Life Science Compliance Update

May 08, 2017

The ACHA Passes the House

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On Thursday, May 5, 2017, House Republicans finally got what they have been asking for, and campaigning on, for several years. They held a successful floor vote on the American Health Care Act (AHCA), approving the bill by a narrow 217-213.

Following the vote, President Donald Trump hosted Republicans at the White House for a celebratory press conference, saying that he was “so confident” that the House version would be taken up and passed in the Senate. Senate Republicans quickly made it clear that they would not use the House-passed AHCA as a starting point, and would instead create their own package that could then be reconciled with what was passed in the House. This next step could take weeks, or even months, as Senate Republicans navigate their own ideological divides and ensure that any legislation conforms with budget reconciliation rules.

The Bill

While many are happy that the bill repealed Obamacare to a certain extent, others are concerned that the bill will hurt healthcare for many. The bill will likely lower premiums for younger, healthier, people and raise premiums for older and less healthy payors. Young people can still remain on their parents’ health insurance until age 26. The bill also does away with the individual mandate, meaning no one will be forced to pay a penalty if they go without health insurance for more than a short period of time, but does provide for different incentives for people to maintain their coverage.

A quick google search can provide readers with pros and cons that align with individual political beliefs, so we will not delve into those much here. To get a jump start on talking points, however, an article from Money on the bill can be found here.

Next Step: To the Senate!

Both moderate and conservative senators have started to discuss their vision for the healthcare bill, with Senator Shelley Moore Capito of West Virginia saying she “absolutely” had concerns with the AHCA’s Medicaid cuts and Senator Rand Paul of Kentucky saying that the conservative changes did make the legislation “less bad,” but that it still has “fundamental problems.” With a much smaller majority than in the House, Senate Republicans can only afford two defections and still advance legislation.

Industry Reaction

Many Republicans acknowledge that the bill is not perfect, and most – if not all Democrats – have come out against the bill and have started campaigns against it. A variety of medical associations and organizations have been closely tracking this bill and below is a sampling of some statements that have been published by various groups.

The Arthritis Foundation released a statement, noting,

The health reform replacement bill passed today threatens coverage and affordability of care for so many of our patients. The Arthritis Foundation, one of the largest patient advocacy organizations, is concerned that the legislation will not provide adequate protections to people with pre-existing conditions, could limit access to Essential Health Benefits and cut benefits for Medicaid. Our patients are already faced with managing a chronic disease and it’s unfair that they may also be faced with paying more for insurance with fewer guaranteed benefits including out-of-pocket medication protections. People with arthritis and other chronic conditions need coverage the most and regular access to affordable care, so they can stay healthy.

Our goal is to continue our work with Congress to ensure health reform replacement legislation provides a more seamless and transparent health care system, insurance protocols that are not overly burdensome and allow patients to remain stable on a drug, policies that ensure out-of-pocket costs for prescription drugs are more reasonable and an emphasis on outcomes-based contracting and value-based insurance design.

The American Medical Association released a statement, clearly unhappy with the passage of the bill:

The bill passed by the House today will result in millions of Americans losing access to quality, affordable health insurance and those with pre-existing health conditions face the possibility of going back to the time when insurers could charge them premiums that made access to coverage out of the question. Action is needed, however, to improve the current health care insurance system. The AMA urges the Senate and the Administration to work with physician, patient, hospital and other provider groups to craft bipartisan solutions so all American families can access affordable and meaningful coverage, while preserving the safety net for vulnerable populations.

Seema Verma, Centers for Medicare & Medicaid Services (CMS) Administrator, released a statement on its passage, stating,

Today is the first of what I am confident will be many historic days ahead as we move toward patient–centered healthcare instead of government–centered healthcare.

I have worked in the field of Medicaid for 20 years and have heard from many mothers like myself who have shared their struggles and their hopes for a more affordable, more sustainable healthcare system. It is important that our most vulnerable citizens, the aged, the infirm, the blind and the disabled have more choices, greater access and peace of mind when it comes to their healthcare.

The bill that was passed in the House is a great first step achieving this goal.

April 12, 2017

AHCA Failed…Now What?

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Moments before a scheduled vote on the bill, Republican House leaders announced that they were pulling the American Health Care Act (AHCA) from consideration. Such a move, made because of a shortage of votes needed to pass the bill, has thrown the political arena into disarray and uncertainty. As of right now, it looks like President Donald Trump is going to leave the Affordable Care Act (ACA) in place and move onto other priorities of his, such as tax reform. Even still, there are other options out there with respect to health care and what may happen next.

The Administration’s authority to make changes in the health arena is extremely broad. It includes: executive orders, rules, or other executive guidance based on the extensive body of statutes governing federal health care programs; pre-ACA demonstration and waiver authority; and demonstration authority given to the Center for Medicare & Medicaid Innovation (CMMI) under the ACA. The Trump Administration also has broad opportunities to aggressively interpret these authorities with minimal chance that its actions will be overridden by Congress.

Further, courts review executive actions with deference, thereby limiting actions subject to judicial modification.

