in understanding when a microneedling product is a device as defined in the FD&C Act. The draft guidance is not final nor is it in effect at this time. Comments are due by November 14, 2017.
• On September 14, 2017, the FDA issued a guidance entitled, Establishing the Performance Characteristics of In Vitro Diagnostic Devices for the Detection or Detection and Differentiation of Human Papillomaviruses. The guidance provides recommendations to facilitate study designs to establish the performance characteristics of in vitro diagnostic devices (IVDs) intended for the detection, or detection and differentiation, of human papillomaviruses (HPVs). This guidance replaces a previously issued final guidance entitled “Establishing the Performance Characteristics of In Vitro Diagnostic Devices for the Detection, or Detection and Differentiation of Human Papillomaviruses,” dated November 28, 2011. Comments may be submitted at any time.
• On September 14, 2017, the FDA issued a notice entitled, Determination that TIMOPTIC (Timolol Maleate Ophthalmic Solution), 0.25 Percent and 0.5 Percent, Was Not Withdrawn from Sale for Reasons of Safety or Effectiveness. The notice announces that the FDA has determined that TIMOPTIC (timolol maleate ophthalmic solution), 0.25 percent and 0.5 percent, was not withdrawn from sale for reasons of safety or effectiveness. According to the FDA, this determination means that the FDA will not begin procedures to withdraw approval of abbreviated new drug applications (ANDAs) that refer to this drug product, and it will allow the FDA to continue to approve ANDAs that refer to the product as long as they meet relevant legal and regulatory requirements.
• On September 14, 2017, the FDA issued a notice entitled, Determination That CORTONE (Cortisone Acetate) Tablets and Other Drug Products Were Not Withdrawn From Sale for Reasons of Safety or Effectiveness. The notice announces that the FDA has determined that the drug products listed in this document were not withdrawn from sale for reasons of safety or effectiveness. According to the FDA, this determination means that the FDA will not begin procedures to withdraw approval of ANDAs that refer to these drug products, and it will allow FDA to continue to approve ANDAs that refer to the products as long as they meet relevant legal and regulatory requirements.
• On September 14, 2017, the FDA issued a notice entitled, Advisory Committee; Nonprescription Drugs Advisory Committee, Renewal. The notice announces the renewal of the Nonprescription Drugs Advisory Committee. The new charter will be in effect until August 27, 2019.
• On September 15, 2017, the CDC issued a notice entitled, Solicitation of Nominations for Appointment to the Healthcare Infection Control Practices Advisory Committee (HICPAC). The notice announces that the CDC is seeking nominations for membership on the HICPAC. The HICPAC consists of 14 experts in fields including but not limited to, infectious diseases, infection prevention, healthcare epidemiology, nursing, clinical microbiology, surgery, hospitalist medicine, internal medicine, epidemiology, health policy, health services research, public health, and related medical fields. Nominations are being sought for individuals who have expertise and qualifications necessary to contribute to the accomplishments of the committee’s objectives. Nominations must be received by November 30, 2017.

• September 25, 2017: The Centers for Medicare & Medicaid Services (CMS) announced a meeting of the Medicare Advisory Panel on Clinical Diagnostic Laboratory Tests (the Panel). The Agenda for the September 25, 2017, Panel Meeting will provide for discussion and comment on the following topics as designated in the Panel’s charter: (1) CY 2018 CLFS laboratory test codes for which CMS received no applicable information to calculate a Medicare payment rate; and (2) Other CY 2018 CLFS issues designated in the Panel’s charter.
• October 25 – 26, 2017: The Centers for Disease Control and Prevention (CDC) announced a meeting of the Advisory Committee on Immunization Practices (ACIP). The agenda will include discussions on adult immunization schedule, child/adolescent immunization schedule, influenza vaccines, anthrax vaccine, Japanese encephalitis vaccines, hepatitis vaccines, herpes zoster vaccines, human papillomavirus vaccines, mumps vaccine, pneumococcal vaccines, respiratory syncytial virus vaccine and immunization safety update. A recommendation vote is scheduled for adult immunization schedule, child/adolescent immunization schedule, hepatitis vaccines and herpes zoster vaccines. A Vaccines for Children vote is scheduled for hepatitis vaccines. Agenda items are subject to change as priorities dictate.
• November 1 – 2, 2017: The CDC announced a meeting of the Clinical Laboratory Improvement Advisory Committee (CLIAC). The agenda will include agency updates from CDC, Centers for Medicare and Medicaid Services (CMS), and The Food and Drug Administration (FDA). Presentations and discussions will focus on laboratory testing in the era of telemedicine; antibiotic resistance testing issues; culture independent diagnostic tests; and a report from the Institute of Medicine (IOM) CLIAC workgroup.
• November 8 – 9, 2017: The CDC announces a meeting of the HICPAC. The agenda will include updates on the CDC’s activities for prevention of healthcare associated infections (HAIs), and the Division of Healthcare Quality Promotion’s modeling efforts. It will also include updates from the following HICPAC workgroups: the Guideline for Prevention of Infection in Neonatal Intensive Care Unit (NICU) Patients; the Guideline for Prevention of Infection in Healthcare Personnel; the workgroup on updating the CDC recommendation categorization scheme; the workgroup on developing the CDC recommendations for products and practices; and the National Healthcare Safety Network (NHSN) Surveillance Workgroup.
• November 9, 2017: The CDC announced a meeting of the Advisory Committee to the Director, Centers for Disease Control and Prevention – Health Disparities Subcommittee (ACD, CDC-HDS). The Health Disparities Subcommittee agenda will include discussions on addressing health disparities in achieving the agency’s overarching health impact goals including selected observations from the HDS for the ACD, CDC to consider, and on progress of the HDS, and on progress toward activities related to data disaggregation and childhood trauma.

