Tag Archives: health care

D.C. District Court Limits Discounts to Orphan Drugs

On October 14, 2015, Judge Rudolph Contreras of the District Court for the District Court of Columbia sided with drugmakers in a decision that narrowed the scope of 340B, a popular but controversial drug discount program. The decision effectively bars children’s hospitals, cancer hospitals, and rural hospitals from obtaining 340B discounts for so-called “orphan” drugs like Prozac.

The plaintiffs in the case, Pharmaceutical Research and Manufacturers of America (“PhRMA”), is a lobbying group comprised of 48 of the nation’s pharmaceutical heavyweights, including Novartis and Pfizer. PhRMA challenged an HHS Interpretive Rule, which would have expanded the scope of the drug discount program. PhRMA argued that the agency’s Interpretive Rule contravenes the plain language of 340B. Judge Contreras agreed.

Background to 340B and the Disputed Interpretive Rule

At the heart of this dispute are high-demand “orphan” drugs like Prozac. Orphan drugs are drugs developed to treat a rare disease or condition; the rare disease or condition is the “orphan” use. But, by and large, orphan drugs are more well-known for their non-orphan uses. In the case of Prozac, the drug’s designated orphan use is autism and certain types of body dysmorphic disorders. Yet most patients and providers use Prozac as a treatment for depression.

When the Affordable Care Act was passed, Congress significantly expanded the types of covered entities that would be eligible for 340B program discounts. The ACA added children’s hospitals, freestanding cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals to the 340B drug pricing program. The newly covered entities, however, are excluded from certain types of 340B program discounts.

Under 340B(e), newly covered entities do not have access to discounts for a “drug designated . . . for a rare disease or condition.” Pharmaceutical companies and providers disagreed over the scope of 340B(e). Pharmaceutical companies argued for a broader interpretation and insisted that the provision refers to all types orphan drugs.

To clarify the confusion, HHS issued an interpretive rule on July 23, 2014. Under the Interpretive Rule, drugmakers must offer orphan drugs at a discount to newly-covered entities when the covered entity purchases the drug for a non-orphan use. In the Prozac example, that means a covered entity like a rural hospital could get a discount on Prozac when purchasing the drug for depression (a non-orphan use), but not for autism (the designated orphan use). Drugmakers that fail to comply and refuse to offer the discount price must provide a refund to the covered entity for the overcharge.

D.C. District Court Applies Chevron Test, Vacates HHS Ruling

The court vacated HHS’s Interpretive Ruling, finding that it failed the Chevron test. Under the first prong of the Chevron test, the question is whether Congress has directly spoken on the precise question at issue. If so, the agency must follow the intent of Congress as clearly expressed in the statute. If the congressional intent is unclear, the court proceeds to the second step of the Chevron analysis to determine whether the agency’s ruling is “based on a permissible construction of the statute.”

In this case, Judge Contreras concluded Congress’s intent was clearly expressed in 340B(e) and its related statutory provisions, and that the second part of the Chevron analysis was unnecessary.

The court held in favor of the pharmaceutical company and rejected HHS’s Interpretive Rule.

After concluding that the Interpretive Rule failed the first prong of the Chevron analysis, the Court vacated the Interpretive Rule as “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” In effect, the D.C. District Court’s decision signals a victory for pharmaceutical companies who now do not have to provide orphan drugs at a discount for newly-covered entities like children’s hospitals and rural hospitals.

Experts Foresee Legal Attacks on Other Parts of Drug Discount Program

HHS can still appeal. In the meantime, legal experts weighed in on Law360 and predicted that the decision could encourage drugmakers to lodge additional lawsuits on other parts of the 340B program. In particular, the pharmaceutical industry has railed against the “mega-guidance” that HHS released in August 2015 for the drug pricing program. The omnibus guidance is still in the note and comment process, with the current 60-day comment period ending on October 27, 2015.

Lawyers speculate that this decision leaves the omnibus guidance vulnerable to legal attack. Based on this decision, pharmaceutical companies can challenge the mega-guidance in court as soon as it is finalized, before HHS even attempts any type of enforcement. As Kristi Kung of Pillsbury Winthrop Shaw Pittman stated, “The court here found that the agency didn’t actually have to take an enforcement action against a manufacturer for there to be [a lawsuit].”

Reactions from Providers Underscore Deep Disappointment, Concern Over Access

The District Court decision struck a deep nerve among hospitals and providers. Immediately after the decision was released, the American Hospital Association (AHA) released a statement expressing its deep disappointment.

“This decision comes at a steep cost for the vulnerable patients cared for by rural and cancer hospitals,” AHA stated. “[The decision] will reduce access to critical services and treatments for some of the most vulnerable patients in society. Sadly, the biggest beneficiary of this ruling is the pharmaceutical industry – it does nothing to help either patients or taxpayers.”

The American Society of Health System-Pharmacists (ASPH) similarly stepped out in opposition of the decision. In its own statement, ASPH pointed out the adverse effects of the decision on access to care. According to ASPH, “this ruling will limit access to critical medications for the sickest patients in our healthcare system. . . . Without access to these discounts, participating hospitals may not be able to absorb the cost of providing care to patients who otherwise would not be able to afford it.”

