Health Care Week in Review: State of the Union and HHS Guidance on Drug Rebates and PHE

Below is Alston & Bird’s Health Care Week in Review, which provides a synopsis of the latest news in health care regulations, notices, and guidance; federal legislation and congressional committee action; reports, studies, and analyses; and other health policy news.

Week in Review Highlight of the Week:

This week, President Biden addressed the nation at the State of the Union and HHS released guidance for the Medicare drug inflation rebate program and a roadmap for the end of the PHE. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On January 8, 2023, the Centers for Disease Control and Prevention (CDC) issued a notice entitled, Policy Statement: Biosafety Level 4/Animal Biosafety Level 4 Laboratory Verification. CDC announces the availability and implementation of the final Biosafety Level 4 (BSL-4)/Animal BSL-4 (ABSL-4) verification policy. The policy statement assists individuals and entities in verifying that the facility design parameters and operational procedures, including heating, ventilation, and air conditioning (HVAC) systems, in BSL-4 and/or ABSL-4 laboratories are functioning as intended to meet the biosafety sufficiency requirement in the Department of Health and Human Services (HHS)/CDC select agent and toxin regulations.
• On January 9, 2023, the Food and Drug Administration (FDA) issued draft guidance entitled, Protein Efficiency Ratio (PER) Rat Bioassay Studies to Demonstrate That a New Infant Formula Supports the Quality Factor of Sufficient Biological Quality of Protein. The draft guidance, when finalized, will provide information for manufacturers and contract laboratories that perform PER studies to assist in designing, conducting, evaluating, and reporting PER studies. The draft guidance, when finalized, will explain “appropriate modifications” of AOAC Official Method 960.48 (the AOAC Method) with the aim of supporting industry in successfully conducting PER studies that demonstrate that a new infant formula meets the quality factor of sufficient biological quality of protein when fed as the sole source of nutrition
• On January 9, 2023, the Department of Health and Human Services (HHS) issued a request for information (RFI) entitled, Request for Information on Promising Practices for Advancing Health Equity for Intersex Individuals. Through this RFI, the Office of the Assistant Secretary for Health (OASH), is soliciting feedback from stakeholders throughout the scientific research community, clinical practice communities, patient and family advocates, scientific or professional organizations, federal partners, internal HHS stakeholders, and other interested constituents on the development of a report on promising practices for advancing health equity for intersex individuals. The overarching purpose of the report on the promising practices for advancing health equity for intersex individuals is to ensure access to affirming, high-quality care for intersex people who live in the U.S.
• On February 9, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a notice entitled, Inflation Reduction Act Initial Program Guidance. CMS is announcing an opportunity for the public to comment on CMS’ initial guidance for the Medicare Part B and Part D Prescription Drug Inflation Rebate Program for the implementation of the Inflation Reduction Act (IRA). CMS will be releasing additional IRA-related guidance; all can be viewed on the dedicated Inflation Reduction Act section of the CMS web site.
• On February 10, 2023, CDC issued a notice entitled, Establishment of the Coronavirus and other Respiratory Viruses Division. CDC has modified its structure. This notice announces the establishment of the Coronavirus and other Respiratory Viruses Division and other organizational components within the National Center for Immunization and Respiratory Diseases (NCIRD), Deputy Director for Infectious Diseases (DDID).
• On February 10, 2023, HHS issued a proposed rule entitled, Medications for the Treatment of Opioid Use Disorder: Removal of the DATA-2000 Waiver Requirements. HHS is issuing this supplemental notice of proposed rulemaking (SNPRM) to solicit public comment on its proposal to remove provisions authorized under the Controlled Substances Act (CSA), as amended by the Drug Addiction Treatment Act of 2000 (DATA-2000). These changes are as a result of amendments made in the Consolidated Appropriations Act, 2023, which was enacted on December 29, 2022. Among other things, section 1262(a)(1) of this Act amended the CSA by eliminating the requirement that practitioners obtain a waiver to prescribe certain schedule III – V medications for the treatment of opioid use disorder (OUD).
• On February 10, 2023, FDA issued final guidance entitled, Compounding Certain Ibuprofen Oral Suspension Products Under Section 503B of the Federal Food, Drug, and Cosmetic Act. This guidance describes FDA’s regulatory and enforcement priorities regarding compounding certain ibuprofen oral suspension products by outsourcing facilities to provide to hospitals and health systems for administration within the hospital or health-system and state-licensed pharmacies (including those within hospitals and health systems), and applicable federal facilities, to dispense to patients for use at home after receiving a valid, patient-specific prescription. This final guidance revises and replaces the guidance of the same name issued on January 25, 2023. Revisions were made to describe the Agency’s regulatory and enforcement priorities regarding the compounding of certain ibuprofen oral suspension products by outsourcing facilities to provide to state-licensed pharmacies (including those within hospitals and health systems), and applicable federal facilities, to dispense to patients for use at home after receiving a valid, patient-specific prescription.