II. Congressional Legislation & Committee Action

• On September 12, 2017, the Senate Health, Education, Labor and Pensions (HELP) Committee will hold a hearing entitled, Stabilizing Premiums in the Individual Insurance Market for 2018: State Flexibility. The witnesses scheduled to testify include: Michael Leavitt, Former HHS Secretary; Allison Leigh O’Toole, CEO on MNsure; Tarren Bragdon, CEO of Kaiser Foundation Hospitals and Health Plan, Inc; and Tammy Tomczyk, Senior Principal and Consulting Actuary, Oliver Wyman. T
• On September 12, 2017, the Senate Finance Committee held a hearing entitled, Health Care: Issues Impacting Cost and Coverage. The witnesses scheduled to testify include: Avik Roy, Co-Founder and President of the Foundation for Research on Equal Opportunity; Edmund Haislmaeier, Senior Research Fellow at the Heritage Foundation; Andrew Slavitt, Former Acting Administrator, CMS; and Aviva Aron-Dine, Senior Fellow and Senior Counselor at the Center on Budget and Policy Priorities.
• On September 14, 2017, the Senate HELP Committee held a hearing entitled, Stabilizing Premiums in the Individual Insurance Market for 2018: Health Care Stakeholders. The witnesses scheduled to testify include: Manny Sethi M.D., President of Healthy Tennessee, Orthopedic Trauma Surgeon, Nashville, TN; Susan L Turney MD, MS, FACP, FACMPE, Chief Executive Officer, Marshfield Clinic Health System, Inc., Marshfield, WI; Robert Ruiz-Moss, Vice President, Individual Market Segment, Anthem Inc.; Christina Postolowski, Rocky Mountain Regional Director, Young Invincibles, Denver, CO; and Raymond G. Farmer, Director, South Carolina Department of Insurance NAIC Secretary-Treasurer.

• On September 13, 2017, the House Energy & Commerce Health Subcommittee will hold a hearing entitled, Modernizing the FDA’s Regulation of Over-the-Counter Drugs. The witnesses included Janet Woodcock, Director, Center for Drug Evaluation and Research, FDA; Scott Melville, President and CEO, Consumer Health Products Association; Kirsten Moore, Project Director, Health Care Products, The Pew Charitable Trusts; Michael Werner, Partner, Holland and Knight, on behalf of the Public Access to SunScreens (PASS) Coalition; Bridgette Jones, Chair, American Academy of Pediatrics; and Gil Roth, President, Pharma and Biopharma Outsourcing Association.
• On September 13, 2017, the House Energy & Commerce Health Subcommittee held a markup of H.R. 1148, the Furthering Access to Stroke Telemedicine (FAST) Act of 2017; H.R. 2465, the Steve Gleason Enduring Voices Act of 2017; H.R. 2557, the Prostate Cancer Misdiagnosis Elimination Act of 2017; H.R. 3120, to amend Title XVIII of the Social Security Act to Reduce the volume of future electronic health record-related significant hardship requests; H.R. 3245, the Medicare Civil and Criminal Penalties Update Act; H.R. 3263, to amend Title XVIII of the Social Security Act to extend the Medicare independence at home medical practice demonstration program; and H.R. 3271, the Protecting Access to Diabetes Supplies Act of 2017. All bills under consideration were favorably reported by a voice vote.
• On September 14, 2017, the House Energy & Commerce Health Subcommittee held a hearing entitled, Supporting Tomorrow’s Health Providers: Examining Workforce Programs Under the Public Health Service Act. The witnesses included Dr. Adrian Billings, Chief Medical Officer, Preventative Care Health Services; Dr. Neil S. Calmanm President, American Association of Teaching Health Centers; Dr. Janice A. Knebl, Dallas Southwest Osteopathic Physicians Endowed Chair and Professor in Geriatrics, University of North Texas Health Science Center; and Dr. Juliann G. Sebastian, Dean and Professor, College of Nursing, University of Nebraska Medical Center.
• On September 14, 2017, the House Ways & Means Committee held a markup of H.R. 3726, the Stark Administrative Simplification Act of 2017, R. 3727, to amend Title XVIII of the Social Security Act to include additional telehealth services for purposes of MA organization bids, and for other purposes, H.R. 3729, the Comprehensive Operations, Sustainability, and Transport Act of 2017, H.R. 2824, the Increasing Opportunity through Evidence-Based Home Visiting Act, H.R. 2792, the Control Unlawful Fugitive Felons Act. All bills were reported favorably by a voice vote.

