On Monday, November 13, our colleagues in the Antitrust Section published an alert on the recent FTC workshop, “Understanding Competition in Prescription Drug Markets: Entry and Supply Chain Dynamics.” The workshop, which was held on November 8, 2017, began with two keynote addresses from FTC Acting Chairman Maureen Ohlhausen and FDA Commissioner Dr. Scott Gottlieb. Both speakers focused on the beneficial effects of greater competition on prescription drug prices and signaled that the branded drug manufacturers may be discouraging generic drug manufacturers from entering the market. However, Acting Chairman Ohlhausen stated that any FTC antitrust enforcement actions in this space will be based on the specific facts of a case rather than a broad-based action against particular industry practices.

The alert goes on to summarize the content of each of the four workshop panels:

  • Panel 1: Generic Drug Competition: Understanding Demand, Price and Supply Issues
  • Panel 2: Understanding Intermediaries: Pharmacy Benefit Managers
  • Panel 3: Understanding Intermediaries: Group Purchasing Organizations
  • Panel 4: Potential Next Steps to Encourage Entry and Expand Access Through Lower Prices

Click here to read the full summary of the FTC workshop.

The release of the House and Senate GOP tax plan this month has left Washington on edge as it comes to grips with the realities of tax reform. However, the elimination of the medical expense tax deduction in the House Republicans’ tax reform package stands out above the rest as misguided. This elimination would not only affect filers using the deduction, but it also stands to have broader implications for our health care system.

ML Strategies has published a new blog post in Health Affairs on the consequences of the deduction’s removal to the Medicaid program. It can be found here.

It’s all about tax reform in Congress. This week, the House will look to pass its version of tax reform while the Senate begins marking up its package. Meanwhile, the end of the year is fast approaching and there are number of issues, including the health care minibus, that will need to be addressed. How Congress juggles the competing priorities and deadlines will be on display this week. You can read about this and more in the preview by clicking here.

The U.S. Department of Health and Human Services’ Office for Civil Rights (OCR) released its October Cybersecurity Newsletter last week with a focus on mobile devices. Given the amount of work conducted on mobile devices (odds are that at least some of you are reading this on a smart phone), the newsletter is practical for many in the health care industry. It is also timely in light of the increasing development and use of health apps. (For those developers interested in HIPAA and mobile devices, see our recent post here.)

The key HIPAA risk faced by those in the health care sector using mobile devices is the compromise of electronic protected health information (ePHI); a risk that is compounded by the portability and lack of robust security on these devices. In its newsletter, OCR advises organizations to take some important steps to ensure that ePHI is well-protected on mobile devices. According to OCR, organizations should:

  • Ensure that mobile devices are properly configured before accessing/storing ePHI
  • Train employees on the secure use of mobile devices and the risks of malware infecting mobile devices
  • Implement policies and procedures for mobile devices
  • Take certain IT-related precautions such as:
    • Automatic lock/logoff
    • Logon authentication
    • Regular software/security patch updates
    • Encryption, anti-virus and remote wipe capabilities
    • Use ONLY secure Wi-Fi connections
    • Use Virtual Private Networks (VPNs)
    • Limit downloads to only verified third-party apps

Depending on the size of your organization, some of these recommendations might sound a bit involved, but any efforts now can go a long way to saving you from a data breach. This is particularly true when considering that a breach involving health records can cost upwards of $350 per record.

The newsletter also contains links to much more detailed guidance and information for how to minimize cybersecurity risk on mobile devices.

The CHIP Reauthorization fight heads to the Senate where it faces an uncertain path forward as neither side can agree on payfors and the Senate Finance Committee focuses in on tax reform. While the Trump Administration is reportedly preparing an executive order that would eliminate the individual mandate, they are in a holding pattern to see if it gets included in the tax reform package. We cover that and more in our preview, which you can view here.

On November 1, 2017, CMS announced that it is in fact cutting Medicare Part B reimbursement for 340B drugs to the tune of $1.6 billion.  To be accurate, what CMS announced is its intent to finalize proposed rule changes to the Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Quality Reporting Program.  As part of the rule changes, CMS will be implementing, with minor tweaks, the proposal it first announced last summer to significantly reduce Medicare Part B reimbursement for 340B drugs paid to hospitals and ambulatory surgical centers.  The full text of the final rule with commentary is available now and will be published in the Federal Register on November 13th.   The reimbursement reduction, and other changes relative to 340B, are scheduled to go into effect on January 1, 2018.

The rule only impacts Medicare Part B reimbursement for 340B, and no other government or private payor reimbursement.  Still, the change will have major repercussions in the 340B world.  When the proposed rule was first announced, I posted answers to a myriad of questions about the proposal and its potential impact on 340B covered entities.  With the “rule” now in final form, I can revisit some of those questions and answers. Continue Reading CMS Finalizes Medicare Part B Reimbursement Cut for 340B – What Does it Mean?

Given the uncertainty in reimbursement from private insurance and government programs such as Medicare and Medicaid, it is important early on to consider how best to land and leverage relationships with key customers and strategic partners. As a start-up company, getting a strategic deal with a name-brand company is an excellent means to validate your technology. How do you take advantage of that opportunity, but not give away too much? This final installment in our blog series will suggest some best practices for negotiating these early stage strategic relationships. Continue Reading Building a Health App? Part 7: Commercialization and Strategic Partners

Earlier this month the House Energy and Commerce Committee’s subcommittee on Government Oversight and Investigations held its second hearing on the 340B Drug Discount Program. The hearing followed on the heels of a July 18th hearing in which officials from the Health Resources and Services Administration (HRSA), the Government Accountability Office (GAO), and the Department of Health and Human Services Office of Inspector General (HHS-OIG) testified about the challenges faced in overseeing the 340B Program.

This hearing was called Examining How Covered Entities Utilize the 340B Drug Pricing Program.  Representatives of five different covered entities were asked to address three questions in their testimony:

  • How much do 340B Covered Entities save when purchasing 340B drugs?
  • How are those savings tracked?
  • How are those savings used?

However, it was the follow-up questions from subcommittee and committee members that may indicate where Congress is headed in legislating changes to the 340B Program. Continue Reading Six Key Follow-Up Questions Asked by Congress in 340B Hearing

On October 23, 2017, a company that developed software to track and trace pharmaceuticals filed a complaint against a pharmaceutical distributors trade association that currently dominates the market for such software, alleging a conspiracy to lock up long-term contracts with customers and exclude competition in violation of the Sherman Act and the Virginia Antitrust Act.  Tracelink, Inc. v. Healthcare Distribution Alliance, Case No. 1:17-cv-01197-AJT-IDD (E.D. Va. Oct. 23, 2017). Continue Reading Pharma Distributors Trade Association Sued for Conspiracy to Exclude Competition for its Track and Trace Software

As the calendar turns to November, pressure continues to grow in Congress to pass a CHIP extension and address outstanding minibus extenders. Also on the radar is the first open enrollment period under the Trump Administration and the implications this could have for other policy issues. For the complete ML Strategies preview, please click here.