Alston & Bird Health Care Week in Review, December 20, 2019

Below is Alston & Bird’s Health Care Week in Review, which provides a synopsis of the latest news in healthcare regulations, notices, and guidance; federal legislation and congressional committee action; reports, studies, and analyses; and other health policy news.

Week in Review Highlight of the Week:

On December 18, the Food and Drug Administration released its long-awaited proposed rule and guidance intended to allow states and drug makers import lower cost prescription drugs from other countries. Read more about these regulations and other news below.

I. Regulations, Notices, & Guidance

• On December 16, 2019, the Food and Drug Administration (FDA) issued a proposed rule entitled, Revised Procedures for the Announcement of Approvals and Denials of Premarket Approval Applications and Humanitarian Device Exemption Applications. This proposed rule would amend the medical device regulations regarding the procedures for the announcement of approvals and denials of premarket approval applications (PMAs) and humanitarian device exemption applications (HDEs). FDA proposes to discontinue publishing in the Federal Register after each quarter a list of PMA and HDE approvals and denials announced in that quarter. FDA will continue to post approval and denial notices for PMAs and HDEs on FDA’s home page on the internet and will also continue to make available on the internet and place on public display summaries of safety and effectiveness data for PMAs and summaries of safety and probable benefit for HDEs. FDA is proposing to take this action to improve the efficiency of announcing approvals and denials of PMAs and HDEs and to eliminate duplication in the current process for announcing this information.
• On December 17, 2019, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule entitled, Medicare and Medicaid Programs: Organ Procurement Organizations Conditions for Coverage: Revisions to the Outcome Measure Requirements for Organ Procurement Organization. This proposed rule would revise the Organ Procurement Organization (OPO) Conditions for Coverage (CfCs) to increase donation rates and organ transplantation rates by replacing the current measures with new transparent, reliable, and objective measures.
• On December 17, 2019, the Department of Health & Human Services (HHS) issued a proposed rule entitled, Removing Financial Disincentives to Living Organ Donation. HHS proposes to amend the regulations implementing the National Organ Transplant Act of 1984, as amended (NOTA), to remove financial barriers to organ donation by expanding the scope of reimbursable expenses incurred by living organ donors to include lost wages and childcare and elder-care expenses incurred by a primary care giver. HHS is committed to reducing the number of individuals on the organ transplant waiting list by increasing the number of organs available for transplant. This proposed rule implements Section 8 of the Executive Order (E.O.) on Advancing American Kidney Health, issued on July 10, 2019, which directs HHS to propose a regulation allowing living organ donors to be reimbursed for related lost wages, child-care expenses, and elder-care expenses through the Reimbursement of Travel and Subsistence Expenses Incurred toward Living Organ Donation program.
• On December 18, 2019, FDA issued a proposed rule entitled, Importation of Prescription Drugs. FDA is proposing to amend its regulations to implement a provision of the Federal Food, Drug, and Cosmetic Act (FD&C Act) to allow importation of certain prescription drugs from Canada. If the rule is finalized as proposed, States or certain other non-federal governmental entities would be able to submit importation program proposals to FDA for review and authorization. An importation program could be co-sponsored by a pharmacist, a wholesaler, or another State or non-federal governmental entity. The rule, when finalized, would contain all requirements necessary for a State or other non-federal governmental entity and its co-sponsors, if any, to demonstrate that their importation program will pose no additional risk to the public’s health and safety. In addition, the proposed rule would require that the State or non-federal governmental entity and its co-sponsors, if any, explain why their program would be expected to result in a significant reduction in the cost of covered products to the American consumer
• On December 18, 2019, FDA issued guidance entitled, Importation of Certain Food and Drug Administration-Approved Human Prescription Drugs, Including Biological Products. This draft guidance describes procedures to obtain a National Drug Code (NDC) for an FDA-approved prescription drug that is imported into the United States in compliance with the FD&C Act, which would provide an additional avenue through which drugs could be sold at a lower cost in the U.S. market. This draft guidance is intended to address certain challenges in the private market faced by manufacturers seeking to sell their drugs at lower costs.
• On December 18, 2019, FDA issued guidance entitled, Bridging for Drug-Device and Biologic-Device Combination Products. This draft guidance, when finalized, will represent the Agency’s thinking on how to approach bridging in new drug applications (NDAs) or biologics license applications (BLAs) for drug-device and biologic-device single entity or co-packaged combination products and will help to fulfill the performance goals under the sixth authorization of the Prescription Drug User Fee Act (PDUFA VI). For the purposes of this guidance, the term bridging refers to the process of establishing the scientific relevance of information developed in an earlier phase of the development program or another development program to support the combination product for which an applicant is seeking approval. Once the applicant has established the relevance of such information to (i.e., bridged to) its product, the applicant may be able to leverage that information to streamline the development program.
• On December 19, 2019, FDA issued a rule entitled, Neurological Devices: Reclassification of Cranial Electrotherapy Stimulator Devices Intended to Treat Anxiety and/or Insomnia; Effective Date of Requirement for Premarket Approval for Cranial Electrotherapy Stimulator Devices Intended to Treat Depression. This rule reclassifies the cranial electrotherapy stimulator (CES) device intended to treat anxiety and/or insomnia, a preamendments class III device, into class II (special controls) and subject to premarket notification. FDA is also issuing this final order to require the filing of a premarket approval application (PMA) or a notice of completion of a product development protocol (PDP) for CES devices intended to treat depression (product code JXK) and clarify the device identification of the CES device to include it as a prescription device.
• On December 19, 2019, FDA issued guidance entitled, Considerations for the Development of Dried Plasma Products Intended for Transfusion. The guidance document provides recommendations intended to assist manufacturers, sponsors, and applicants developing dried plasma products intended for transfusion in order to facilitate the availability of safe and effective dried plasma products in the United States. The guidance document provides considerations for the successful development and licensing of dried plasma products and for the approval of devices used to manufacture dried plasma. The guidance includes recommendations on optimal sources of input plasma; manufacturing and product quality, including product characterization; packaging and reconstitution; clinical studies; and device submissions.
• On December 19, 2019, FDA issued guidance entitled, Demonstrating Substantial Evidence of Effectiveness for Human Drug and Biological Products. This guidance complements and expands on the 1998 guidance entitled “Providing Clinical Evidence of Effectiveness for Human Drug and Biological Products” (the 1998 guidance). Although FDA’s evidentiary standard for effectiveness has not changed since 1998, the evolution of drug development and science has led to changes in the types of drug development programs submitted to the Agency. Specifically, there are more programs studying serious diseases lacking effective treatment, more programs in rare diseases, and more programs for therapies targeted at disease subsets. There is a need for more Agency guidance on the flexibility in the amount and type of evidence needed to meet the substantial evidence standard in these circumstances.
• On December 20, 2019, HHS issued a rule entitled, Patient Protection and Affordable Care Act; Exchange Program Integrity. This final rule revises standards relating to oversight of Exchanges established by states and periodic data matching frequency. This final rule also includes new requirements for certain issuers related to the collection of a separate payment for the portion of a plan’s premium attributable to coverage for certain abortion services.

