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MLS Weekly Preview: Congress Keeping its Focus on Drug Costs

April 8, 2019 | Blog | By Eli Greenspan, Alexander Hecht

This week, Congress will continue to look at lowering health costs. The House has been focused on both drug costs and overall health care costs, advancing packages to strengthen the individual market in addition to a series of bipartisan drug pricing bills. We cover this and more in this week's preview.
Viewpoint General
On June 28, 2018, California passed the California Consumer Privacy Act (CCPA) and then further amended it on September 23, 2018. CCPA breaks new state law privacy ground, and this post addresses some of the confusion surrounding the exemptions for health information.
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CMS’s New Part D Policies Address the Opioid Epidemic

April 3, 2019 | Blog | By Daryl Berke

In recent months, we’ve highlighted several changes that CMS is implementing to combat opioid misuse. In this post, we focus on CMS’s new Medicare Part D Opioid Overutilization Policies.


Last year, CMS published a road map outlining the agency’s approach to addressing the nation’s opioid epidemic. CMS’s strategy has three prongs: (1) prevent new cases of opioid use disorder (OUD); (2) expand treatment for individuals with OUDs; and (3) leverage data to improve the agency’s prevention and treatment options.


In line with that strategy, the agency published an article detailing its Medicare Part D Opioid Overutilization Policies for 2019. The policies focus on improving communication between and among Part D plans (PDPs) and providers to better coordinate efforts to prevent opioid misuse. As CMS points out, “Providers are in the best position to identify and manage potential opioid overutilization in the Medicare Part D population. Medicare prescription drug plans can assist providers by alerting them about unusual utilization patterns in prescription claims.”
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FDA Silent on CBD Regulation at Cosmetics Conference, But Legislation May Be Imminent

April 1, 2019 | Blog | By Benjamin Zegarelli, Aaron Josephson

Regulation of cannabidiol (CBD) was a hot topic on Day 1 of ACI’s Cosmetics & Personal Care Products conference on March 28, 2019. Attendees asked many questions about legitimate uses of and claims for CBD, but definite answers were in short supply due to the current confusion over the legality of CBD as a product itself or other products, such as food or cosmetics, with CBD added.

When asked a direct question about FDA’s perspective on and plans for CBD regulation, Dr. Linda Katz, Director of FDA’s Office of Cosmetics and Colors and Acting Chief Medical Officer for Food Safety and Applied Nutrition, did not comment directly but referred all attendees to an upcoming public meeting on CBD in April 2019. It is possible that the public meeting could be the start of an FDA rulemaking process for CBD regulations. Even though Dr. Katz was unable to comment, there was still plenty of CDB advice to share with industry attendees.
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ML Strategies Health Care Preview - Week of March 25, 2019

March 26, 2019 | Blog | By Eli Greenspan

This week, House Democrats are pressing forward with a health care package designed to lower drug costs and strengthen the Affordable Care Act (ACA). This package will provide a platform for Democrats to tout legislation that stabilizes the ACA or counteracts actions taken by the Administration. While this legislative package is sure to get a lot of attention following the Department of Justice announcement regarding Texas v. Azar, it's unclear how much support it will garner in the Senate.
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The Supreme Court denied a petition for certiorari last Monday in U.S. ex rel. Prather v. Brookdale Senior Living Communities, Inc., No. 17-5826 (6th Cir. June 11, 2018), again declining to revisit or clarify the False Claims Act's “materiality” standard set forth in its 2016 decision in Universal Health Services v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016). 

