Life Science Compliance Update

April 09, 2018

Senate Holds Hearing on 340B Drug Pricing Program


On Thursday, March 15, 2018, the United States Senate Committee on Health, Education, Labor & Pensions held a hearing entitled, “Perspectives on the 340B Drug Pricing Program,” with testimony provided by Bruce Siegel, MD, MPH, Lori M. Reilly, Sue Veer, MBA, and Joseph M. Hill III, MA. Each individual brought a different perspective to the table and valuable insight to the issue.

Bruce Seigel, President and CEO of America’s Essential Hospitals

Dr. Seigel started off his testimony by reminding all present that the 340B program was initially created to “protect hospitals of the safety net from the existential threat of unsustainable drug costs.” According to his testimony, “In the 1992 House report that accompanied legislation establishing the 340B program, they wrote, ‘In giving these ‘covered entities’ access to price reductions the Committee intends to enable these entities to stretch scarce Federal resources as far as possible, reaching more eligible patients and providing more comprehensive services.’”

Dr. Seigel then went through to explain the savings 340B programs help to provide, and the better care and outcomes the additional services provide. He encouraged Congress to review the legislative intent and ensure the programs are operating as intended.

Lori M. Reilly, Executive Vice President, Policy Research & Membership, PhRMA

Ms. Reilly expressed PhRMA’s support for the 340B program and noted its importance in supporting the care provided by recipients of Health Resources and Services Administration (HRSA) grants. Ms. Reilly also walked back in time to when the program was started as a way to assist “federal grantees, like [Community Health Centers], and true safety-net hospitals serving large numbers of uninsured or otherwise vulnerable patients.” She noted the distinction between grantees and hospitals in their reporting requirements and that the lack of program standards for use of 340B discounts by disproportionate share hospitals (DSHs) combined with the growth of the program driven by the hospitals, has transformed the 340B program. 

Ms. Reilly stated PhRMA’s belief that the “large discounts biopharmaceutical manufacturers provide under the 340B program should serve a targeted purpose” and help those who need it the most. 

Sue Veer, MBA, President and CEO, Carolina Health Centers/NACHC Consultation

Ms. Veer provided insight as to how health centers and their unique characteristics help provide patients with access to affordable pharmaceuticals. She also discussed the way many health centers use the program, and the resulting savings, to expand access to essential primary care services and drive improved clinical outcomes.

She spoke about how health centers are “good stewards” of the 340B program by ensuring “vulnerable patients can  afford their medications; reinvest[ing] 340B savings toward purposes that advance health centers’ safety net mission of expanding access for underserved populations; and adher[ing] to [the] extensive reporting and oversight requirements to demonstrate that health centers are increasing access to affordable primary health care.”

She also provided a few examples of how 340B savings increase access to high-quality, but affordable, care for their patients, including: implementing  delivery systems and mail order pharmacy programs; establishing multidisciplinary Care Transition Teams for  patients at high risk for repeat hospital admissions; and covering the cost of uncompensated care provided to patients in communities with high rates of poverty for which the health center’s Section 330 grant funds are inadequate.

Joseph M. Hill, III, MA, Director of Government Relations, ASHP

Mr. Hill spoke on behalf of the American Society of Health-System Pharmacists (ASHP), offering the organization’s perspective on the 340B drug pricing program. He noted that the group supports the program as many of its members have seen “firsthand the benefits of the program to the patients they serve.”

He went on to note that “when federal budgets are stretched thin, the federal 340B program helps maximize federal resources while providing access to lifesaving medications.”


Given the widespread support for the 340B program, it is likely that it is here to stay. What remains to be seen, however, is whether Congress will work to reign in the out-of-control side of it and modify it back on a sustainable path like was initially intended.

April 05, 2018

House of Representatives Holds Two-Day Hearing on Opioids


Recently the Committee on Energy and Commerce Subcommittee on Health held a hearing entitled, “Combating the Opioid Crisis: Prevention and Public Health Solutions.” During the hearing, representatives and witnesses alike discussed a total of twenty-five bills that have been introduced or drafted and address the opioid crisis.

The Subcommittee on Health heard from four different panels of witnesses, including federal agency heads, recovering addicts, and opioid rehabilitation medical experts.

Opening Statements

During opening statements, Committee Chairman Greg Walden praised the President’s plans to address the opioid crisis and said that Congress is “ready to work in tandem” with the administration to come up with additional solutions. Referencing the importance of the hearing, Rep. Walden said that the proposed legislation would help strengthen the FDA’s ability to understand the epidemic. Rep. Walden specifically referenced The INFO Act (H.R. 4284), and H.R. 3545, as effective bills to help combat the opioid crisis.

Committee Ranking Member Rep. Frank Pallone discussed his support for the Addiction Treatment Access Improvement Act of 2017 (H.R. 3692) which revises the qualifications for physicians to “administer, dispense, or prescribe narcotic drugs for maintenance or detoxification treatment.”

Health Subcommittee Chairman Michael Burgess stated that legislation like the Comprehensive Addiction and Recovery Act (CARA) and 21st Century Cures Act have been impactful, but additional legislation is needed. He expressed concern with how little of the 21st Century Cures Act funding has been used by the states to date. He also highlighted H.R. 4284 and the FDA packaging and disposal discussion draft as two important pieces of legislation.