Event Notices

• January 14, 2020: The Health Resources and Services Administration (HRSA) announced a public meeting entitled, National Advisory Council on the National Health Service Corps. Calendar Year 2020 meetings and agenda items may include, but are not limited to, the identification of National Health Service Corps (NHSC) priorities for future program issues and concerns; proposed policy changes by using the varying levels of expertise represented on the National Advisory Council on the NHSC to advise on specific program areas; updates from clinician workforce experts; and education and practice improvement in the training development of primary care clinicians.
• January 14, 2020: FDA announced a public meeting entitled, Joint Meeting of the Anesthetic and Analgesic Drug Products Advisory Committee and the Drug Safety and Risk Management Advisory Committee. The committees will discuss new drug application 211802 for oxycodegol, a new molecular entity full mu-opioid receptor agonist, submitted by Nektar Therapeutics, for the management of chronic low back pain in adult patients with pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate. The committees will be asked to discuss the safety and efficacy data as well as the overall risk-benefit profile of the product.
• January 15, 2020: FDA announced a public meeting entitled, Joint Meeting of the Anesthetic and Analgesic Drug Products Advisory Committee and the Drug Safety and Risk Management Advisory Committee. The committees will discuss new drug application (NDA) 213426, for tramadol 44 milligrams (mg) and celecoxib 56 mg tablet, which contains a fixed-dose combination of an opioid and a non-steroid anti-inflammatory drug, submitted by Esteve Pharmaceuticals, S.A., for the management of acute pain in adults that is severe enough to require an opioid analgesic and for which alternative treatments are inadequate. They will also discuss NDA 209653, for an extendedrelease oral tablet formulation of oxycodone, submitted by Intellipharmaceutics Corp., with the management of moderate-to-severe pain when a continuous, around-the-clock opioid analgesic is needed for an extended period of time.

II. Congressional Hearings

House of Representatives

• On December 17, 2019, the House Committee on Ways and Means held a markup of Res. 746, a resolution to support and reform the World Trade Organization (WTO); and H.R. 5430, to implement the Agreement between the United States of America, the United Mexican States, and Canada attached as an annex to the protocol replacing the North American Free Trade Agreement. Both pieces of legislation were favorably forwarded to the House floor.