In Prather, the relator alleged that defendant Brookdale Senior Living Communities, Inc. (Brookdale), a home health provider, submitted bills for medical services that were “untimely” signed and certified by physicians in violation of Medicare regulations.  When submitting Medicare claims, Brookdale purportedly did not obtain the required physician certifications attesting that the medical services provided by Brookdale were necessary until months after establishing a patient’s plan of care.  Because Medicare regulations under 42 C.F.R. § 424.22(a)(2) require physician certifications “at the time the plan of care is established or as soon thereafter as possible,” the relator alleged that Brookdale’s untimely certifications rendered the claims false under the implied false certification theory.  The district court dismissed the complaint on materiality grounds, holding that the noncompliance was insubstantial and that the relator failed to allege that the government had ever denied a claim based on a violation of the timing requirement under the Medicare regulations.
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Secretary Azar Addresses Drug Pricing and Care Coordination in AHLA Keynote

March 22, 2019 | Blog | By Lauren Moldawer, Sarah Beth Kuyers

Earlier this week, Alex Azar, Secretary of the Department of Health and Human Services (“HHS”), delivered keynote remarks at AHLA’s 2019 Institute on Medicare and Medicaid Payment Issues. 

Framing his remarks around two key initiatives of the Administration, regulatory reform and affordable healthcare, Secretary Azar promised a bold and swift approach to regulatory reform over the coming years. 

Secretary Azar discussed HHS’ initiative known as the “Regulatory Sprint to Coordinated Care,” which we’ve previously discussed on the blog. The agency is undergoing a “comprehensive reexamination of rules that may be impeding coordinated care.”  As a “sprint,” he noted the goal is to issue rulemaking to alleviate impediments “as soon as possible.”
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Surprise Medical Bills Gain National Attention

March 21, 2019 | Blog | By Bridgette Keller

No one wants to be faced with a large, unexpected medical bill after receiving health care services. Unfortunately, patients often find themselves in this situation after seeking emergency treatment or transportation, undergoing a surgical procedure, or even the birth of a child. These “surprise medical bills” occur when the patient goes to a hospital or facility that is “in-network” with the patient’s health plan, but the physician providing the services is not and is considered “out-of-network” or “OON.” This issue found its way back to the national stage this week, with several important highlights.
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OIG Approves Free Post-Discharge Care Program

March 18, 2019 | Blog | By Ellen Janos, Matt Mora

Earlier this month, the Department of Health and Human Services Office of the Inspector General (OIG) issued an advisory opinion (Advisory Opinion No. 19-03) (Opinion) concluding that a program consisting of free, in-home follow-up care to patients at a higher risk of admission or readmission (the Arrangement) was “low risk” under the civil monetary penalties prohibition on beneficiary inducement (the Beneficiary Inducement CMP). This comes as good news to hospitals and other providers who are focused on care coordination and value-based programs.
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On January 15, 2019, Governor Cuomo released the 2019-2020 Executive Budget, which proposes substantial legislative changes that would affect pharmacy benefit managers (PBMs).  Among other things, the law would require PBMs to be licensed and places limitations on how they can be compensated. This week, the State Senate released its own Budget that, while joining the Governor's efforts to regulate PBMs, purports to create additional safeguards around PBM business activities, including increased financial penalties on PBMs that violate the law.
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Last week, a U.S. district court judge in the Southern District of Florida upheld a magistrate judge’s decision to dismiss False Claims Act (FCA) allegations against a compounding pharmacy, its private equity firm owner, and two individuals. DOJ filed its complaint in intervention last February against the pharmacy, Patient Care America (PCA); its private equity backer, Riordan Lewis & Haden, Inc.; and two individual executives. The government alleged that the parties engaged in an illegal kickback scheme that resulted in the submission of false claims to TRICARE for expensive compounded drugs. This case is reportedly the first in which the federal government intervened against a private equity firm owner.
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Device Modernization Series: In Vitro Clinical Tests

March 7, 2019 | Blog | By Aaron Josephson

In our first two Device Modernization series posts, we discussed FDA’s 510(k) modernization efforts and the proposed De Novo regulation. FDA has also had a heavy hand in legislative efforts to retool oversight of laboratory developed tests (LDTs) and other in vitro diagnostics (IVDs). The proposed approach would create an entirely new category of medical product separate from medical devices known as in vitro clinical tests (IVCTs).
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Latest HIPAA Breach Involves Medical Records Hack of Business Associate

