Health Care Week In Review: HHS Selects the First 10 Drugs for Medicare Drug Price Negotiation

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, CMS released its Skilled Nursing Facility and Inpatient Prospective Payment System final rules and HHS announced the establishment of the Office of Long COVID Research and Practice. Read more about these actions and other news below.

I. Regulations, Notices & Guidance

• On August 28, 2023, the Food and Drug Administration (FDA) issued a proposed rule entitled, Proposed Requirements for Tobacco Product Manufacturing Practice; Extension of Comment Period. FDA is extending the comment period for the proposed rule entitled, Requirements for Tobacco Product Manufacturing Practice, which was published in the Federal Register on March 10, 2023, by 30 days. FDA will now accept comments until 11:59pm ET on October 6, 2023. FDA is taking this action in response to a request for an extension to allow interested persons additional time to submit comments.
• On August 30, 2023, the Health Resources and Services Administration (HRSA) issued a notice entitled, Supporting Healthy Start Performance Project (SHSPP). HRSA announced that it will provide supplemental award funds to the current SHSPP recipient in fiscal year (FY) 2023 to provide new and continued support to Healthy Start grant recipients.
• On August 30, 2023, HRSA issued a notice entitled, HRSA-Initiated Supplemental Funding to the Supporting Maternal Health Innovation Program. HRSA announced that it is providing supplemental funds not to exceed $1,500,000 to the Supporting Maternal Health Innovation Program, also referred to as the Maternal Health Learning and Innovation Center (MHLIC), in FY 2023 to provide support and capacity building to HRSA’s new maternal health award recipients under the State Maternal Health Innovation (MHI) Program (HRSA-23-108).
• On August 30, 2023, FDA issued guidance entitled, Enhanced Drug Distribution Security at the Package Level Under the Drug Supply Chain Security Act; Guidance for Industry; Availability. This guidance clarifies the enhanced drug distribution security requirements listed in the Federal Food, Drug, and Cosmetic Act (FD&C Act). In addition, this guidance outlines and makes recommendations on the system attributes necessary to enable secure tracing of products at the package level, including allowing for the use of verification, inference, and aggregation, as necessary. This guidance finalizes the draft guidance of the same title issued on June 4, 2021.
• On August 30, 2023, FDA issued guidance entitled, Considerations for the Use of Real-World Data and Real-World Evidence to Support Regulatory Decision-Making for Drug and Biological Products; Guidance for Industry; Availability. FDA is issuing this guidance as part of its Real-World Evidence (RWE) Program for drugs and to satisfy, in part, the mandate under the FD&C Act to issue guidance about the use of RWE in regulatory decision making. This guidance discusses the applicability of FDA’s investigational new drug (IND) application regulations to various clinical study designs that utilize real-world data (RWD) and clarifies the agency’s expectations regarding clinical studies using RWD submitted to FDA in support of a regulatory decision regarding the effectiveness or safety of a drug that are not subject to the IND regulations. This guidance finalizes the draft guidance of the same title issued on December 9, 2021.
• On August 30, 2023, CMS issued a final rule entitled, Medicaid Program and CHIP; Mandatory Medicaid and Children’s Health Insurance Program (CHIP) Core Set Reporting. The final rule establishes requirements for mandatory annual State reporting of the Core Set of Children’s Health Care Quality Measures for Medicaid and the Children’s Health Insurance Program (CHIP), the behavioral health measures on the Core Set of Adult Health Care Quality Measures for Medicaid, and the Core Sets of Health Home Quality Measures for Medicaid.
• On August 31, 2023, FDA issued guidance entitled, Wholesale Distributor Verification Requirement for Saleable Returned Drug Product and Dispenser Verification Requirements When Investigating a Suspect or Illegitimate Product-- Compliance Policies, Revision 1; Guidance for Industry; Availability. The revised guidance explains that FDA intends to extend for an additional year (from November 27, 2023, to November 27, 2024), the enforcement policies described in the guidance entitled “Wholesale Distributor Verification Requirement for Saleable Returned Drug Product and Dispenser Verification Requirements When Investigating a Suspect or Illegitimate Product-Compliance Policies,” published in the Federal Register on October 23, 2020 (the 2020 Compliance Policies). The 2020 Compliance Policies relate to provisions in the FD&C Act, as added by the Drug Supply Chain Security Act (DSCSA), requiring wholesale distributors to verify the product identifier prior to further distributing saleable returned product and requiring dispensers to verify the product identifier for suspect or illegitimate product in the dispenser’s possession or control.
