Health Law Advisor

On May 11, the U.S.  Senate Committee on Health, Education, Labor and Pensions (the “HELP Committee” or the “Committee”) passed a bipartisan bill to expand federal regulation of pharmacy benefit managers (“PBMs”) for group health plans.[1]  As a compromise by Health Sub-Committee Chair Bernie Sanders (I-VT) and ranking Republican Bill Cassidy (LA), the Pharmacy Benefit Manager Act (S. 1339) reflects the overarching legislative push by members from both sides of the aisle and chambers of Congress to address drug pricing issues through federal fixes to the PBM framework . Further, Congress’ efforts build on the momentum from the enactment of the high-profile Medicare prescription drug pricing provisions of the Inflation Reduction Act (the “IRA”) in 2022. [2]

On February 24, 2023, the Drug Enforcement Agency (“DEA”) announced proposed permanent rules around prescribing controlled substances via telemedicine that expand the circumstances under which practitioners can prescribe controlled substances without first conducting an in-person medical evaluation of the patient outside of the COVID-19 public health emergency (“PHE”). The proposed rules are more restrictive than the DEA emergency waivers under which providers conducted telemedicine prescribing for the last three years, but are less restrictive in comparison to the pre-PHE regulations applicable to telemedicine prescribing of controlled substances under the federal Controlled Substances Act (“CSA”).

Both the proposed rules related to telemedicine prescribing of Schedule III-V non-narcotic controlled substances, and the separate proposed rules related to telemedicine prescribing of buprenorphine, were published in the Federal Register on March 1, 2023. The public has been given until March 31, 2023 to review and provide comments regarding the proposed rules, which the DEA will consider before promulgating final regulations.

On April 21, 2020, the Drug Enforcement Administration (DEA) published a Request for Information (“RFI”) that reopened the comment period for an interim final rule that was published March 31, 2010 (75 FR 16236) (the “2010 IFR” or the “IFR”). The IFR is being revisited in response to the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) mandate for the DEA to update the requirements for the biometric component of multifactor authentication with respect to electronic prescriptions of controlled substances. Prior to the 2010 IFR, the only way that controlled substances could be prescribed was in writing, on paper with a wet signature. The IFR was the first time that an electronic alternative was made available for prescribing controlled substances and the DEA leveraged the technologies that were available at the time to ensure that electronic prescribing applications could not be misused to divert controlled substances.

To that end, the DEA fashioned their regulations to include measures that ensure that the prescriber verifies that they are who they said they are and that they are authorized and have the appropriate credentials to prescribe the medications that are being ordered. In other words, in order for a prescriber to be granted access to the technologies that would create, sign and transmit prescriptions for controlled substances electronically, they have to be appropriately authenticated and credentialed. In addition to requiring identity proofing and logical access controls that relied on multi-factor authentication, credentialing had to be conducted by federally approved credential service providers (CSPs) or by certification authorities (CAs). The IFR also included requirements for audit trails, security event reporting and provisions that governed the signing and transmission of electronic prescriptions to ensure that there was a process to address and resolve transmission failures.

While the IFR contemplated using biometrics to identify and authenticate prescribers, those technologies were still developing and evolving in 2010. Recently, under the SUPPORT Act, Congress required the DEA to update its regulations to identify the biometric component of the multi-factor authentication used to identity proof prescribers. The DEA is looking to the health care provider community who are currently using e-prescribing applications to share their experiences, offer suggestions and recommend new approaches that will encourage broad adoption for e-prescribing for controlled substances while still meeting the DEA’s objectives of ensuring the security and accountability necessary to identify fraud and prevent diversion.

On November 30, 2018, the Department for Health and Human Services (“HHS”) Health Resources and Services Administration (“HRSA”) will publish its final rule to change the effective date for its 340B Drug Pricing Program ceiling price and manufacturer civil monetary penalty final rule to January 1, 2019.

After two years of proposed rulemaking, HHS published a final rule on January 5, 2017 outlining requirements of manufacturers to calculate the 340B ceiling price for a covered outpatient drug and the process by which HRSA can levy civil monetary penalties on drug ...

On October 10, 2018, President Donald Trump signed into law the “Know the Lowest Price Act” and the “Patients’ Right to Know Drug Prices Act,” which aim to improve consumer access to drug price information by banning gag clauses. The Trump administration previously announced its intention to enact this legislation in its May 2018 Blueprint to Lower Drug Prices and Reduce Out-of-Pocket Costs and will likely point to these new federal laws as affirmation of its commitment to drug pricing reform that favors patients and consumers.

These bills—one of which applies to ...

The Centers for Medicare and Medicaid Services (“CMS”) issued on April 2, 2018, an advanced copy of the final rule title “Medicare Program; Contract Year 2019 Policy and Technical Changes to the Medicare Advantage, Medicare Cost Plan, Medicare Fee-for-Service, the Medicare Prescription Drug Benefit Programs, and the PACE Program” (“Final Rule”). This Final Rule will be published in the April 16, 2018 issue of the Federal Register.

This Final Rule implements provisions of the proposed rule that CMS released titled “Medicare Program; Contract Year 2019 Policy and ...

