Weekly Washington Healthcare Update - September 08, 2015

Author:Ms Stephanie Kennan, Charlyn A. Iovino and Amanda Anderson
Profession:McGuireWoods LLP

This Week: Centers for Medicare and Medicaid Services Releases 2017 State Essential Health Benefit Plans... Health Resources and Services Administration Releases Draft Guidance on 340B Drug Program... Internal Revenue Service Proposed Rule Mandates Employer Health Plans Offer Hospital and Physician Services.



    District Work Period: Aug. 3-Sept. 7


    District Work Period: Aug. 5-Sept. 7


    Food and Drug Administration (FDA) Releases Draft Guidance on Orphan Drug Development

    To assist companies that make drugs intended to treat or prevent rare diseases, the FDA released draft guidance in conducting more efficient and successful development programs.

    Specifically, the guidance addresses the important aspects of rare disease drug development, including: adequate description and understanding of the disease's natural history; adequate understanding of the pathophysiology of the disease and the drug's proposed mechanism of action; nonclinical pharmacotoxicology considerations to support the proposed clinical investigation or investigations; reliable endpoints and outcome assessment standard of evidence to establish safety and effectiveness; and drug manufacturing considerations during drug development. FDA notes in the draft that all drug sponsors face similar issues in the drug development space, but given the limited medical experience with rare diseases, these challenges are difficult to address in the orphan drug space. FDA will accept public comments on the draft guidance document until Oct. 16, 2015.

    Food and Drug Administration (FDA) Draft Guidance on Biosimilar Naming

    FDA released draft guidance on Aug. 27 entitled "Nonproprietary Naming of Biological Products" that proposes to add FDA-designated four-letter suffixes to the names of both biosimilars and the brand biologics they reference.

    How biosimilars will be named has been a contentious issue. Proponents of biosimilars, pharmacy benefit managers and insurers want the biosimilar products to have the same nonpropriety name as their branded counterparts. However brand biologic companies say different names are necessary to track safety issues with biosimilars.

    The FDA says that while shared nonproprietary names are not appropriate for all biological products, there is a need to clearly identify biological products to improve pharmacovigilance, and to clearly differentiate among biological products that have not been determined to be interchangeable.

    The agency is asking for comments on whether interchangeable biosimilars should share the same suffix as their reference products or have their own separate suffixes. FDA is also looking for feedback from stakeholders concerning the following scenario: Should the World Health Organization (WHO) adopt a biological qualifier proposal, how should drugs be considered in the determination of FDA-designated proper names. In addition to the draft guidance, the FDA suggested there might be a new rule to rename six biologic products to be in line with the naming scheme outlined in the draft guidance. This would include Sandoz's filgrastim-sndz, the first approved biosimilar in the U.S.

    Health Resources and Services Administration (HRSA) Releases Draft Guidance on 340B Drug Program

    HRSA published proposed draft guidance on the 340B drug discount program in the Aug. 28 Federal Register. That program provides drugs to qualified entities at a discount. HRSA stated that the goal of the guidance is to strengthen program integrity while 340B providers could remain able to carry out the intent of the program. In the guidance, HRSA proposes a number of clarifications including the definition of a 340B patient, contract pharmacy arrangements, audit procedures and other provisions.

    The proposed guidance follows a Government Accountability Office recommendation to provide a clear patient definition. Under the definition, the number of drugs that would qualify for 340B could decrease because the guidance says patients must be outpatients while receiving care. That means discharge prescriptions provided after an inpatient hospital stay may not be eligible for the 340B program. The guidance also states that the individual will not be considered a patient of the covered entity if the only health care delivered to the individual is the infusion of a drug or the dispensing of a drug. This would reduce inappropriate 340B drug use during referrals, but may hurt community health centers where much of the specialty care is provided on a referral basis. In addition, the guidance stated that the 340B program should not serve as a general pharmacy benefit for 340B providers.

    Many stakeholders had disagreed on fines and how to treat entities that had violated the 340B program rules. Under the proposed guidance, a provider that is removed from the program because it failed to retain records could re-enroll in the program during the next regular registration period after the provider demonstrates that it can comply with the program's requirements. The guidance also proposes a notice and hearing process for 340B providers to respond to audits that could lead to the loss of program eligibility.

    The comment period will be open for public comment through Oct. 27, 2015.

    Centers for Medicare and Medicaid Services (CMS) Releases 2017 State Essential Health Benefit Plans

    On Aug. 28, CMS released essential health benefit (EHB) benchmark plans for all 50 states and the District of Columbia. The list of each state's required benefits has been compiled to help states and issuers determine which state-required benefits must be included in plan designs. The Affordable Care Act (ACA) requires nongrandfathered health plans in the individual and small group markets to cover essential health benefits (EHB), which include items and services in the following 10 benefit categories: (1) ambulatory patient services; (2) emergency services; (3) hospitalization; (4) maternity and newborn care; (5) mental health and substance use disorder services including behavioral health treatment; (6) prescription drugs; (7) rehabilitative and habilitative services and devices; (8) laboratory services; (9) preventive and wellness services and chronic disease management; and (10) pediatric services, including oral and vision care. For plan year 2017 and beyond, the EHB benchmark plan is a plan that was sold in 2014.

    States' EHB benchmark plans, plan summaries and prescription drug coverage requirements can be found here.

    Centers for Medicare and Medicaid...

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