Health Policy Report (9/28)

September 28, 2020

Capitol Hill Update

Congress is expected to conclude its September legislative work session this week before embarking on a month-long sprint to the finish for the 2020 campaign. In the upper chamber, Senators are poised to take up the bipartisan continuing resolution (CR) (textsummary) tomorrow ahead of Wednesday’s Sept. 30 government funding deadline. The measure — which includes extensions for the surface transportation law, National Flood Insurance Program (NFIP), and expiring health care programs — would punt the funding deadline into the “lame duck” session on Friday, Dec. 11. Meanwhile, the Senate is scheduled to return later in October to begin the confirmation process for Amy Coney Barrett’s nomination to the Supreme Court, with a hearing scheduled in the Senate Judiciary Committee for Oct. 15. President Donald Trump tapped Barrett to replace the late Justice Ruth Bader Ginsburg over the weekend.

In the House, Speaker Nancy Pelosi (D-CA) has directed Committee chairs to begin drafting a targeted pandemic relief package that lawmakers could potentially vote on ahead of the October district work period. In addition to airline and restaurant aid, it is expected that the bill will attempt to reflect a bipartisan compromise on key issues related to unemployment insurance, small business relief, health care, state and local aid, and possibly liability protections. The package, which is expected to total $2.4 trillion, comes amid growing angst from centrist Democrats about adjourning for the final stretch of the 2020 campaign absent additional COVID-19 aid. Despite sentiments from lawmakers on both sides that another round of aid is needed, it remains to be seen whether there will be an appetite from the White House and Senate Republican Conference to hammer out an agreement with Democrats.

President Trump Signs EO on Surprise Billing, Preexisting Conditions

Last Thursday afternoon, President Trump signed an executive order (EO) addressing surprise billing and preexisting conditions in a speech outlining his “America First Healthcare Vision.” The EO, which some commenters panned as a pre-election gimmick with limited policy implications, doubled as his long-promised health care plan to replace the Affordable Care Act (ACA), which contains three pillars: (1) more choice, (2) lower costs, and (3) better care. The president discussed his plans to lower prescription drug prices, increase hospital price transparency, and telehealth and health savings accounts expansions, framing these actions as the first steps to implementing his health care plan. In addition, President Trump announced a plan to send 33 million Medicare beneficiaries a $200 copay assistance card in the coming weeks.

The EO on preexisting conditions states that it is the policy of the United States to protect individuals from insurance discrimination based on preexisting conditions. Although the Trump administration is engaged in a lawsuit to strike down the Affordable Care Act (ACA) — under which preexisting conditions in individual and small group insurance markets are protected — Health and Human Services (HHS) Secretary Alex Azar explained that president Trump would preserve the protections if the Supreme Court rules against the ACA. It is not clear that the President has the authority to require insurers cover preexisting conditions, however, and Sec. Azar told reporters that the action may have to go through Congress.

The other EO gives Congress a deadline of January 1, 2021 to work with HHS to pass legislation on surprise billing and calls on HHS to “investigate regulatory actions” if the timeline is not met. It does not specify what action the administration would take, according to Sec. Azar. The EO on surprise billing is more limited than anticipated, as it had been reported the Trump administration was working on a proposal to ban Medicare providers from using surprise billing practices. The administration pulled back a more sweeping plan after pushback from provider groups and Republican lawmakers, as well as debate from within the administration on the issue. Sec. Azar said that the administration hopes industry groups can work out a solution with Congress, or they will “get what “get what [they] get” from the administration on the issue.

The EO also called on the Secretaries of the Treasury, Labor, and HHS to “maintain and build upon existing actions to expand access to and options for affordable health care.” The EO also calls for a variety of actions including expanding access to generics and biosimilars, accelerating approvals of generics and biosimilars, and facilitating the safe importation of prescription drugs from abroad. It directs the HHS Secretary to update Medicare’s Hospital Compare website to include billing quality details including hospitals’ compliance with the Hospital Price Transparency Final Rule, whether hospitals provide patients with an itemized list of services rendered upon discharge, and how often a hospital pursues action against patients pursuing payment. Lastly, the EO called on the Secretaries of HHS and Veterans affairs to build upon existing actions to improve Veterans’ care, and directs HHS to promote innovations to address conditions such as COVID-19, Alzheimer’s disease, sickle cell disease, and pediatric cancer.

