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Evolution & Revolution: Device Policy Priorities at FDA in 2019

December 5, 2019 | Blog | By Joanne Hawana, Aaron Josephson, Benjamin Zegarelli

This post is the first in a series of three in which we recap the Food and Drug Administration’s somewhat difficult year, having spent the majority of it without a permanent Commissioner and facing a slew of political and practical challenges. Today our topic is “medical devices” writ large, which is a product class that is becoming more complex by the day as it grows to encompass software, diagnostics, laboratory tests, and new medical technologies that resemble nothing that Congress had in mind when it first gave FDA authority to regulate medical devices in 1976. In the coming days, we’ll also take a broad look at FDA’s year from the standpoint of therapeutic medical products, including drugs and biologics, as well as the more commonly used category of consumer products.
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The Health, Education, Labor and Pensions (HELP) Committee is set to vote on Dr. Stephen Hahn, the Trump administration’s nominee to head the Food and Drug Administration (FDA), on December 3, 2019. Hahn faced a flurry of questions at the confirmation hearing before the Senate Health Committee on Wednesday, November 20, 2019, most of which spoke to the youth vaping crisis with little emphasis on other hot topics such as prescription drug shortages or drug pricing. Despite the barrage of questions, many of his responses were non-specific in nature and avoided committing to any set platform. Instead, Hahn focused on his pledge as a doctor to put patient care first and rely on science and data as a basis for decision-making.
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We have previously blogged about the Food and Drug Administration’s year of listening and information-gathering related to products containing cannabis or cannabis-derived compounds since the 2018 Farm Bill removed “hemp” from the federal Controlled Substances Act. Among other things, the Agency issued a call for scientific information on a variety of topics identified in this April 3, 2019 notice; opened a public docket to receive written comments in response to those questions (docket no. FDA-2019-N-1482); and convened a public hearing in May 2019 to hear from stakeholders directly. Our summary of that May 31st hearing, which also provides an overview of the legal and regulatory landscape post-2018 Farm Bill, is available here. This intensive period of evaluation was led by an internal working group charged with making recommendations for the open scientific, technical, and policy questions created by the new legal status of hemp.
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As we previously reported, the Department of Health & Human Services (HHS) recently issued two proposed rules intended to reduce the regulatory burden associated with the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). Although the rules’ main focus is on value-based arrangements, the proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) also includes a number of provider-friendly changes and clarifications to the Stark Law. As discussed below, CMS is proposing several changes to key Stark Law requirements as well as modifications to existing Stark Law exceptions.
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CMS Finalizes Changes Expanding the Scope of the Open Payments Program

November 18, 2019 | Blog | By Brian Dunphy, Rachel Yount

On November 15, 2019, the Centers for Medicare & Medicaid Services ("CMS") finalized changes to the Open Payments Program as part of the CY 2020 Physician Fee Schedule Final Rule. Perhaps most importantly, CMS broadened the list of Covered Recipients. Starting for data collection for CY 2021, manufacturers will be required to track and report payments and transfers of value made to physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, and certified nurse midwives. CMS also added three new nature of payment categories – debt forgiveness, long-term medical supply or device loan, and acquisitions. CMS also consolidated the two payment categories for continuing education programs – accredited/certified and unaccredited/non-certified – into one payment category for all continuing education programs. Lastly, in a move expected to impose a substantial burden on medical device manufacturers, CMS added a reporting requirement for the ‘device identifier’ component of the unique device identifier for devices and medical supplies.
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Viewpoint General
The Centers for Medicare and Medicaid Services (CMS) recently published the 2020 Hospital Outpatient Prospective Payment System (OPPS) rule, which finalizes a proposed reduction in Medicare Part B reimbursement for certain drugs provided by hospitals to outpatient beneficiaries that are acquired through the 340B drug discount program. Through the final rule, CMS purports to continue Medicare reimbursement cuts for 340B drugs first implemented in 2018, despite the fact that those cuts (and the 2019 OPPS rule continuing those cuts) are the subject of ongoing litigation in which the cuts were determined to be unlawful. That ruling, and a Court-imposed stay of the cuts, are the subject of a just-argued appeal.  For a detailed walk-through of the litigation up to this point, please see our prior blog post.
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Viewpoint General
This post is the fourth installment of our blog series on significant, proposed changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law) recently announced by the Department of Health & Human Services (HHS).  The proposed rule issued by the Centers for Medicare & Medicaid Services (CMS) offers new and revised definitions on key Stark Law terms, some of which CMS has previously neglected to define or provide significant guidance.  In addition, CMS proposes a new Stark Law exception for limited remuneration to a physician, which offers health care entities more flexibility for unwritten, short-term compensation arrangements with physicians.
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Health Care Forecast - Massachusetts Legislature

November 12, 2019 | Blog | By Caitlin Beresin, Kaitlyn Sprague, Taylor Shepherd

As the Legislature approaches the Holiday recess, health care costs and access continue to be at the forefront of the agenda. The Baker Administration released the VALUE Act on October 18th and the Senate filed the PACT Act on November 7th. 
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FDA Issues Drug Shortage Report Identifying Root Causes and Potential Solutions

