From Drug Pricing to Federal Regulations and Litigation, to Startling Statistics on Opioid Overdoses Leading to New Guidance

For more information about this blog post, please contact Khaled J. KleleRyan M. MageeLabinot Alexander BerlajolliBrianna J. Santolli, or Daniel J. Parziale.

Federal Executive Orders on Drug Pricing

On July 24, 2020, President Donald Trump signed four Executive Orders aimed at lowering prescription drug prices. The first order, Executive Order on Access to Affordable Life-Saving Medications, directs federally qualified health centers ("FQHCs") to pass along discounts on insulin and epinephrine received from drug companies to certain low-income Americans. 

The second order, Executive Order on Increasing Drug Importation to Lower Prices for American Patients, allows for individuals to safely import cheaper prescription drugs, authorizes the re-importation of insulin products made in the United States, and creates a pathway for widespread use of personal importation waivers at authorized pharmacies throughout the United States.

The third order, Executive Order on Lowering Prices for Patients by Eliminating Kickbacks to Middlemen, seeks to remove the Anti-Kickback “safe harbor” for health plan sponsors and pharmacy benefit managers (“PBMs”) under Medicare Part-D rebates programs. President Trump characterized the current rebate program as “the functional equivalent of kickbacks” and aims to prohibit contracts between drug manufacturers and PBMs under this Order. The Order cannot go into effect until the Department of Health and Human Services ("HHS") Secretary certifies that it will not result in increased federal spending.

The fourth order, which has not been published, and is probably the most significant, ensures that the United States will pay the lowest price possible for Medicare Part B drugs in economically comparable countries. In other words, if a pharmaceutical company sells a drug in another country at a lower price, then that price will essentially have to be matched in the United States. The order does not take effect until August 24, 2020. 

FDA Issues New Guidance on Prescribing Opioids

On July 23, 2020, the United States Food and Drug Administration (“FDA”) released new guidance encouraging physicians who prescribe opioid painkillers, such as Percocet and OxyContin, to speak with their patients about how to obtain an overdose-reversal drug, Narcan. This new guidance comes after years of increasing overdoses on both legal and illegal opioids leading to a record setting seventy-one thousand (71,000) deaths last year related to opioids. The FDA further recommends that for patients with a higher risk for overdoses, those with a history of opioid addiction, physicians should consider prescribing Narcan or other naloxone-based overdose-reversal drugs together with the opioid prescription.

FDA Releases Draft Guidelines for Cannabis-Derived Drugs

The FDA has released a long-awaited draft of regulatory guidelines to govern the development of cannabis-derived drugs. Amidst an explosion in unregulated hemp-derived products, particularly those containing cannabidiol ("CBD"), the proposed guidelines are intended to cover drugs and treatments containing cannabis oil as well as other compounds found in the cannabis plant. The draft guidance, however, focuses on sources of cannabis for clinical research, information on quality considerations, and recommendations regarding calculating tetrahydrocannabinol ("THC") levels. The guidelines fall short of constructing regulations or rules for cannabis businesses, particularly those already operating in the consumer marketplace for hemp-derived CBD products. The draft guidelines are open for public comment for 60 days, which may bear out whether or not the guidelines may eventually lead to a set of regulations. For the time being, a copy of the draft guidelines can be found here.

Federal Proposed Rules

Changes To the Vaccine Injury Table

85 FR 43794 – The Health Resources and Services Administration ("HRSA") and HHS have proposed a rule to amend the Vaccine Injury Table ("Table") as applied to petitions for compensation under the National Vaccine Injury Compensation Program ("VICP"). The Table currently includes 17 vaccine categories, with 16 categories for specific vaccines, as well as the corresponding illnesses, disabilities, injuries, or conditions covered, and the requisite time period when the first symptom or manifestation of onset or of significant aggravation after the vaccine administration must begin to receive the Table’s legal presumption of causation. The final category of the Table, governing new vaccines recommended by the Centers for Disease Control and Prevention ("CDC"), currently includes two injuries -- Shoulder Injury Related to Vaccine Administration ("SIRVA") and vasovagal syncope – which are proposed for removal under the proposed rule.  Comments are due by January 12, 2021.

Modification to Proposal Regarding the Home Health Prospective Payment System

85 FR 43806 – This correction modifies the public comment period for 85 FR 38408, which proposes updating the home health prospective payment system ("HH PPS") payment rates and wage index for calendar year 2021. 85 FR 38408 also proposes to make permanent the changes to the home health regulations regarding the use of technology in providing services under the Medicare home health benefit associated with the COVID-19 public health crisis. Under this correction, public comment must be received no later than August 24, 2020. The original proposed rule erroneously permitted public comment until August 30, 2020. A copy of this correction can be found here.

DC Circuit Upholds Short Term Limited Duration Health Plan Rule

Recently, the United States Court of Appeals for the D.C. Circuit, by a vote of 2-1, upheld HHS’s short term limited duration insurance ("STLDI") thereby affirming the lower court's summary judgment decision. The majority rejected the plaintiffs’ arguments that the short-term plan rule is contrary to Congress’s intent in adopting the Health Insurance Portability and Accountability Act ("HIPAA") and an unreasonable interpretation in light of the Affordable Care Act ("ACA"). The Court noted that the policy judgment is HHS’s to make and that the government is entitled to deference in defining STLDI and that its interpretation was reasonable. The ruling preserves the status quo, meaning that STLDI can continue to be sold for up to 12 months and renewed or extended for up to three years in states that allow it. The rule has had a significant impact already: enrollment in STLDI products has increased by at least 27 percent since the new rule was finalized. The case is Association for Community Affiliated Plans v. Department of Treasury, No 19-5212 (DC. Cir. 2020).