As part of his announcement, President Trump caught many observers by surprise by declaring that the U.S. Government would send out $200 copay assistance cards to 33 million Medicare beneficiaries over the coming weeks. Administration officials have told reporters that funds for the cards — which would total some $6.6 billion — would come from a Section 402 demonstration and that the cost would be offset by savings from President Trump’s “Most Favored Nations” EO, which has not yet been implemented. Section 402 demonstrations (referring to Section 402 of the Social Security Amendments of 1967) authorize HHS to undertake demonstration projects to test Medicare payment and reimbursement models.

HHS, FDA Release Final Rule, Guidance on Drug Importation

Last Thursday, the Department of Health and Human Services (HHS) and Food and Drug Administration (FDA) announced a final rule and guidance (press release, final rule, final guidance) to allow states to import certain prescription drugs from Canada. The actions follow President Trump’s July executive order to lower drug costs through importation, which included directives to the HHS Secretary to complete the rulemaking process on a plan to allow the importation of certain prescription drugs from Canada. FDA Commissioner Stephen Hahn stated that the actions aim to promote choice and competition, while maintaining the high quality and safety Americans expect and deserve. The executive order issued in July: (1) directed the HHS Secretary to allow personal importation of pharmaceuticals — unrestricted by product or country, (2) authorized the re-importation of insulin products if the HHS Secretary finds that it is required for emergency medical care, and (3) directed the HHS Secretary to complete the rulemaking process on a plan to allow the importation of certain prescription drugs from Canada.

The final rule and guidance outline two pathways for importing drugs intended for sale abroad. The final rule implements a provision of federal law that allows FDA-authorized programs to import certain prescription drugs from Canada under specific conditions that aim to ensure the importation poses no additional risk to the public’s health and safety and achieves a significant reduction in cost. The final guidance for industry describes procedures drug manufacturers can follow to facilitate importation of prescription drugs, including biological products, that are FDA-approved, manufactured abroad, authorized for sale in any foreign country, and originally intended for sale in that foreign country.

The final rule includes new language stating that HHS may consider proposals from non-state and tribal entities for importation as long as they can assure safety, greatly expanding the scope of the rule long-term. Previously, FDA maintained that an importation sponsor must be a state, tribal, or territorial government entity that regulates wholesale drug distribution and/or the practice of pharmacy or be a co-sponsor. Additionally, the final rule differs by stating that the provisions are not severable from one another, and if any provisions are invalidated, or unenforceable, the entire rule will not continue to be in effect. In July, the pharmaceutical industry publicly warned the administration that their importation plan is unconstitutional and industry is likely to immediately challenge the rule. While the President declared that the rule would go into effect immediately, the language of the final rule states it will not be effective until 60 days after it is published in the Federal Register.

HHS Proposes Rule to Implement Insulin, Epi-Pen Pricing EO

The Department of Health and Human Services (HHS) issued a proposed rule last Thursday (press release, fact sheet) to implement President Donald Trump’s June 24 executive order (EO) addressing costs of insulin and epinephrine, including Epi-Pens, for certain patients. The notice of proposed rulemaking (NPRM) would create a new requirement for federally qualified health centers (FQHC) to provide insulin and injectable epinephrine to certain patients at or below the price paid for the drug through the 340B Drug Pricing Program, plus a “minimal” administrative fee.