• On August 31, 2023, the Agency for Healthcare Research and Quality (AHRQ) issued a request for supplemental evidence and data submissions entitled, Supplemental Evidence and Data Request on Diagnosis and Treatment of Tethered Spinal Cord. AHRQ is seeking scientific information submissions from the public. Scientific information is being solicited to inform the agency’s review on Diagnosis and Treatment of Tethered Spinal Cord, which is currently being conducted by the AHRQ’s Evidence-based Practice Centers (EPC) Program. Access to published and unpublished pertinent scientific information will improve the quality of this review.
• On August 31, 2023, NIH issued a notice entitled, Request for Information (RFI): Inviting Comments and Suggestions on Updating the NIH Mission Statement. NIH is inviting feedback on a proposed update to the National Institutes of Health (NIH) mission statement. This RFI will inform NIH's efforts to update its mission statement to ensure that it reflects the NIH mission as accurately as possible. NIH encourages commenters to review this entire RFI to ensure responses are comprehensive and commentators have a full understanding of how it will be used.
• On August 31, 2023, the Substance Abuse and Mental Health Services Administration (SAMHSA) issued a notice entitled, Fiscal Year (FY) 2023 Notice of Supplemental Funding Opportunity. This notice is to inform the public that SAMHSA is supporting supplemental funding in the scope of the parent award to the 36 Rural Emergency Medical Services Training Grant (REMS) recipients funded under Notice of Funding Opportunity (NOFO) TI-23-011. These recipients have a project end date of September 29, 2024. The supplemental funding is to provide the opioid antagonist medication, naloxone, that can be used to treat respiratory depression in suspected opioid overdose patients, and for the procurement of emergency equipment used to rapidly reverse the effects of opioid overdoses. Recipients may receive up to $49,000 for the purchase of naloxone and up to $49,000 for purchasing equipment, for a total of $98,000 per recipientOn September 1, 2023, CMS issued a proposed rule entitled, Medicare and Medicaid Programs; Minimum Staffing Standards for Long-Term Care Facilities and Medicaid Institutional Payment Transparency Reporting. The proposed rule would establish minimum staffing standards for long-term care facilities, as part of the Biden-Harris Administration’s Nursing Home Reform initiative to ensure safe and quality care in long-term care facilities. In addition, this rule proposes to require states to report the percent of Medicaid payments for certain Medicaid-covered institutional services that are spent on compensation for direct care workers and support staff.
• On September 1, 2023, FDA issued final guidance entitled, Nontuberculous Mycobacterial Pulmonary Disease Caused by Mycobacterium avium Complex: Developing Drugs for Treatment; Guidance for Industry; Availability. This guidance assists sponsors in the clinical development of drugs for the treatment of nontuberculous mycobacterial pulmonary disease (NTM-PD) caused by Mycobacterium avium complex (MAC). This guidance finalizes the draft guidance of the same title issued on September 29, 2021.
• On September 1, 2023, FDA issued draft guidance entitled, Post-Warning Letter Meetings Under the Generic Drug User Fee Act; Draft Guidance for Industry; Availability. This draft guidance provides information on the implementation of the Post-Warning Letter Meeting process for certain drug manufacturing facilities, a program enhancement agreed upon by the Agency and industry as part of the negotiations relating to the reauthorization of the Generic Drug User Fee Amendments (GDUFA), as described in “GDUFA Reauthorization Performance Goals and Program Enhancements Fiscal Years 2023-2027” (GDUFA III commitment letter). Specifically, this draft guidance describes the process detailed in the GDUFA III commitment letter for how an eligible facility may request a Post-Warning Letter Meeting with FDA regarding the facility’s ongoing remediation efforts to current good manufacturing practice (CGMP) deficiencies described in a warning letter, how to prepare and submit a complete meeting package, and how FDA intends to conduct the Post-Warning Letter Meeting.
• On September 1, 2023, CMS issued a proposed rule entitled, Medicare Program: Hospital Outpatient Prospective Payment System: Remedy for the 340B-Acquired Drug Payment Policy for Calendar Years 2018-2022; Extension of Comment Period. CMS is extending the comment period for the proposed rule entitled, Medicare Program; Hospital Outpatient Prospective Payment System: Remedy for the 340B-Acquired Drug Payment Policy for Calendar Years 2018-2022, which would otherwise end on September 5, 2023 at 5pm EST, is extended until September 11, 2023 at 5pm EST.