Event Notices

• March 1, 2023: The National Institutes of Health (NIH) announced a public meeting of the National Cancer Institute (NCI) Council of Research Advocates (NCRA). The agenda will include a welcome and the Chairwoman’s Remarks; an update from the NCI Director; and other NCI updates and legislative updates.
• March 2, 2023: NIH announced a public meeting of the Office of AIDS Research (OAR) Advisory Council (OARAC). The sixty-second meeting of OARAC will include the OAR Director’s Report; presentation and discussions on HIV and aging, updates from the Clinical Guidelines Working Groups of OARAC; an overview of the Advanced Research Projects Agency for Health (ARPA-H); updates from NIH HIV-related advisory councils and NIH-wide programs; and public comment.
• March 6, 2023: The Agency for Healthcare Research and Quality (AHRQ) announced a public meeting of the National Advisory Council (NAC) for Healthcare Research and Quality. On Monday, March 6, 2023, NAC members will meet to conduct preparatory work prior to convening the Council meeting at 11:30 a.m., with the call to order by the Council Chair, an introduction of NAC members, and approval of previous Council summary notes. The NAC members will then receive an update from the AHRQ Director, including a follow up discussion on private capital and engaging health system executive leadership. The agenda will also include: (1) an update and discussion by NAC members on AHRQ’s Patient Safety Framework and the Patient Safety Action Alliance’s efforts to promote Safer Together: A National Patient Safety Action Plan and (2) a report out and discussion about Long Covid and addressing health system fragmentation.
• March 6, 2023: NIH announced a partially open meeting of the Board of Scientific Counselors (BSC), NCI. The open agenda will include remarks from the NCI Director. The closed agenda will include review and evaluation of personnel qualifications and performance, and of the competence of individual investigators.
• March 7, 2023: FDA announced a public advisory committee meeting of the Vaccines and Related Biological Products Advisory Committee (VRBPAC). VRBPAC will meet in open session to discuss and make recommendations on the selection of strains to be included in the influenza virus vaccines for the 2023--2024 influenza season.
• March 9, 2023: CDC announced a public meeting of the Advisory Board on Radiation and Worker Health (ABRWH). The agenda will include discussions on the following: work group and subcommittee reports; update on the status of U.S. Securities and Exchange Commission (SEC) petitions; and plans for the April 2023 ABRWH meeting.
• March 14, 2023: HHS announced a public meeting of the President’s Advisory Commission on Asian Americans, Native Hawaiians, and Pacific Islanders (the Commission). The Commission, authorized by Executive Order 14031, will meet to discuss full and draft recommendations by the Commission’s six Subcommittees on ways to advance equity, justice, and opportunity for Asian American, Native Hawaiian, and Pacific Islander communities. The Subcommittees are: Belonging, Inclusion, Anti-Asian Hate, Anti-Discrimination; Data Disaggregation; Language Access; Economic Equity; Health Equity; and Immigration and Citizenship Status.
• March 20-21, 2023: The Health Resources and Services Administration (HRSA) announced a public meeting of the Advisory Committee on Infant and Maternal Mortality (ACIMM). The agenda may include the following topics: an update on the recommendations submitted to the Secretary on improving birth outcomes among American Indian and Alaska Native mothers and infants; a discussion to determine new and continuing priority areas for the Committee; federal updates; and ACIMM operations.
• March 23-24, 2023: HHS announced a public meeting of the Presidential Advisory Council on Combating Antibiotic-Resistant Bacteria (PACCARB). This will be a two-day meeting that will focus on the report out from the Pandemic Preparedness Working Group as they present their findings in response to the 2022 task from the HHS Secretary in a report with recommendations to the full PACCARB for deliberation and vote. Upon completion of the voting process, the PACCARB will honor its retiring members. The meeting will also include updates from the international sector on progress in the ongoing fight against antimicrobial resistance and an exploration of future topics for the PACCARB to consider in the following year.

