Health Policy Report (11/30)

Capitol Hill Update

Congress will return from the Thanksgiving district work period this week as lawmakers look to make progress on key year-end priorities. In notable news on the government funding front, appropriators struck an agreement on fiscal year (FY) 2021 spending allocations last week — a significant step that brings Congress closer to avoiding a shutdown in December. The 302(b) funding allocations, which have yet to be formally released, will serve as the framework for Chairs Nita Lowey (D-NY) and Richard Shelby (R-AL) as they look to clinch a bipartisan agreement on a $1.4 trillion omnibus spending measure by the December 11 deadline. Lawmakers will still need to navigate several sensitive policy disputes on COVID-19 relief, border wall funding, veterans’ health care costs, and more before they can cross the finish line.

On the floor this week, the House will consider the Judiciary Committee’s landmark cannabis legislation. The Marijuana Opportunity Reinvestment and Expungement (MORE) Act would decriminalize cannabis at the federal level while also expunging nonviolent cannabis convictions from criminal records. Meanwhile, the Senate will resume consideration of pending presidential nominations, starting with Taylor McNeel’s nomination to be a District Judge for the Southern District of Mississippi.

HHS Begins Transition Process with Biden Team

Department of Health and Human Services (HHS) Secretary Alex Azar announced last Tuesday that the health team of the Trump administration had formally begun the transition process with President-elect Joe Biden. Last Monday, General Services Administration head Emily Murphy said the Trump administration would begin the formal transition process, and Deputy Surgeon General Erica Schwartz began communicating with the incoming Biden administration Monday evening. Trump health administration officials will start the process of briefing the incoming administration’s transition team about the work going on at HHS and Operation Warp Speed, and Secretary Azar ensured that the transition process will be “professional, cooperative, and collaborative.”

Additionally, last week, the Biden transition team spoke with National Institute of Allergy and Infectious Diseases Director Anthony Fauci and reported he had been “very, very helpful.” Dr. Fauci has indicated he hopes to stay on as NIAID Director under the Biden administration, which is expected to take a tough stance on the ongoing pandemic, and Center for Disease Control and Prevention (CDC) officials stated last week they hope to resume regular coronavirus briefings under the new administration.

HHS Makes Two Policy Announcements with an Eye to the Future

Last Tuesday, the Department of Health and Human Services (HHS) issued a trio of documents setting policy on rulemaking processes and transparency. First, HHS directed its agencies to ensure that any proposed rules are not inconsistent with and do not overlap with any regulation that has already been proposed. Concurrently, it asked for stakeholder feedback through a request for information (RFI) on any extant HHS regulations that are redundant, inconsistent, or overlapping and how best to resolve these issues. Second, HHS issued a statement of policy (FAQ) calling for greatly expanded transparency associated with rules’ and demonstration projects’ impact analyses, including by requiring the disclosure of assumptions, working papers, models, and other information.

The directive on consistency, overlap, and redundancy requires agencies to not recommend issuing a rule until it also recommends steps to avoid those issues. HHS said that redundancy, overlap, and inconsistency inject uncertainty and increase costs. The accompanying RFI is open for comment through December 21, 2020. The Biden administration is under no obligation to abide by this policy statement or take responses to the RFI into account, though new leadership could consider comments that align with their priorities.

HHS is also not under any obligation to abide by the transparency policy statement; however, rejecting it may set the incoming administration up for criticism. The statement, signed by HHS Secretary Alex Azar, requires that all assumptions, working papers, models, and other information used for an impact analysis be published on the HHS website at the same time as the results of the analyses are disclosed. The agency must also post all data and assumptions necessary for a third party to replicate the agency’s analytic work. While there are exceptions for analyses undertaken for settlement or litigation purposes, there do not appear to be exceptions for proprietary information. This policy will apply to rulemakings or demonstrations proposed after November 30.

HHS Seeking Information on COVID-19 Pandemic Best Practices 

The Department of Health and Human Services (HHS) released a request for information (RFI) last Monday, seeking input from stakeholders on “effective” innovative approaches and best practices in health care in response to COVID-19. The RFI acknowledges that medical providers, medical facilities, academic centers, and health systems have had to rapidly reengineer health care policies and programs in light of the pandemic in order to ensure the preservation of access, safety, quality, and more. HHS explained that the Department is supportive of innovation to preserve a resilient health care system in the face of the pandemic and noted that the information gathered will help inform and guide the HHS response to the ongoing pandemic. Stakeholders may submit information through the RFI Response Portal until midnight Eastern Time on December 24, 2020.

The RFI includes nine pages of questions seeking information on innovations and best practices around both COVID-19 and non-COVID-19 health conditions being implemented by non-HHS health care systems, academic centers, and health care providers. HHS explained that they are employing a broad definition of “health systems” and “health care” in order to capture the full health care continuum, and invited stakeholders to comment on select aspects or on the full continuum of care — including surveillance, screening, prevention, treatment, and/or public health interventions. The RFI clarifies that HHS is specifically interested in novel approaches and best practices associated with data confirming efficacy or effectiveness, with demonstrated improvements in the following measures: patient outcomes, access to health care, safety, quality, or value.

FDA Announces End of Unapproved Drugs Initiative

The Food and Drug Administration (FDA) announced last week (notice, FAQ) that it would end the Unapproved Drugs Initiative (UDI). The UDI was launched in 2006 to encourage manufacturers of older drugs that were introduced to the market prior to the beginning of FDA approval processes to seek such approval. However, the Trump administration cited analysis to support the argument that the UDI has allowed manufacturers to inappropriately increase prices on old drugs or during drug shortages. When a sponsor’s application for approval of an old drug is approved, its competition would leave the market. As FDA would lend an exclusivity period to manufacturers who received approvals for old drugs, manufacturers were able to use monopoly power to charge more for drugs that had been on the market for decades. In addition, FDA says, drugs that received approvals under UDI were likely to experience shortages after FDA took enforcement action post-approval.

The revocation of the guidance that created the UDI largely returns the regulatory environment for unapproved drugs to the pre-2006 guidance status quo. That is, the exclusivity that goes along with seeking and receiving a new drug application for a previously unapproved drug will not be conveyed and FDA will not take action against unapproved drugs that it would have under the UDI. This only applies to new drug applications and abbreviated new drug applications filed after the date of the notice.

It is unclear what impact this policy shift will have. FDA notes that it is not aware of any unapproved prescription drug that is lawfully marketed that would be (1) generally recognized as safe and effective (GRASE) or (2) grandfathered. According to a reporter, the UDI had resulted in the review of around 3,400 drugs and FDA has only 11 left to review. However, FDA issued a request for information along with this notice, calling for information on drugs that were marketed prior to the era of FDA approval or is otherwise considered GRASE.