Subcommittee Ranking Member Gene Green spoke to the FDA Misuse/Abuse discussion draft legislation he authored which would clarify the FDA’s authority to consider tendencies for misuse and abuse as part of the drug approval and assessment process for opioids. He also noted the importance for expanding healthcare access to patients.

Testimony and Discussion

With the four panels and two days of hearings, the Committee had wide-ranging discussions on the bills, sometimes vigorously debating and other times listening intently to the witnesses before them.

Members of the Committee debated the merits of the Overdose Prevention and Patient Safety Act (H.R. 3545), which would address concerns with existing rules governing the privacy of patient medical records related to substance abuse treatment. Democrats claimed the bill would increase instances of discrimination against patients with substance use disorders (SUDs) while Republicans argued it would encourage coordinated and exemplary care for patients seeking treatment.  

More specifically, Representative Walden acknowledged that while this issue is “deeply sensitive” it is important to ensure that patients receiving these services get the same quality of treatment that patients with other chronic diseases get by protecting patient privacy and reducing stigma towards those with SUDs. Representative Pallone on the other hand, stated his belief that the legislation could potentially act as a barrier to patients seeking and receiving treatment. He further stated that Congress should instead focus efforts on eliminating stigma around drug use and pass laws to protect patients with a history of opioid abuse from discrimination.

The Advancing Cutting Edge (ACE) Research Act (H.R. 5002), authored by Debbie Dingell and Fred Upton, would provide authority to fast track research on new non- addictive pain treatments. FDA Commissioner Scott Gottlieb said that the FDA is currently gathering data on pain medication with abuse-deterrent capabilities that will soon be released to the public. Mr. Gottlieb also told the Committee that the FDA currently has the legal authority to address the side effects of illicit drug use but having the authority to explore and expand risk assessment capabilities to drugs outside of the controlled substance category would be helpful to the public. Such authority is proposed in the discussion draft of the FDA Accelerated Approval and Breakthrough Therapy Status Act.

Members agreed on a variety of legislative topics, including proper disposal of unused opioids and an increase in the Food and Drug Administration’s (FDA) authority to seize and destroy packages carrying suspicious and unlabeled pills in international mail facilities (IMFs). Questions did arise, however, regarding legislation that would allow the FDA to consider the risks of misuse and abuse when approving a new drug and to apply the authority for the agency to expedite the approval process for pain and addiction treatments.


This hearing was one of several opioid-related hearings and developments that have occurred recently and Congress currently seems to be working in a bipartisan manner to develop thoughtful legislative packages should they opt to take up new opioid-related legislation in advance of the 2018 midterm elections.

The Subcommittee is preparing for a third hearing about the opioid crisis in April, which will cover Medicare, Medicaid and payer issues and plans. Committee Chairman Walden has said he wants the Committee to complete consideration of bills to address the opioid crisis by Memorial Day. On the Senate side, the Health, Education, Labor and Pensions (HELP) Committee is continuing to review several proposals before finalizing plans to convene a hearing sometime this spring.

March 30, 2018

House Subcommittee on Health Holds Hearing on MACRA


On March 21, the House Ways and Means Subcommittee on Health held a hearing focused on the implementation of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The event was mostly a question and answer session along with introductory remarks from invited panel members. This included Demetrios Kouzoukas, the Principal Deputy Administrator for CMS, and Dr. Kate Goodrich, Chief Medical Officer at CMS.


The discussion was wide ranging and touched on a number of issues. Regarding bundled payments, Rep. Levin raised concerns about CMS moving away from value based care after the agency scaled back CJR bundled payments. Rep. Johnson asked if social security numbers from Medicare cards are on track, which CMS confirmed is the case. Rep. Thompson asked when the CMS vision of interoperability will be achieved, and CMS noted it is still working on the issue. The agency highlighted its work on reducing regulatory burden as being helpful in this particular area.

On the topic of administrative burdens, Rep. Smith offered general comments and CMS described the problem as very real and not an abstract concept. Physicians are buried in their electronic records and it takes away from patient care. CMS said they have acted on administrative burden issues in prior rules such as raising the low volume threshold for MIPS and creating virtual groups.

Regarding APMs, Rep. Jenkins encouraged CMS to allow more one sided risk models to share in APM incentive payments, although CMS has been resistant on this issue in the past. Rep. Chu described having the first all-inclusive ACO payment model in her district. She highlighted a secondary payer problem in the model and asked for CMS to ensure that payment errors do not occur in the future. Rep. Kind asked about CMS goals for APM participation. There was a 50% goal under the former administration. CMS was non-committal, however, about a specific number, yet the agency still wants to move toward higher value based care percentages.

Rep. Marchant continued by raising the issue of Stark laws, highlighting the need to reform the laws in light of value based care. Rep. Kind also described the need to address the rising costs of medication and CMS said it has put out some ideas and will be working to address the issue. Rep. Paulsen brought up risk issues in MACRA and specialty specific measures. CMS said MACRA gives the agency resources to develop quality measures and said they recently announced opportunities in this area to encourage the development of these types of measures. The agency also highlighted its “patients over paperwork” initiative. Additionally, regarding small practices in APMs, CMS said it is working to develop many APMs and they realized there cannot be a one-size-fits-all approach. In the future, there will be a way to count private/MA APM participation under MACRA.


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