II. Hearings & Markups

U.S. House of Representatives

• On February 8, 2023, the House Committee on Energy and Commerce Subcommittees on Health and on Oversight & Investigations held a joint hearing entitled, The Federal Response to COVID-19. Witnesses present included: Dr. Lawrence A. Tabak, D.D.S., PhD., Senior Official Performing the Duties of the Director, NIH; The Honorable Robert Califf, M.D., Commissioner of Food and Drugs, FDA; and Dr. Rochelle P. Walensky, M.D., M.P.H., Director, CDC.

U.S. Senate

• On February 9, 2023, Senate Committee on the Judiciary held an Executive Business Meeting. The committee discussed the following bills: S. 79, Interagency Patent Coordination and Improvement Act of 2023; S. 113, Prescription Pricing for the People Act of 2023; S. 142, Preserve Access to Affordable Generics and Biosimilars Act; S. 148, Stop STALLING Act; and S. 150, Affordable Prescriptions for Patients Act of 2023.

III. Reports, Studies & Analyses

• On February 6, 2023, the Congressional Research Service (CRS) published a report entitled, S. Health Care Coverage and Spending. This report details spending on private health insurance, Medicare, Medicaid and the Children’s Health Insurance Program (CHIP), out-of-pocket spending, insured spending, military spending, and other health care spending in the U.S. in 2021. The report found that in 2021, individuals, health insurers, and federal and state governments spent nearly $4.0 trillion on health consumption expenditures (HCEs) (about 17.4 percent of the nation’s gross domestic product). Additionally, in 2021, among the 327 million people living in the U.S., about 68.4 percent were privately insured, 18.2 percent were insured through Medicare, 21.1 percent were insured through Medicaid/CHIP, 4.9 percent were insured through the military, and 8.6 percent were uninsured. Of the biggest HCE contributors in 2021, private health insurance expenditures accounted for $1.2 trillion (29.9 percent of overall HCE); Medicare accounted for $901 billion (22.3 percent of overall HCE); Medicaid/CHIP accounted for $756 billion (18.7 percent of overall HCE); and out-of-pocket spending was $433 billion (10.7% of total HCE). Another notable finding was that 30 percent of out-of-pocket spending was attributable to durable medical equipment (DME) and other non-durable medical products. Other health services saw a sharp, temporary increase in spending in 2020 primarily due to the COVID-19 pandemic.
• On February 6, 2023, CRS published a report entitled, Insulin Coverage Under Private Health Insurance and Medicare Part D: In Brief. This report details background information on diabetes and insulin, such as insulin pricing, coverage of insulin under private health insurance, Medicare Part D, and Medicare Part B. It also provides an overview of legislation that addresses the cost of insulin and diabetes care, including the IRA, which includes a provision allowing High Deductible Health Plans (HDHPs) that qualify for tax-advantaged Health Savings Accounts (HSAs) to cover the costs of selected insulin products before an enrollee meets the annual deductible. Additionally, the IRA includes provision to cap insulin cost-sharing in Medicare starting in 2023, which studies have shown will greatly reduce costs for many insulin users but may increase costs to health insurers. However, the IRA does not address the cost of insulin for the uninsured or the privately insured nor does it address the cost of diabetes-related supplies, so the report notes that more still needs to be done to increase affordability of care for patients with diabetes. The report also notes that other legislative proposals would limit list prices manufacturers could charge for insulin and limit annual list price increases.
• On February 7, 2023, the RAND Corporation published a report entitled, Evaluation of Mental Health First Aid in New York City. This report evaluates the impact of Mental Health First Aid (MHFA) programs and trainings that were made available to 155,000 New Yorkers, including staff from community-based organizations and city agencies. The authors found that 90 percent of respondents had contact with someone that had a mental health problem in the past six months and nearly all applied MHFA skills. Additionally, 65 percent of city agency survey respondents reported that they would feel comfortable discussing mental health with coworkers and 58 percent reported that they would feel comfortable discussing mental health with supervisors. The authors also found that 84 percent of respondents reported correcting misperceptions about mental health. The report concluded that MHFA may be a promising approach to recognize and assist people with mental health challenges. As such, authors recommended: (1) targeting mental health literacy and bolstering MHFA trainings; (2) including community stigma, workplace mental health support, and diversity and equity education in MHFA trainings; and (3) considering trade-offs between the selection and delivery of mental health programming.