Senate

• On December 17, 2019, the Senate Committee on the Judiciary held a hearing entitled, Tackling the Opioid Crisis: A Whole-of-Government Approach. Witnesses present included: Kemp Chester, Office of National Drug Control Policy; Amanda Liskamm, U.S. Department of Justice; William McDermott, Drug Enforcement Administration; Dr. Neeraj Gandotra, Substance Abuse and Mental Health Services Administration; Dr. Bradley Stein, RAND Corporation; Patrick Kelly, Healthcare Distribution Alliance; Dr. Ronna Hauser, National Community Pharmacists Association; and Sue Thau, Community Anti-Drug Coalitions of America.

III. Reports, Studies, & Analyses

• On December 16, 2019, Kaiser Family Foundation (KFF) published an issue brief entitled, 10 Things to Know about Medicaid Managed Care. This brief describes key themes related to the use of comprehensive, risk-based managed care in the Medicaid program and highlights data and trends related to managed care organization (MCO) enrollment, service carve-ins, spending, MCO parent firms, and state and plan activity related to quality, value-based payments, and the social determinants of health.
• On December 18, 2019, KFF published an issue brief entitled, 10 Key Questions on Public Option Proposals. Several democratic presidential primary candidates and Members of Congress have proposed or endorsed a “public option” to expand health coverage and lower health care costs, giving people the choice between private insurance and a publicly-sponsored plan. The approaches of public option proposals differ from Medicare-for-all in that they expand upon, rather than replace, current sources of coverage (e.g., employer-sponsored plans, the marketplaces, Medicare, and Medicaid). This issue brief presents a high-level view of key questions regarding current public option proposals supported by both presidential candidates and Members of Congress.
• On December 18, 2019, the Government Accountability Office (GAO) published a report entitled, Views on Expanding Medicare Graduate Medical Education Funding to Nurse Practitioners and Physician Assistants. A Senate Committee on Appropriations report included a provision for GAO to examine the potential of making graduate medical education (GME) payments under the Medicare program for nurse practitioners (NPs) and physician assistants (PAs). This report describes stakeholder views on the potential benefits and challenges of expanding the Medicare GME program to include NP and PA graduate training and available information on the estimated costs of NP and PA graduate training.
• On December 19, 2019, the Alston & Bird Health Group released their summary of recent HHS proposals to change the regulations implementing the Physician Self-Referral Law (Stark Law), federal Anti-Kickback Statute (AKS), and Civil Monetary Penalty (CMP) Rules Regarding Beneficiary Inducements. These changes come from a pair of proposed rules issued by the Centers for Medicare & Medicaid Services (CMS) (Stark Law Proposed Rule) and the Office of Inspector General (OIG) (AKS and CMP Proposed Rule). The summary is available here.

IV. Other Health Policy News

• On December 18, 2019, a federal appeals court ruled that the individual mandate in the Affordable Care Act (ACA)—the provision that requires all Americans to buy insurance or pay a penalty on their income tax—is unconstitutional. However, the appeals court stopped short of invalidating the entire ACA. The decision prolongs the court process and ensures that the future of the ACA remains uncertain. Read more about the decision here.
• On December 19, 2019, the U.S. Senate passed two spending bills that would provide $1.4 trillion to fund the U.S. government through the remainder of Fiscal Year 2020 and avoid a shutdown on Saturday. The package consists of two bills called ‘minibuses’ (rather than one omnibus bill): R. 1158, which authorizes national security funds; and H.R. 1865, which authorizes domestic spending. The key health care provisions, including extenders for several expiring programs, are included as part of H.R. 1865. In addition to the extenders, major health care provisions include:
  • Delaying the Medicaid Disproportionate Share Hospital (DSH) allotment reduction to May 22, 2020;
  • Permanently repealing the Cadillac tax, health insurance tax, and medical device tax originally enacted via the ACA;
  • Authorizing $1.5 billion for state opioid response grants;
  • Establishing a process that allows biosimilar or generic drug developers to obtain samples of reference product biologics or drugs for the purposes of developing and seeking approval of a biosimilar or generic drug;
  • Revising the timing of the reporting requirements related to clinical diagnostic laboratory tests established under the Protecting Access to Medicare Act of 2014, which were set to begin on January 1, 2020 but will be delayed for one year; and
  • Raising the age for purchasing tobacco to 21.
• On December 19, 2019, leaders of the House Energy and Commerce Committee and the Senate Health, Education, Labor, and Pensions Committee sent letters to several physician staffing and insurance companies as part of a growing probe into the practice of charging patients for out-of-network services at hospitals and other care facilities, commonly the cause of unexpected medical bills for people with insurance. Read more about the inquiry here.

**Please be advised that the Health Care Week in Review will not go out on December 27 or January 3. The next edition will be going out on January 10.

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