In an interview with Modern Healthcare, the National Rural Health Association agreed, adding that the decision might cause rural hospitals to pass some orphan drug costs onto patients and could lead to some hospitals not stocking certain medications.

The overwhelming reaction against the decision is clear: the D.C. District Court decision creates public policy implications which cut off access to affordable care. By rejecting HHS’s orphan drug discount rule, this decision strongly disadvantages the same patients from underserved areas which the Affordable Care Act meant to assist.

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Pharmaceutical Company Preemptively Files Free Speech Suit Against The FDA

By: Nawa Arsala

Free speech is fundamental to the fabric of the United States. Americans fight for it zealously, regardless of the context, from political contributions to cartoon drawing contests. This battle has extended to the pharmaceutical industry. In an unconventional move, a small, Dublin-based pharmaceutical company, Amarin, filed suit against the Food & Drug Administration arguing that it has a constitutional right to share certain information about its product with doctors for unapproved uses.

The FDA approved Amarin’s drug Vascepa in 2012. It is a prescription form of fish oil that is used along with a low-fat and low-cholesterol diet, to lower high levels of triglycerides (fats) in adults, which is linked to heart disease. After the drug’s approval, Amarin requested permission to give doctors information regarding a study that showed Vascepa can reduce the triglyceride levels in less-severely affected patients, not just high-risk patients. The FDA ultimately rejected their request. Amarin’s issue is that many doctors already prescribe Vascepa to patients who do not have abnormally high triglyceride levels. The discretion of the physician to prescribe for an off-label use is perfectly legal and has been deemed the practice of medicine, which the FDA does not have jurisdiction to regulate. Manufacturers on the other hand, cannot promote for off-label uses.

Amarin wants to send doctors clinical trial data they described as “supportive but not conclusive research” that their drug could reduce the risk of heart disease in patients with less severe conditions than were initially approved for. The FDA denied Amarin’s request to share this information with doctors, and Amarin filed their suit. The FDA found that the “hypothesis that a triglyceride-lowering drug significantly reduces the risk for cardiovascular events among” individuals with less severe symptoms, failed to be proven in clinical trials. Nonetheless, Amarin feels its First Amendment right is being infringed upon by not being able to share this use with doctors. Amarin has not been accused of wrong-doing by the FDA yet, but they are possibly the first pharmaceutical company to sue the FDA preemptively. This could be because dietary supplement forms of fish oil are legally permitted to make the same statement without such rigorous regulation by the FDA. However, there seems to be increased regulation of dietary supplements as well after several injuries have been reported using weight loss supplements.

In a private letter to physicians who are paid to speak on behalf of its company, Amarin writes, “if we receive a judgement in our favor, we will move rapidly to deliver to you additional Company-approved training and updated promotional speaker materials related to the court’s interpretation of free speech related to the ANCHOR results.” In reality, free speech is not as romantic as the founding fathers would have hoped, especially in closely regulated markets such as the pharmaceutical industry. Courts consider several factors in determine if the government is infringing on First Amendment rights including, whether a substantial governmental interest being asserted, whether the regulation directly advances that interest and whether it is not more extensive than necessary.

Amarin may look to a fairly recent case in which a pharmaceutical sales representative’s conviction was overturned because the information he shared was not false or misleading. As a matter of fact, Amarin’s attorney ascertains precisely that, that the clinical trial data is truthful and not misleading. The U.S. Department of Justice and State attorney generals have increasingly used the Federal False Claims Act as an enforcement mechanism against health care fraud. The government believes that by promoting off-label uses, the manufacturers caused pharmacies to falsely claim Medicaid payment for drugs in ways unapproved by the FDA. Amarin is at risk for violating the FCA if they proceed in sharing the data directly to the doctors.

Drugs have and continue to save countless lives. The FDA has the duty, through a rigorous preapproval process, to ensure drugs are safe and effective before they are on the market. However, it is the stance of Amarin, that since off-label usage is already so commonplace by physicians and legal, providing more information, rather than less, is safest for the patient to promote overall health and more informed decision-making by physicians.

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Pentagon Reviewing Care for Veterans Exposed to Chemical Weapons

An October investigation by the New York Times (NYT) has led the Pentagon to review and adjust how it cares for veterans returning from tours in Iraq who believe they were exposed to chemical weapons.  The NYT investigation notes that between 2004 and 2011, American and American-trained Iraqi troops “repeatedly” found chemical weapons and were even wounded by them on “at least” six occasions.  All told, the report states that 5,000 chemical warheads, shells or aviation bombs were found in that time.  It also noted that secrecy was needed regarding the discoveries.  Secrecy surrounding the missions, however, may have put a number of military service personnel at risk as they were not aware of the threat these old munitions were to their health. Also, they were not allowed to discuss with military doctors the nature of their injuries and thus could not receive the proper treatment.