Event Notices

• September 21-22, 2023: The Department of Health and Human Services (HHS) announced that the National Vaccine Advisory Committee (NVAC) will hold an in-person meeting on September 21-22, 2023. The meeting will be open to the public and public comment will be heard during the meeting. The confirmed meeting times and agenda will be posted on the NVAC website as soon as they become available.
• September 28, 2023: FDA announced a public meeting to discuss proposed recommendations for the reauthorization of the Over-the-Counter (OTC) Monograph Drug User Fee Program (OMUFA) for FYs 2026 through 2030. OMUFA authorizes FDA to assess and collect user fees to support OTC monograph drug activities. The current legislative authority for OMUFA expires September 30, 2025. At that time, new legislation will be required to reauthorize the OMUFA program for future fiscal years. The FD&C Act directs that FDA consult with the public as part of the OMUFA reauthorization process. FDA also invites public comment as the agency begins the process to reauthorize the program for FYs 2026 through 2030.
• November 1-2, 2023: HRSA announced a public meeting of the National Advisory Council on Migrant Health (NACMH) on November 1-2, 2023, 9am-5pm EST. For information about the meeting, visit NACMH’s website 30 business days before the meeting date, where instructions to join the meeting will be posted.

II. Reports, Studies & Analyses

• On August 29, 2023, Alston & Bird’s Employee Benefits & Executive Compensation Group issued an advisory entitled, Agencies Issue Extensive MHPAEA Guidance: Plan and Issuer Action Required. The advisory describes the key provisions of a proposed rule issued on July 25, 2023 by the Departments of Labor, Treasury, and Health and Human Services related to the Mental Health Parity and Addiction Equity Act (MHPAEA). Along with the proposed rule, the departments issued a technical release (TR) related to the proposed rule’s data collection requirements, a report to Congress, an enforcement fact sheet, and an MHPAEA guidance compendium. The advisory highlights the following aspects of the proposed rule: its three new requirements for nonquantitative treatment limitations (NQTLs); the government intent to take a holistic approach to enforcement to ensure parity; and, if the proposed rule is finalized, the need for every NQTL comparative analysis to be updated and expanded. Furthermore, the advisory notes that, if finalized in its current form, the proposed rule will impose significant new compliance obligations on group health plans and health insurance issuers and would be effective for plan years beginning on or after January 1, 2025. Comments on the proposed rule must be submitted to the departments by October 2, 2023.
• On August 31, 2023, the Urban Institute released a report entitled, New Mothers' Coverage Improved during the Public Health Emergency. The Urban Institute used 2016–2019 and 2021 American Community Survey data to assess trends in uninsurance among new mothers before and during the COVID-19 public health emergency (PHE) and Medicaid continuous coverage requirement. The report, in part, found that between 2019 and 2021 uninsurance rates among new mothers fell by 14 percent. In addition, Medicaid coverage for new mothers increased from 28.1 percent to 31.1 percent between 2019 and 2021. However, 1 in 10 new mothers remained uninsured in 2021, which creates a higher risk of them experiencing unmet health needs and financial burdens. Furthermore, the report noted that despite increases in new mothers’ insurance coverage being concentrated in states that did not expand Medicaid under the Affordable Care Act (ACA) and in the South, new mothers living in non-expansion states were still 2.3 times more likely to be uninsured (15.9 percent) in 2021 than those living in states that had expanded Medicaid under the ACA (6.9 percent). The report also highlighted that more than half of uninsured new mothers in 2021 lived in states that did not expand Medicaid and in the South.
• On September 1, 2023, the HHS Office of Inspector General (OIG) released a report entitled, Medicare Part B Drug Payments: Impact of Price Substitutions Based on 2021 Average Sales Prices. OIG found that since 2013, Medicare and its enrollees have saved $73.4 million due to CMS’s price-substitution policy for Part B-covered drugs. Further, OIG found that CMS lowered Medicare payment amounts for 13 drugs, resulting in $273,000 in savings. Finally, OIG found that Medicare and its enrollees could have saved an additional $889,000 in Medicare savings if CMS expanded the price-substitution criteria.