• On September 11, 2017, the Office of Inspector General (OIG) released a report entitled, Kansas Did Not Always Verify Correction of Deficiencies Identified During Surveys of Nursing Homes Participating in Medicare and Medicaid. The report found that on the basis of the OIG’s review of 100 sampled deficiencies, the OIG determined that the Kansas Department of Aging and Disability Services, Survey, Certification and Credentialing Commission (State agency), did not always verify nursing homes' correction of deficiencies identified during surveys in calendar year 2014 in accordance with Federal requirements. We estimated that the State agency did not obtain the nursing homes' evidence verifying correction of deficiencies in accordance with Federal requirements for 52 percent of the deficiencies identified during surveys in CY 2014. The OIG also estimated that the State agency could not provide sufficient evidence that corrective actions had been taken for 13 percent of the deficiencies identified during those surveys. In addition, the State agency did not always conduct required standard surveys within 15 months of the previous standard surveys in CY 2014 in accordance with Federal requirements.
• On September 11, 2017, the OIG released a report entitled, CMS and Its Claims Processing Contractors Issued Conflicting Guidance on the Proper Use of the KX Modifier for Part B Immunosuppressive Drug Claims. The report found that Medicare Part B paid for some immunosuppressive drugs billed with the KX modifier that were not eligible for Part B payment. Of the 75 claims in our random sample, pharmacies had documentation to support the KX modifier for 65 claims but did not have support for the remaining 10. Pharmacies improperly received $3,973 in Part B reimbursement for the immunosuppressive drugs on the 10 claims. On the basis of our sample results, we estimated that Part B paid $4.6 million in reimbursement for immunosuppressive drugs billed with the KX modifier that did not comply with Medicare requirements.
• On September 12, 2017, the OIG released a report entitled, CMS Oversight Must Continue Because All Remaining Consumer Operated and Oriented Plans Were Not Profitable and May Not Be Viable and Sustainable. The report found that several of the Consumer Operated and Oriented Plans (CO-OPs) that were operating at the beginning of 2016 are no longer viable or sustainable. Specifically, 5 of the 11 CO-OPs operating on January 1, 2016, had ceased or planned to cease operations by the end of the 2016 plan year, and each of the remaining 6 CO-OPs reported net losses and had drawn down nearly all available CO-OP loan amounts as of December 31, 2016. These six operational CO-OPs did not appear to be financially viable and sustainable based on the reported net income and available capital and surplus. When a CO-OP ceases operations during the plan year, health plan participants can be significantly affected.
• On September 12, 2017, the OIG released a report entitled, New York State Improperly Claimed Medicaid Reimbursement for Some Managed Long-Term Care Payments. The report found that New York improperly claimed reimbursement for 36 of 100 payments made to Medicaid Managed Long-Term Care (MLTC) plans. Specifically, New York did not ensure that MLTC plans documented eligibility assessments of program applicants and reassessments of those already in the program, and conducted these assessments in a timely manner. New York also did not ensure that the plans provided services to beneficiaries according to a written care plan. Further, New York did not ensure that the plans enrolled and retained only those beneficiaries who required community-based services, and disenrolled beneficiaries who requested disenrollment in a timely manner.
• On September 12, 2017, the Government Accountability Office (GAO) released a report entitled, Centers for Medicare and Medicaid Services: Analysis of Contracting Data. The report found that nearly 1 in 3 Americans relies on Medicare or Medicaid for services from hospital stays and lab tests to flu shots and prescription drugs. CMS uses an extensive network of private contractors to administer its programs. In FY 2016, CMS spent about $7.2 billion on these contracts, an increase of about 40% since 2012. The GAO found that 97% of this amount went to services, such as IT and administrative support. Additionally, since competition in government contracting generally saves money, CMS increased its use of competitive contracts from 78% to 96% during this same period.
• On September 12, 2017, the GAO released a report entitled, Health Insurance Marketplaces: CMS Needs to Improve Its Oversight of State IT Systems’ Sustainability and Performance. The report found that CMS has offered assistance through providing periodic oversight and issuing regulation and guidance to states transitioning from state-based marketplaces to the federally based marketplace IT platform, including two states that the GAO reviewed—Hawaii and Oregon—that had made that transition. While CMS provided these states with assistance, documented CMS transition guidance was not finalized until after the two states had completed their transition. The two states incurred costs of approximately $84.3 million, collectively, to transition to the federal platform. The two states' transition efforts included making changes to their Medicaid systems, with these states mainly relying on Medicaid matching funds from CMS to do this. While the selected states successfully transitioned, they encountered challenges during their transitions, due to accelerated transition time frames, difficulties reassigning marketplace responsibilities, delays in receiving approvals from CMS, and trouble accessing historical consumer data in previous vendor-developed marketplace IT systems.
• On September 13, 2017, the OIG released a report entitled, Arkansas Did Not Make Supplemental Payments in Accordance With Federal Requirements. The report found that Arkansas did not always make the supplemental Medicaid payments in accordance with Federal requirements. Sixteen of the 120 supplemental payments in the OIG’s stratified random sample were correct. For 88 of the remaining 104 supplemental payments, Arkansas incorrectly calculated the amount of the payments. An additional six supplemental payments were correctly calculated but were made to ineligible providers. The remaining 10 supplemental payments were both calculated incorrectly and were made to ineligible providers. On the basis of the OIG’s sample results, the OIG estimated that Arkansas improperly received at least $7.1 million in additional Federal share, of which the OIG recommended that Arkansas refund approximately $3 million to the Federal Government for the Federal share associated with the inappropriate supplemental payments.
• On September 13, 2017, the GAO released a report entitled, Medicaid Managed Care: CMS Should Improve Oversight of Access and Quality in States' Long-Term Services and Supports Programs. The report found that Medicaid beneficiaries who need long-term care can get it in their homes, community settings, or an institution such as a nursing home. Many states contract with managed care organizations to provide this care. The 6 states the GAO reviewed used various methods (e.g., beneficiary surveys) to monitor access and quality in managed long-term care programs. However, CMS did not always require the states to report information it needs for oversight, such as beneficiary concerns or whether there are enough providers.
• On September 14, 2017, the Congressional Budget Office (CBO) released a report entitled, Federal Subsidies for Health Insurance Coverage for People Under Age 65: 2017 to 2027. The report found that the CBO and the Joint Committee on Taxation project that the federal subsidies, taxes, and penalties associated with health insurance coverage for people under age 65 will result in a net subsidy from the federal government of $705 billion in 2017.
• On September 15, 2017, the OIG released a report entitled, Drug Supply Chain Security: Wholesalers Exchange Most Tracing Information. The report found  that all 31 selected wholesalers exchange drug product tracing information. Of these, 17 wholesalers -- including the 3 largest wholesalers that account for more than 80 percent of drug distribution revenue -- exchange all required drug product tracing information. The remaining 14 exchange most elements of drug product tracing information but are missing a few of the required elements. The Drug Supply Chain Security Act requires the exchange of drug product tracing information for every transaction to create a tracing record for drug products as they move through the drug supply chain. Complete drug product tracing information can improve drug supply chain security by supporting FDA and other appropriate State and Federal agencies' investigations of suspect and illegitimate drug products and potential diversion.