November 7, 2019 | Blog | By Michelle Caton, Elizabeth Conti

Despite congressional attention, Food and Drug Administration (FDA) action, public and private sector efforts, and ongoing media coverage, drug shortages remain a significant public health crisis in the United States. In response to that crisis (and at Congress’s urging), the FDA formed the interagency Drug Shortages Task Force (Task Force) to study the issue. FDA has now released the report resulting from the Task Force’s activities: “Drug Shortages: Root Causes and Potential Solutions.” The report, issued on October 29, 2019, concludes that drug shortages are primarily the consequence of economic factors driven by private and public business practices. Those practices, according to the report, disrupt the supply chain availability of marketed pharmaceuticals. The report offers recommendations to provide a framework for stakeholders to address the underlying economic factors leading to drug shortages.
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5 Key Reasons to Ensure Ongoing Compliance with State Distributor Licensing Requirements

October 31, 2019 | Blog | By Kristen Marotta, Joanne Hawana

Manufacturers and other drug developers should be cognizant of the fact that proper licensing is required in order to distribute prescription drugs. The process for obtaining a license to distribute often requires an extensive application and review by the resident state. Failure to secure appropriate licensing before shipping these kinds of products in interstate commerce can lead to a variety of unwanted scrutiny and negative effects. For instance, the Washington Department of Health has recently been investigating a complaint alleging that Sun Pharmaceuticals distributed medicine samples without the proper license.
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To anyone who has been following government enforcement and private litigation trends related to the over-the-counter (OTC) homeopathic drug industry over the past several years, the Food and Drug Administration’s (FDA) announcement on October 24, 2019 likely came as no surprise. But to stakeholders in this industry, it was certainly unwelcome news and may portend a coming wave of unapproved drug enforcement actions by the FDA.
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This post is the third installment of our blog series on recent proposed rules from the Department of Health & Human Services (HHS) that, if finalized, would implement major changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). Below is an in-depth summary of the Office of Inspector General’s (OIG) proposed modifications to the safe harbors for personal services and management contracts, which includes a proposed new provision protecting outcomes-based payments. We also cover the OIG’s proposed modifications to the warranties safe harbor.
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HHS Proposes Sweeping Changes to AKS and Stark Law, Part 2: Cybersecurity Technology and Electronic Health Records

October 21, 2019 | Blog | By Karen Lovitch, Dianne Bourque, Theresa Carnegie, Rachel Yount

On October 17, 2019, the Department of Health & Human Services published two proposed rules that, if finalized, would implement significant changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). This post is the latest installment in our blog series covering these proposed rules.
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HHS Proposes Sweeping Changes to AKS and Stark Law, Part 1: Value-Based Arrangements

October 15, 2019 | Blog | By Theresa Carnegie, Matt Mora, Michelle Caton

As we reported last week, the Department of Health & Human Services (HHS) recently issued two proposed rules (one by the Office of Inspector General (OIG) and one by the Centers for Medicare & Medicaid Services (CMS)) that, if finalized, would implement sweeping changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (commonly known as the Stark Law). The proposed rules seek to reduce barriers to value-based contracting in several ways, including: (1) creating new safe harbors to the AKS; (2) adding new exceptions to the Stark Law; and (3) retooling existing AKS safe harbors, along with the Civil Monetary Penalties rules regarding beneficiary inducements. Below are key takeaways from both the OIG’s and the CMS’s proposed rules as they relate to the new value-based arrangements safe harbors and Stark Law exceptions.
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Viewpoint
Last week, the New York State Department of Financial Services released a proposed amendment to the regulations promulgated under the State’s Emergency Medical Services and Surprise Bills law (the SBL), which adds additional notice requirements for insurers and out of network (OON) providers.
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HHS Proposes Sweeping Changes to Anti-Kickback Statute and Stark Law

October 10, 2019 | Blog | By Karen Lovitch, Theresa Carnegie, Rachel Yount

On October 9, 2019, the Department of Health & Human Services (HHS) announced significant changes to the Anti-Kickback Statute (AKS) and the Physician Self-Referral Law (known as the Stark Law) through proposed rules issued by the Office of Inspector General (OIG) and the Centers for Medicare & Medicaid Services (CMS). The proposed rules are part of HHS’s Regulatory Sprint to Coordinated Care, which aims to promote value-based care and ease regulatory burden on health care providers, particularly with respect to the AKS and the Stark Law.
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On September 26, 2019, FDA released a six revised digital health guidances. The primary objective of these revisions was to bring the guidances into alignment with the software function exemptions described in Section 3060 of the 21st Century Cures Act (the “Cures Act”). The medical device community has anticipated these changes since Congress passed the Cures Act almost three years ago in December 2016.
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As promised, the Department of Health and Human Services (HHS) filed a brief in the United States Court of Appeals for the District of Columbia Circuit challenging the district court’s holding that the Secretary lacked the authority to compel drug manufacturers from disclosing drug prices in direct-to-consumers television advertisements (DTC rule). On September 23, 2019, HHS filed its appeal in the D.C. Circuit against plaintiffs Merck & Co., Eli Lilly and Co., and Amgen Inc. The brief argues that the district court erred in holding that HHS lacks the statutory authority through the Social Security Act (SSA) to force the DTC rule upon drug manufacturers because they are not direct participants in the Medicare and Medicaid programs.
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ML Strategies Health Care Preview: Government Shutdown Looming?

September 27, 2019 | Blog | By Eli Greenspan

Congress has just days to pass a continuing resolution to avoid a government shutdown and extend a number of key public health programs. Meanwhile, policymakers are holding hearings and considering a series of drug pricing proposals around negotiation within Medicare and other policies. We cover this and more in this week's preview, which you can find by clicking here.
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Viewpoint
The Court of Appeals for the Third Circuit recently weighed in on a relator’s right to a hearing where the government moves to dismiss a declined qui tam case, holding that the False Claims Act (FCA) does not guarantee a relator an in-person hearing before their declined FCA cases may be dismissed.
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