Over the past week, the White House administration (the “Administration”) has issued two documents addressing drug pricing. First, on February 9, 2018, the White House’s Council of Economic Advisers released a white paper titled “Reforming Biopharmaceutical Pricing at Home and Abroad” (the “White Paper”).  Second, on February 12, 2018, the Administration issued its 2019 Budget Proposal (“2019 Budget”).

Whereas the recommendations set forth in the White Paper are more conceptual or exploratory, the 2019 Budget purportedly reflects the ...

On November 1, 2017, the Centers for Medicare & Medicaid Service ("CMS") released the Medicare Hospital Outpatient Prospective Payment System ("OPPS") final rule ("Final Rule"), finalizing a Medicare payment reduction from Average Sales Price ("ASP") + 6% to ASP - 22.5%, for 340B discounted drugs in the hospital outpatient setting, as was proposed in the OPPS proposed rule earlier this year. This payment reduction is effective January 1, 2018, and would primarily impact disproportionate share hospitals, rural referral centers, and non-rural sole community hospitals.

340B ...

On Wednesday, October 14, 2015, the U.S. District Court for the District of Columbia (the "Court"), Judge Rudolph Contreras, vacated the Health Resources and Services Administration's ("HRSA") interpretive rule on Orphan Drugs ("the Interpretative Rule") as "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."^[1]  As a result of the ruling, pharmaceutical manufacturers are not required to provide 340B discounts to certain types of covered entities for Orphan Drugs, even when the drugs are prescribed for uses other than to treat the rare ...

The Health Resources and Services Administration ("HRSA") issued a notice proposing guidance under the 340B Drug Pricing Program.  The proposed Omnibus Guidance was issued in pre-publication format and is available online at https://s3.amazonaws.com/public-inspection.federalregister.gov/2015-21246.pdf.  The notice is scheduled to be published in the Federal Register on August 28, 2015 and will be available at https://www.federalregister.gov/articles/2015/08/28/2015-21246/guidance-340b-drug-pricing-program-omnibus.

HRSA intends to finalize the proposed ...

By Alan J. Arville, Constance A. Wilkinson and Selena M. Brady

The House of Representatives Energy and Commerce Committee ("the Committee") circulated draft language to include in its 21^st Century Cures legislation earlier this week to reform the 340B drug discount program (the "340B Program"). Although the draft 340B language was pulled from the legislation yesterday, the language proposed provides insight into what future legislative reform may include. The draft language, if adopted, would have a substantial impact on all 340B Program stakeholders, including, covered ...

On March 24, 2015, the House of Representatives Energy and Commerce Health Subcommittee^[1] (the "Subcommittee") held a 340B Program hearing with testimony from the Deputy Administrator of Health Resources and Services Administration ("HRSA"), the Director of the Office of Pharmacy Affairs ("OPA") of HRSA,[2] the Director of Health Care of the Government Accountability Office ("GAO"), and Assistant Inspector General of the Office of Evaluation and Inspection of the U.S. Department of Health and Human Services ("HHS") Office of Inspector General ("OIG").

The purpose of the ...

On November 13, 2014, the Health Resources and Services Administration ("HRSA") announced its plans to abandon the much anticipated "mega-reg" amid questions concerning HRSA's rule-making authority.  The "mega-reg" was expected to provide much needed clarity to the 340B drug discount program (the "340B Program") by addressing, among other things, the definition of an eligible patient, compliance requirements for contract pharmacy arrangements, hospital eligibility, and criteria for hospital off-site facilities.

HRSA submitted draft regulations to OMB in April 2014 ...

By Constance Wilkinson, Alan Arville, and Jonathan Hoerner

On July 23, 2014, the Health Resources and Services Administration ("HRSA") issued an "interpretive rule" entitled "Implementation of the Exclusion of Orphan Drugs for Certain Covered Entities under the 340B Program" (the "Interpretive Rule").[1] The Interpretive Rule follows the ruling by the U.S. District Court for the District of Columbia on May 23, 2014, that vacated the final rule previously released by HRSA on the treatment of orphan drugs under the 340B program (the "Final Rule").[2]

By way of background, the 340B ...

By Alan J. Arville

Last week, the 2014 340B Coalition Winter Conference was held in San Diego, California (the "Winter Conference"), where representatives from the Health Resources and Services Administration ("HRSA") of the United States Department of Health and Human Services ("HHS"), the Office of Inspector General ("OIG") of HHS, and industry stakeholders (including Epstein Becker Green) presented on current developments with the 340B drug discount program (the "340B Program"). A brief summary of the 340B Program, including contract pharmacy arrangements, can be found ...

By Constance Wilkinson, Alan Arville, and David Gibbons

The U.S. Department of Health and Human Services ("HHS") Office of Inspector General ("OIG") released a Report [1] on February 5th based on in-depth interviews with a sample of thirty 340B Covered Entities – half were disproportionate share hospitals ("DSH") and half were community health centers ("CH") – and eight contract pharmacy administrators to gain a better understanding of how contract pharmacy arrangements operate under the 340B Drug Discount Program, codified as Section 340B of the Public Health Service Act ...