• On February 7, 2023, the HHS Office of Inspector General (OIG) published a technical assistance brief entitled, Implementation of Inflation-Indexed Rebates for Part B Drugs. This brief is intended to assist CMS as it implements requirements for the Agency to calculate inflation-indexed rebates for certain Part B drugs beginning in 2023 under the IRA. OIG acknowledges the potential of the rebates to recoup billions of dollars for the Medicare program and its beneficiaries. However, OIG recognizes administrative challenges may hinder the implementation of a comprehensive inflation-indexed rebate program. As such, OIG identifies several challenges CMS may encounter and should consider when establishing the rebate program, including: (1) identifying products subject to Part B rebates; and (2) excluding claims from Part B rebate calculations that were already subject to rebates under the Medicaid Drug Rebate Program, and discounts under the 340B Drug Discount Program.
• On February 8, 2023, CRS published a report entitled, Medicaid: An Overview. This report provides background information on the Medicaid program, which finances the delivery of primary and acute medical services as well as long-term services and supports (LTSS) to an estimated 85 million people. The report notes that the federal government and states jointly finance Medicaid. Low-income children, pregnant women, parents of dependent children, elderly individuals, individuals with disabilities, and low-income nonelderly adults are eligible for Medicaid coverage. Medicaid enrollees receive services either through a fee-for-service (FFS) delivery system or a managed care delivery system. Beneficiary cost-sharing in the program is low and Medicaid provider payment rates are set by states within federal rules.
• On February 8, 2023, CRS published a report entitled, COVID-Related Travel Restrictions on Arriving Vaccinated and Unvaccinated Foreign Nationals with Valid Documents. This report summarizes all travel restrictions enforced for people entering into the U.S. with valid documents (e.g., visas) during the COVID-19 pandemic. The report includes entry restrictions for those arriving by air and over land borders as well as a brief summary of the “Title 42” restrictions. Authors also include a number of considerations for Congress, such as: (1) amending executive statutory authority to place guidelines on the President’s authority to impose travel restrictions on certain populations; (2) proposing legislation to impose a scope of discretion afforded to federal officials acting under authority granted by the Tariff Act, which allows federal officials to impose travel restrictions in response to a national emergency; and (3) considering H.R. 185, To terminate the requirement imposed by the Director of the Centers for Disease Control and Prevention for proof of COVID-19 vaccination for foreign travelers, and for other purposes, which would restrict the ability to use federal funds to enforce air travel vaccination requirements for foreign travelers.
• On February 9, 2023, CRS published a report entitled, Effects of Terminating the Coronavirus Disease 2019 (COVID-19) PHE and NEA Declarations. In response to the COVID-19 public health emergency (PHE), many federal agencies issued flexibilities, waivers, authorities, and guidance for various programs (e.g., Medicare and Medicaid) and stakeholders (e.g., physicians and clinical staff) authorized under Section 319 of the Public Health Service Act (PHSA) and the COVID-19 National Emergencies Act (NEA). The Biden Administration announced its intention to end the COVID-19 PHE on May 11, 2023. However, there are also a number of bills in Congress, that if enacted, would end the COVID-19 PHE upon the date of enactment, which may be earlier than May 11, 2023. As such, CRS published this report to describe the process to terminate Section 319 and NEA declarations and the effect of terminating both. CRS notes that the authorities under one may not necessarily be affected by terminations of authorities under the other. CRS also notes that the impact of various terminations of authorities will vary and necessitate individual consideration.

