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

Healthcare Law Blog

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

August 6, 2020

For more information about this blog post, please contact Khaled J. KleleRyan M. MageeLabinot Alexander Berlajolli, 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.

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.

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