March 6, 2019 | Blog | By Kristen Marotta, Sarah Beth Kuyers

AltaMed Health Services (AltaMed) and California Physicians Services (doing business as Blue Shield of California (BSC)) recently received notice from their business associate, Sharecare Health Data Services (SHDS), of a hack of SHDS’s network that stores patients’ medical records.  The hacker was able to acquire and/or access patients’ protected health information (PHI) contained in the medical records kept by SHDS on behalf of AltaMed and BSC. The breach of AltaMed’s data was discovered on June 22, 2018, and the breach for BSC was discovered a few days later on June 26, 2018. Upon investigation, however, officials determined that both breaches went undetected for over a month and actually began on May 21, 2018.
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On March 5, 2019, FDA Commissioner Scott Gottlieb announced his resignation. The physician and venture capitalist, ​for whom this was ​a second stint at the FDA, intends to leave the agency in about a month to spend more time with his family. In this post, Aaron Josephson reflects on Dr. Gottlieb's time leading the FDA and its future after his departure.
Viewpoint General
On February 26, 2019, the Senate Finance Committee heard testimony from top executives representing seven high-profile drug manufacturers.  This hearing was the second to examine drug pricing in America. The Committee’s questions to executives from Pfizer, Merck & Co., Johnson & Johnson, AbbVie, Bristol-Myers Squibb, Sanofi, and AstraZeneca were aimed at identifying why already-high drug prices continue to climb and what can be done to stop the trend. The hearing comes during a period of increasing pressure on pharmaceutical manufacturers and others in the drug supply chain to improve patient access to drugs, increase transparency in drug pricing, and stop the trend of significant price increases.  This type of high profile hearing just confirms that these pressures will continue, and as a number of proposals to address drug prices work their way through Congress and multiple federal agencies, the discussion around drug pricing reforms will undoubtedly continue.  Following on ML Strategies’ coverage of the Senate hearing, below are a handful of key takeaways from the hearing.
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ML Strategies Health Care Preview - Week of March 4, 2019

March 4, 2019 | Blog | By Eli Greenspan

As Congress continues its oversight of prescription drug prices, the Senate Finance Committee will also examine abuse and neglect at nursing homes. Meanwhile, the House of Representatives is looking at ways to lower health care costs as it keeps it eye on lowering drug costs as well. The focus and intensity around drug pricing is not expected to diminish anytime soon. For our complete health care preview...
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March 2019: Where Are We Now With 340B?

March 1, 2019 | Blog | By Ellyn Sternfield

What might 2019 mean for the 340B program? This post addresses the on-going litigation over the OPPS Medicare payment reduction for 340B drugs, ceiling price validation, and state initiatives related to the 340B program.
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What Does the Future Hold for Drug Pricing?

February 28, 2019 | Blog | By Eli Greenspan

On Tuesday, executives from seven of the largest pharmaceutical companies testified before the Senate Finance Committee on rising prescription drug prices. While the hearing was expected to be packed with fireworks as Senators of both parties grilled the nation's top pharmaceutical executives, it was largely uneventful.
Viewpoint General

Device Modernization Series: FDA’s Proposed De Novo Regulation

February 28, 2019 | Blog | By Aaron Josephson

In our first Device Modernization series post, we discussed how FDA is proposing to modernize the 510(k) review program. FDA also recently issued a proposed regulation for the De Novo program and linked that proposed regulation to 510(k) modernization efforts as part of a broader strategy to improve device safety.

The proposed De Novo regulation, issued December 5, 2018, would codify into regulation many of the policy and programmatic features of the De Novo program that are currently outlined in guidance documents. Because guidance is nonbinding, FDA is seeking through the proposed regulation to provide structure, clarity, and transparency to the De Novo process in a way that would be binding on De Novo submitters.
Do you manufacture, import, or market personal hygiene and wellness devices sold in drugstores? If so, you may be focused on U.S. Food and Drug Administration (FDA) compliance, but may not have considered the requirements of another Federal regulatory agency: the Federal Communications Commission (FCC). Manufacturing, importing, and/or marketing non-compliant personal hygiene, wellness and similar devices may violate the FCC’s rules.
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