IV. Other Health Policy News

• On February 7, 2023, President Biden held his State of the Union Address. The President focused his remarks on cancer care, veterans, mental health, and the opioid epidemic. He highlighted the Administration’s efforts in the Cancer Moonshot, which has announced nearly 30 new federal programs and policies to help increase access to cancer screening and treatment, decrease preventable cancers and environmental exposures, advance cutting-edge research, support patients and caregivers, and more. The President also announced his Administration’s goals to expand access to mental health care for veterans and to support housing and job search efforts for veterans. President Biden also discussed the importance of addressing the larger mental health crisis occurring in all populations. He reaffirmed his Administration’s efforts to strengthen data privacy and transparency, support the expansion of the mental health workforce, improve school-based mental health, enhance crisis services, and strengthen the mental health system’s capacity and diversity. Finally, the President announced key actions the Biden Administration will take to address the opioid epidemic, including by stopping fentanyl from crossing the border into the U.S.; expanding access to prevention, harm reduction methods, and treatment opportunities; and launching an education campaign to inform young people on the dangers of fentanyl and on how naloxone can help save lives. More information on President Biden’s State of the Union can be found here.
• On February 9, 2023, HHS released initial guidance for the Medicare prescription drug inflation rebate program under the IRA. Under this program, drug manufacturers will pay rebates to the Medicare Trust Fund when their prescription drug prices increase faster than the rate of inflation for certain drugs, with the goal of lowering drug costs for many Medicare beneficiaries. Beginning on October 1, 2022, drug companies were required to pay these rebates on certain Part D drugs and beginning on January 1, 2023, drug companies were required to pay these rebates on certain Part B drugs. By April 1, 2023, beneficiaries in traditional Medicare and those in Medicare Advantage (MA) plans may pay lower coinsurance rates for certain Part B drugs as a result of this program. CMS announced its intention to send the first invoices to drug companies for the rebates beginning in 2025. As part of this guidance, CMS is also seeking public comment on various topics, including: (1) how to accurately determine the number of drug units for the drugs prescribed under the rebate program and of the inflation rebate payments and (2) the process to impose civil monetary penalties on manufacturers that fail to pay the rebates. More information on this announcement can be found here.
• On February 9, 2023, HHS released a fact sheet to describe the agency’s roadmap and plan to transition out of the PHE. HHS details the policies and flexibilities granted during the pandemic that will and will not be affected by the end of the PHE. HHS reaffirms that many protections will stay in place, such as ensuring the availability of COVID-19 vaccines and treatments, and that the Biden Administration will work closely with partners and stakeholders to ensure a smooth transition out of the PHE. The fact sheet also clarifies that major Medicare and Medicaid telehealth flexibilities, the process for states to begin eligibility redeterminations, access to buprenorphine and expanded methadone take-home doses for opioid use disorder treatment, and FDA’s emergency use authorizations (EUAs) for COVID-19 products will not be affected by the end of the pandemic. However, the fact sheet notes that certain Medicare and Medicaid waivers and broad flexibilities for health care providers, coverage for COVID-19 testing particularly for those under private insurance, reporting of COVID-19 laboratory results and immunization data to CDC, certain FDA guidance on clinical practice and supply chains, and certain Public Readiness and Emergency Preparedness (PREP) Act liability protections, are among flexibilities offered during the pandemic that may change or end with the end of the PHE. More information on this announcement can be found here.
• On February 10, 2023, Alston & Bird’s Privacy, Cyber & Data Strategy and Consumer Protection/Federal Trade Commission (FTC) teams analyzed the FTC’s first-ever enforcement of its Health Breach Notification Rule through the U.S. Department of Justice (DOJ) complaint alleging that GoodRx Holdings Inc., a telehealth and prescription drug discount provider, violated Section 5 of the Federal Trade Commission Act (the FTC Act) and the FTC’s Health Breach Notification Rule. The analysis also examines how FTC is scrutinizing how companies share consumers’ online health data with third parties. In doing so, Alston & Bird found three key findings: (1) the Health Breach Notification Rule applies to entities not subject to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), including apps and connected devices; (2) FTC alleges GoodRx violated not just FTC’s Health Breach Notification Rule but its own privacy policy; and (3) enforcing FTC’s Health Breach Notification Rule shows that digital advertising is subject to significant scrutiny. More information on this analysis can be found here.

Click here to view the members of our Health Care Legislative & Public Policy team.