The NPRM will be open for public comment for 30 days after it is published in the Federal Register. According to the Federal Register’s website, it will be published today (Monday, September 28), placing the comment deadline at the end of October. Following public comment, HHS will be required to take comments under consideration and may then opt to finalize the rule. HHS was apparently considering issuing the rule as an interim final rule. However, the legality of such a move may be in question. Interim final rules, which are implemented immediately and have a comment period that begins simultaneously and may result in subsequent changes to the rule, require circumstances in which going through the comment period is not in the interest of the public.

The NPRM states that any provider seeking funding under Section 330(e) of the Public Health Service Act and is a covered entity under the 340B Drug Pricing Program must offer insulin and injectable epinephrine to its patients in order to qualify for the grants. That is, the next time that FQHCs seek Section 330 funding, they must have implemented this policy. Section 330 grants are awarded annually. 340B prices would be available to FQHC patients with incomes at or below 350 percent of the federal poverty level and either (1) have insurance with a high cost-sharing requirement for insulin or injectable epinephrine, (2) a high unmet deductible, or (3) have no health insurance. Patients must receive services from health centers other than just the dispensing of drugs in order to qualify for 340B pricing under the rule. Additionally, the minimal administration fee would be expected to include any dispensing fee, counseling costs, or other charge associated with the patient receiving the medication. HHS states that such a fee should not create a barrier to low-income patients accessing covered drugs and that health centers should make “every reasonable effort” to keep fees as low as possible.

FDA Reportedly Planning For Tougher COVID-19 Vaccine Standards

The Food and Drug Administration is reportedly planning to release stricter emergency use authorization criteria for COVID-19 vaccine candidates. Under the new guidance, the FDA would ask manufacturers seeking an emergency authorization to follow participants in late-stage clinical trials for a median of at least two months, starting after they receive a second vaccine shot. Additionally, the FDA is looking for at least five severe cases of COVID-19 in the placebo group for each trial, as well as some cases of the disease in older individuals. Although the guidance is still being reviewed by the Office of Management and Budget, elements of it have already been shared with vaccine candidate sponsors.

The FDA plans to release the guidance in an effort to boost transparency and public trust in the health agency, and tougher criteria could make it exceedingly more difficult for a vaccine to be approved before election day. Public health experts have stressed that the President’s repeated insistence that a vaccine would be approved before November 3, as well as the administration’s interference in health agency activities, may cause Americans to reject a COVID-19 vaccine for fear it was rushed and unsafe. President Trump asserted last Wednesday that the FDA’s reported efforts to develop stricter criteria seems like a political move, and he said the White House will review any criteria the agency develops. He clarified that the White House may or may not approve the guidance, adding that there was no reason to further delay vaccine approval and that he had “complete trust” in the companies developing vaccines.

GAO Report Finds Supply Shortages Harming COVID-19 Response

The Government Accountability Office (GAO) issued a report last Monday finding that shortages of supplies and equipment are harming the country’s COVID-19 response almost six months into the pandemic. The government watchdog reported that states are still facing shortages of personal protective equipment (PPE) and testing supplies due to high global demand and limited domestic manufacturing capability, despite “numerous, significant efforts” taken by the federal government. The GAO attributed delays in testing results to the testing supply shortages, as well as the “multiple consequences” of the delays such as the inability to conduct timely contact tracing and exacerbated outbreaks. State officials reported to the GAO that they still face issues around supply requests from the federal government, leading to difficulty in future planning.

The GAO recommended the Department of Health and Human Services (HHS) and Federal Emergency Management Agency (FEMA) outline steps the federal government will take to mitigate supply chain shortages and communicate those plans to stakeholders, including state governments. They also suggested that HHS and FEMA assist states in tracking the status of supply requests from the federal government so they can plan for their needs for the remainder of the pandemic. The GAO expressed concern that HHS had transitioned to full responsibility for supply chain issues between July and September, stating that “this amount of responsibility at the scale the response necessitates” may require more support throughout the pandemic. HHS objected to these recommendations and called the report “incorrect,” although it did agree with a recommendation that the Centers for Disease Control and Prevention (CDC) collect more robust data about COVID-19 cases and deaths by race and ethnicity.