HealthCare Roundtable e-News – December 18, 2018

Federal Court Strikes Down Obamacare, Creating Uncertainty

A Texas federal district court struck a blow to Obamacare late last Friday after Judge Reed O’Connor declared that the Affordable Care Act’s individual mandate requiring people to have health insurance “can no longer be sustained as an exercise of Congress’s tax power.” The ruling came after a lawsuit was filed by a group of state attorneys general and Republican governors earlier this year. 

Many legal experts have shared their doubts on whether the decision will make it through the Fifth Circuit Court of Appeals. University of Michigan law professor Nicholas Bagley wrote on Twitter, “The Fifth Circuit is unlikely to take this frivolous case seriously, and the case will die without Supreme Court having to intervene.” 

Texas Attorney General Ken Paxton, who initiated the lawsuit, applauded the decision, stating, “Today’s ruling enjoining Obamacare halts an unconstitutional exertion of federal power over the American health care system.” Others who had opposed the ruling have also spoken out; in particular Xavier Becerra, the California attorney general, who called the ruling “an assault on 133 million Americans with pre-existing conditions, on the 20 million Americans who rely on the ACA’s consumer protections for health care, on America’s faithful progress toward affordable health care for all Americans.” 

CMS followed up with the case decision by reminding Americans the exchanges are still open for business and will continue with open enrollment, which is slated to end Saturday (Dec. 15) for states using healthcare.gov. (InsideHealthPolicy)

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Brady Pushes for ACA Tax Delays as Part of Revised Year-End Package

House Ways and Means Committee Chairman Kevin Brady (R-TX) released a revised year-end package last Monday (Dec. 10) with several provisions calling for tax relief for natural disaster victims and delays or repeals several ACA-related taxes, including the medical device tax, health insurance tax and “Cadillac” tax. Brady’s “tweaked” version of the ACA would add $52 billion to deficits over the next decade, with the total cost of the new package adding up to $80 billion.

The outgoing Chairman told reporters he hopes the bill will pass before the end of the year, though lobbyists are saying the legislation is a last-minute attempt that is unlikely to pass before Democrats take control of the House in 2019. (InsideHealthPolicy).

The Senate has indicated little interest in considering the health care legislation before the year wraps up.

“It’s been rejected over and over,” said David L. Thompson, vice president of public policy at the National Council of Nonprofits. “This doesn’t have public support, or Senate support.”

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House Passes and Senate Now Considers Medicaid Package

Last Tuesday (Dec. 11), the House passed the bipartisan Improving Medicaid Programs and Opportunities for Eligible Beneficiaries (IMPROVE) Act. It now moves to the Senate for consideration during the final days of the lame duck session. 

The bill includes a package of Medicaid bills sponsored by Rep. Joe Burton (R-TX) that outlines new penalties for drugmakers and legislation supporting the Advancing Care for Exceptional (ACE) Kids Act, an initiative that supports the improvement of care for children on Medicaid with complex medical conditions.

The ACE Kids Act was passed with the support of the House Energy and Commerce Committee, which uses a health home option in its statute to create specially designed health homes for children with medical challenges to improve their quality of life and reduce Medicaid spending.

Senators Chuck Grassley (R-IA) and Ron Wyden (D-OR) co-sponsored a version of the overcharge bill, which would allow HHS to fine companies that knowingly misclassify their branded products as generics for lower rebate payments. Both are hopeful that the Senate will pass the bill before the end of the calendar year.

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FDA Withdraws Controversial Generic Drug Labeling Rule

The FDA withdrew its controversial proposal last Thursday (Dec. 13), that was conceived to allow generic drugmakers to update drug labels with new information independent of labeling changes. The rule, first proposed in 2013, would have allowed abbreviated new drug application (ANDA) holders for generic drugs to independently update and redistribute product labeling to reflect newly acquired safety-related information.

According to FDA, the rule was intended to improve communication of newly acquired drug safety information to healthcare providers and the public, as well as hold generic drug companies liable for the side effects of medications if drug safety information listed was not up-to-date. Currently by law, generic drug companies must follow the labels written by the brand-name companies.

Generic drug companies and lobbyists had argued the labeling rule would impose burdens on industry, in turn causing generic drug prices to rise and potentially affecting patient access to generic drugs. (InsideHealthPolicy).

“This could potentially lead to patient and provider confusion. It runs contrary to the goals of the generic approval process, which requires generic medicines to have the same label as the reference listed drug,” FDA Commissioner Scott Gottlieb and drug center director Janet Woodcock say.

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FDA Announces Plan to Develop Cheaper Generic Alternatives by Reclassifying Certain Biologics

The FDA is looking to identify ways to reclassify insulin, growth hormones and other biological substances in a plan announced by the agency last week. These substances, which are currently classified as drugs, will instead be classified as biologic products as part of the FDA’s plan to encourage more generic competition and enable makers of lookalike biosimilars to create cheaper alternatives to branded biologics.

“There are currently no approved insulin products that can be substituted at the pharmacy level. One reason is that it was hard to bring a substitutable generic insulin to the market under the conventional drug pathway. The biosimilar pathway should make this kind of competition more accessible,” said FDA Commissioner Scott Gottlieb.

The FDA’s plan follows Congress’ direction from the Biologics Price Competition and Innovation Act of 2009 for the FDA to explore options to reclassify the substances with a deadline of 2020. The plan is also part of an effort for the agency to police instances of drugmakers withholding branded stock from biosimilar makers, and to reassure drugmakers that REMS programs will not be violated in the process.

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