III. Other Health Policy News

• On August 25, 2023, the House Budget Committee Chair Jodey Arrington (R-TX) announced a Budget Committee Health Care Task Force to solicit stakeholder input to “find solutions to reduce health care spending, examine opportunities to modernize and personalize the health care system, and support policies to fuel innovation and increase patient access to quality and affordable care.” The task force will be led by Representative Michael Burgess (R-TX) and is comprised of five additional House Republican members plus Committee Chair Arrington. The task force has issued a request for information (RFI) asking for information on, but not limited to, the following: (1) regulatory, statutory, or implementation barriers that could be addressed to reduce health care spending; (2) efforts to promote and incorporate innovation into programs like Medicare to reduce health care spending and improve patient outcomes; (3) comments on CBO’s modeling capabilities on health care policies, including limitations or improvements to such analyses and processes; (4) examples of evidence-based, cost-effective preventive health measures or interventions that can reduce long term health costs; and, (5) recommendations to reduce improper payments in federal health care programs. Comments are due by October 15, 2023. The press release is available here. The RFI is available here.
• On August 29, 2023, the Biden Administration announced the first ten Medicare Part D drugs selected for price negotiation under the new authority required by the Inflation Reduction Act of 2022 (IRA). As noted in the Biden Administration’s release, the IRA authorizes the Secretary of HHS to negotiate prices directly “with participating manufacturers for selected drugs that have high total spending and are high expenditure, single source drugs without generic or biosimilar competition.” The number of drugs selected represent the highest total Medicare Part D spending. A total of 10 Part D drugs have been selected for 2026, and this number will increase in later years. Also, Part D drugs will be included in drugs selected for negotiation in 2028. The manufacturers of the ten drugs selected have until October 1 to either agree to price negotiations, pay a fine, or withdraw their products from Medicare and Medicaid. The ten drugs selected drugs include: (1) Eliquis; (2) Jardiance; (3) Xarelto; (4) Januvia; (5) Farxiga; (6) Entresto; (7) Enbrel; (8) Imbruvica; (9) Stelara; and (10) Fiasp, Fiasp FlexTouch, Fiasp PenFill, NovoLog, NovoLog FlexPen, NovoLog PenFill. The press release is available here. The fact sheet from the Office of the Assistant Secretary for Planning and Evaluation (ASPE) is available here. The CMS fact sheet on the drugs selected for the Medicare Drug Price Negotiation Program is available here. More information on the Medicare Drug Price Negotiation Program is available here.
• On August 31, 2023, HHS announced that the Biden Administration will award $450 million to “strengthen prevention, harm reduction, treatment, and recovery support services and crack down on illicit drug trafficking.” Of note, HRSA is delivering more than $80 million in awards to rural communities in 39 states to support key strategies to respond to the overdose risk from fentanyl and other opioids. The Centers for Disease Control and Prevention (CDC) is announcing $279 million in Overdose Data to Action (OD2A) awards to states and localities to expand harm reduction strategies, link people to life-saving care, and make the latest data available. Also, SAMHSA is awarding $57.6 million across five grant programs to connect Americans who misuse substances to recovery and treatment supports. In addition, the White House Office of National Drug Control Policy (ONDCP) announced it will award approximately $20.5 million to 164 new Drug-Free Communities (DFC) Support Program awards for Fiscal Year (FY) 2023; an additional $1 million dollars into its Real Deal on Fentanyl campaign with the Ad Council; and approximately $20.5 million to 164 new Drug-Free Communities (DFC) Support Program awards for FY 2023. The HHS news release is available here. The White House fact sheet is available here.

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