In 2004, the Army sent out instructions for the treatment of exposed soldiers which included collection and analysis of blood and urine samples for all potentially exposed soldiers followed by annual, long-term follow-up appointments – coordinated by the Deployment Health Clinical Center at Walter Reed Army Medical Center – for those who had indeed been exposed.  In addition, incidents of exposure were to be recorded and reported by Command Surgeons and a database maintained by the US Army Center for Health Promotion and Preventative Medicine.  However, the original NY Times investigation uncovered veterans who were never given blood and urine tests, told their symptoms were from something else, and returned to duty before their symptoms were over.  Furthermore, the long-term care they were promised was never followed up on.

Defense Secretary Chuck Hagel moved quickly to correct these issues.  Shortly after the investigation, which only mentioned 17 American service members that were exposed, he ordered an internal review of Pentagon records, specifically the collection of “post deployment health assessments” held by the Army’s Public Health Command.  In a statement following that review, the Pentagon now says that more than 600 American service members reported exposure to chemical weapons in Iraq according to the surveys filled out by troops returning from combat tours.   In the survey, they specifically ask the question “Do you think you were exposed to any chemical, biological and radiological warfare agents during this deployment?”  The Army surgeon general’s office said that 629 of these surveys were affirmative for this question.

The Army and Navy have both made statements that the examinations promised to long-term veterans will start to be available in early 2015.  Furthermore, because the previous policy of secrecy created a lack of records of exposure, the military will be reaching out to units that were possibly exposed to try and find all of the affected veterans.  Finally, there will be a hotline for veterans to call who believe they were exposed to chemical weapons.  Hopefully as the secrecy fades away and outreach continues – these veterans can get the help they need.

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How the NFIB v. Sebelius Ruling Will Increase the Amount of Uninsured under the ACA

In a March 2012 report, the Congressional Budget Office (CBO) estimated that by 2022, the Patient Protection and Affordable Care Act (ACA) would reduce the number of nonelderly people without health insurance by 33 million, leaving another 27 million still uninsured.  A significant part of that 33 million included the 17 million more people the CBO estimated to qualify for Medicaid by 2022 under the ACA.  They had not previously qualified because the ACA increased the eligible income to those making up to 138% of the Federal Poverty Level.  This increase in eligibility would have been implemented by making all federal Medicaid dollars given to the states contingent on states increasing the pool of eligible individuals.

On June 28th, the Supreme Court ruled in National Federation of Independent Business v. Sebelius, however, that the federal government could not withhold current levels of Medicaid funding to force the Medicaid expansion.  Instead, it could only withhold the additional funds it planned to give out, making the Medicaid expansion optional state-by-state.

Based on the Sebelius ruling, the CBO reworked its estimates in a July 2012 report that concluded, because of the Supreme Court ruling, six million fewer people would qualify for Medicaid than previously estimated. Of those six million, however, an additional three million would qualify for the new exchanges.  Therefore, the net loss of insured people thanks to the Supreme Court ruling was three million.  In updating their numbers, the CBO did not attempt to guess which states would or would not expand their Medicaid program, but attempted to “reflect an assessment of the probabilities of different outcomes…and are, in their judgment, in the middle of the distribution of possible outcomes.”

These figures are being discussed again because of a June 2013 study by HealthAffairs, which did attempt to guess state-by-state who would be expanding their Medicaid programs and its affect on the uninsured.  They note that, after the Supreme Court decision, 14 states had announced their intent to opt-out of the expansion, six were undecided, three were leaning against the expansion, and two were leaning toward the expansion.  They found that if all currently undecided states opted in, 29.8 million people would remain uninsured by 2016 (compared to 26 million people uninsured according to the CBO by the same year).  That number would rise to 31 million if all of the undecided states opted out.  They also note that around 80% of those uninsured would be US citizens, and no matter which way the undecided states go, 4.3 million children and 1 million veterans would likely remain uninsured.

As of a September 17, 2013 a report by the Advisory Board Company found that the number of undecided and not participating states had increased. They found 15 (up from 14) states firm in opting out of expansion, seven (three) leaning against expansion, five (six) undecided or exploring an alternative model, four (two) leaning towards expansion, and overall 20 (25) firmly participating.  Therefore, the percentage of states that could be opting out has increased from 34-46% to 44-54% of states.  This will in turn increase the number of uninsured people.  As the merits of the ACA continue to be debated on Capitol Hill in light of the budget debate, and more states become firm in their plans to opt-in or opt-out of the Medicaid expansion, the number of those who are ultimately uninsured could rise and continue to undermine the goal of universal health care.


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Breast Pumps For All, But Not Necessarily The Best

The ACA requires insurance companies to provide new mothers with breast pumps and other equipment that is necessary to help them breast feed.

Unfortunately, the law doesn’t specify the type or quality of the breast pumps to be provided, so the companies (with doctors’ recommendations) get to decide. This issue leads to whether a company will provide a manual or an electric pump.

The benefits of an electric pump over a manual pump are several: they’re high-powered and can simulate a nursing child, while manual pumps can be weak, clumsy, and cumbersome for a working mother to use. They take more time to pump than an electrical pump.

The costs are also considerably different, when a high-end electric pump coming in at around $300, and a manual pump costing as little as $35.

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