Iv. Other Health Policy News

• On September 12, 2017, the FDA issued a guidance agenda entitled, New & Revised Draft Guidances CDER is Planning to Publish During Calendar Year 2017. The agenda discusses the new and revised draft guidances that CDER is planning to publish during CY 2017.
• On September 13, 2017, CMS posted an update to the Health Insurance Exchanges Issuer County Map. The map is of projected issuer participation on the Health Insurance Exchanges in 2018 based on the known issuer public announcements through September 13, 2017. According to CMS, participation is expected to fluctuate and does not represent actual Exchange application submissions.
• On September 13, 2017, it was reported that the Senate Finance Committee reached an agreement that would provide an estimated $8 billion in funding for the Children’s Health Insurance Program for an additional five years.
• On September 13, 2017, Senators Lindsey Graham (R-SC), Bill Cassidy (R-LA), Dean Heller (R-NV), and Ron Johnson (R-WI) introduced the “Graham-Cassidy-Heller-Johnson (GCHJ) proposal to repeal and replace the Affordable Care Act (ACA). The GCHJ proposal would repeal the ACA and replace it with a block grant. The legislative text can be accessed here.
• On September 14, 2017, CMS gave the public its first look at the newly designed Medicare card. The new Medicare card contains a unique, randomly-assigned number that replaces the current Social Security-based number. CMS will begin mailing the new cards to people with Medicare benefits in April 2018 to meet the statutory deadline for replacing all existing Medicare cards by April 2019. In addition to today’s announcement, people with Medicare will also be able to see the design of the new Medicare card in the 2018 Medicare & You Handbook. The handbooks are being mailed and will arrive throughout September.