Congress

For example, with respect to legislative possibilities, it is possible that key Senate leaders, such as Senator Lamar Alexander of Tennessee, could take a role in brokering an agreement that could pass the Senate with 60 votes. Under such a scenario, major changes would be likely to the House approach on Medicaid expansion, tax credits, and insurance reforms. Moreover, per-capita caps would be unlikely to pass bipartisan muster. Such efforts could be characterized as an attempt to “fix” the ACA, or could end up being a rebranding exercise altogether – even something to the tune of “Trumpcare,” perhaps. But significant challenges would exist in reconciling such a package with Republican promises to “repeal and replace” the ACA. It is also possible that Republicans could seek to pass a “clean” repeal of the ACA – something they have done before, which was vetoed by President Obama in Jan. 2016 – without any agreement on how to replace it.

Administrative Agencies

While the ACA remains in place, it is likely that Health and Human Services (HHS) Secretary Tom Price will look to his regulatory toolbox to provide “relief” from ACA regulations and reverse Obama administration regulations in general.

Additionally, the Trump administration has indicated they will seek to facilitate expedited approval of Medicaid waiver applications to reshape the program for the poor and disabled. Specifically, Secretary Price and CMS Administrator Seema Verma have suggested that states may consider policies imposing work requirements for able-bodies adults, “Health Savings Account-like features,” and various cost-sharing policies common in commercial insurance, like premium payments and emergency room copayments.

Executive Branch

Within hours of his inauguration, President Trump signed an Executive Order (EO) signaling his Administration’s policy of seeking “prompt repeal” of the ACA through wide-ranging executive action. The EO lays the groundwork for federal agencies’ efforts to take intermediate regulatory steps to unravel parts of the ACA, although no specific policies are implemented via the order itself.

The order says HHS and other ACA implementing agencies, such as the Internal Revenue Service (IRS) and Department of Labor (DOL), shall “exercise all authority and discretion available to them to waive, defer, grant exemptions from, or delay the implementation of any provision or requirement” of the ACA to the maximum extent permitted by law.”

The order identifies burdens on states and taxes and penalties on individuals, insurers, providers, or drug and device manufacturers and encourages flexibility for states as well as action to promote a “free and open market in interstate commerce,” including for health insurance.

January 27, 2017

Politico Healthcare Briefing: What’s Next for Drug Costs?

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Late last year, Politico Pro’s Health Care Team, along with CVS Health, held a conversation on the future of prescription drug costs, and how to reduce healthcare spending under a new administration. The briefing featured a panel of health care industry experts: Peter Bach, MD, Director of Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center; Jenny Bryant, Senior Vice President of Policy and Research at PhRMA; Ceci Connolly, President and CEO at the Alliance of Community Health Plans; and Chip Davis, President and CEO of the Generic Pharmaceutical Association (GPhA).

The panel discussion focused on the report, “Tackling High Drug Costs in the Trump Era,” and was followed by a discussion with Representative Jan. Schakowsky, concerning efforts on Capitol Hill to reform health care spending.

Panel Discussion

Dr. Bach argued that there was a “fundamental disconnect” between efforts to reduce costs of coverage and bring top treatments to patients. He expressed support for drug price negotiations under the Affordable Care Act, stating that such efforts have saved taxpayers over $10 billion. He also warned that if high-deductible health plans remain popular, tools will need to be developed to indicate to physicians when their prescribing patterns are negatively affecting their patients and have open conversations about the affordability of the drugs they are prescribing.

Ms. Bryant expressed hope that lawmakers can work together to reach an agreement to “move forward to advance pro-market and pro-science solutions.” She stated that drugs have the potential to avert more health care spending for a patient in the future than they cost in the present, and challenged the idea that rising pharmaceutical costs are to blame for increased health care spending. Ms. Bryant challenged the premise that the repeal of the Affordable Care Act (ACA) would be a “looming problem,” instead stating that price negotiations for pharmaceuticals under government programs would not be exclusive to the ACA. She noted that cost-sharing was actually counter-productive for the health care industry, and that the perceived value of a drug is extraordinarily personal, and it is nearly impossible to determine the “average value” for pharmaceuticals.

Ms. Connolly discussed her belief that the drug pricing debate is quickly fading as the new administration approaches, noting that many of President-Elect Trump’s larger ideas are taking focus away from the debate, and that the core of the drug pricing issue (the lack of transparency) should be more thoroughly addressed. Ms. Connolly declared that the debate no longer focuses on specialty drugs, but now also includes drugs for common ailments. She discussed reauthorization of the prescription drug user fee law as a potential vehicle to address pricing transparency, but that event transparency may not be enough to reign in health care spending. She requested that lawmakers focus on mandating transparency so that patients can make more informed decisions with their physicians about which drugs they are prescribed, and encourage affordable treatment options.

Mr. Davis cautioned lawmakers and others that a policy issue as complex as the drug pricing debate cannot be solved with a broad approach, and that by allowing complete transparency of the pharmaceutical industry could wind up forcing competition out of the industry. He encouraged lawmakers to include all aspects of the market in discussions surrounding transparency, and to not discount the opinions of the drug manufacturing industry.

Discussion with Representative Schakowsky

Representative Schakowsky expressed her belief that lawmakers should hold President-Elect Trump to his promises regarding health care and work together to pass legislation that discourages price increases and promotes transparency in drug pricing. She reminded attendees that Trump favored allowing Medicare to negotiate drugs and the re-importation of prescription drugs as two methods to combat rising drug prices and spending. She mentioned her legislation, the FAIR Drug Pricing Act, drafted with Senator Tammy Baldwin, which attempts to shed light on how drug prices are initially decided and influenced, and where profits are being spent.

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