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President Trump Signs Executive Orders that Enable Access to Affordable Meds

On Friday, July 24, 2020, President Trump signed four Executive Orders concerning prescription drug pricing which collectively direct the Secretary of the Department of Health and Human Services (HHS) to take the following actions:

1. Increase Patient Access to Insulin and Injectable Epinephrine

The first Executive Order, “Access to Affordable Life-saving Medications,” directs HHS to condition future federal grants available to Federally Qualified Health Centers (“FQHCs”) under the Public Health Service Act on the FQHCs having established practices which make insulin and injectable epinephrine available for discounted prices to patients who:

  1. Have a high cost sharing requirement for these drugs;
  2. Have a high, unsatisfied deductible; or
  3. Have no health care insurance.

The intent of the Executive Order is to enable Americans who may otherwise struggle to afford these necessary medications access to them at a much lower price — comparable to what FQHCs pay through the 340B Drug Pricing Program. In other words, FQHCs would be required to pass their 304B savings onto medically underserved patients.

2. Facilitate the Importation of Certain Prescription Drugs

The President’s Executive Order, “Increasing Drug Importation to Lower Prices for American Patients,” aims at expanding access to low-cost imported drugs by directing HHS to:
(1) facilitate waivers relative to the prohibition of importation of prescription drugs,
(2) authorize reimportation as “required emergency medical care,” and (3) finalize a rule to allow importation of prescription drugs from Canada.

The Executive Order builds on the Safe Importation Action Plan issued by HHS and the Food and Drug Administration (FDA) last year, which provided two pathways to providing safe, lower cost drugs to American consumers. Under the new Executive Order, individual waivers to import drugs are permitted as long as the importation does not pose a risk to public safety.

3. Remove the Anti-Kickback Safe Harbor Protection for Prescription Rebates

President Trump’s third Executive Order, “Lowering Prices for Patients by Eliminating Kickbacks to Middlemen,” directs HHS to finalize its rule: “Removal of Safe Harbor Protection for Rebates Involving Prescription Pharmaceuticals and Certain Pharmacy Benefit Manager Service Fees,” commonly referred to as the “Rebate Rule.”

As it stands, prices that patients pay at the point-of-sale are oftentimes significantly higher than the prices that insurance companies, or the “middlemen” hired by insurance companies, actually pay for the drugs. This leads to those middlemen receiving large “rebate” checks which are, in essence, kickbacks for the heightened prices paid by Medicare patients.

In finalizing the Rebate Rule, HHS would:

  1. exclude from the safe harbor protections of the Anti-Kickback Statute certain reductions in price that are not applied at the point-of-sale or other remuneration that drug manufacturers provide to health plan sponsors, pharmacies, or PBMs in operating the Medicare Part D program; and
  2. establish new safe harbors that would permit health plan sponsors, pharmacies, and PBMs to apply discounts at the patient’s point-of-sale in order to lower the patient’s out-of-pocket costs, and that would permit the use of certain bona fide PBM service fees.

If finalized, the Rebate Rule would have the effect of collectively saving Medicare patients billions of dollars on prescription drugs.

4. Implement the “Most Favored Nation” Order to Lower Medicare Part B Drug Cost

In issuing the above Executive Orders, President Trump also announced another initiative — the “Most Favored Nation” order — which builds on his International Pricing Index (IPI) model to ensure lower cost Medicare Part B drugs that would set United States pricing at rates comparable to countries similarly situated economically.

Under the IPI model, the United States federal government would pay certain vendors directly for Medicare Part B drugs and certain physicians and hospitals administration fees for distribution.

To date, the IPI model has not been put into effect; however, President Trump indicated his intent to implement the Executive Order in late-August 2020.

The collective effect of the four Executive Orders issued by President Trump last week serves to make access to affordable medications for Americans, particularly vulnerable populations, a public health priority.

As a practical matter, however, the power of the Executive Order is limited — making the functional impact of the new directives dependent on how quickly HHS moves through the formal rule-making process.

As a result, the time frame in which the healthcare industry can expect to see systematic changes from the President’s Orders remains uncertain. In the meantime, healthcare entities should keep a watchful eye for new guidance from HHS.

Please contact BMD Health Law Attorney Jeana Singleton (jmsingleton@bmdllc.com) for questions regarding the new Executive Orders and their practical effect, or for any other healthcare questions.

New York, Kansas, Massachusetts, and Delaware Become the latest States to Adopt Full Practice Authority for Nurse Practitioners

While the COVID-19 pandemic certainly created many obstacles and hardships, it also created many opportunities to try doing things differently. This can be seen in the instant rise of remote work opportunities, telehealth visits, and virtual meetings. Many States took the challenges of the pandemic and turned them into an opportunity to adjust the regulations governing licensed professionals, including for advanced practice registered nurses (APRNs).

Explosive Growth in Pot of Gold Opportunity for Bank (and Other) Cannabis Lenders Driving Erosion of the Barriers

Our original article on bank lending to the cannabis industry anticipated that the convergence of interest between banks and the cannabis industry would draw more and larger banks to the industry. Banks were awash in liquidity with limited deployment options, while bankable cannabis businesses had rapidly growing needs for more and lower cost credit. Since then, the pot of gold opportunity for banks to lend into the cannabis industry has grown exponentially due to a combination of market constraints on equity causing a dramatic shift to debt and the ever-increasing capital needs of one of the country’s fastest growing industries. At the same time, hurdles to entry of new banks are being systematically cleared as the yellow brick road to the cannabis industry’s access to the financial markets is being paved, brick by brick, by the progressively increasing number and size of banks that are now entering the market.

2021 EEOC Charge Statistics: Retaliation & Impact of Remote Work

The U.S. Equal Employment Opportunity Commission (EEOC) released its detailed information on workplace discrimination charges it received in 2021. Unsurprisingly, for the second year in a row, the total number of charges decreased as COVID-19 either shut down workplaces or disconnected employees from each other. In 2021, the agency received a total of approximately 61,000 workplace discrimination charges - the fewest in 25 years by a wide margin. For reference, the agency received over 67,000 charges in 2020, and averaged almost 90,000 charges per year over the previous 10 years.

Ohio’s Managed Care Overhaul Delayed – New Implementation Timeline

At the direction of Governor Mike DeWine, the Ohio Department of Medicaid (ODM) launched the Medicaid Managed Care Procurement process in 2019. ODM’s stated vision for the procurement was to focus on people and not just the business of managed care. This is the first structural change to Ohio’s managed care system since the Centers for Medicare & Medicaid Services' (CMS) approval of Ohio’s Medicaid program in 2005. Initially, all of the new managed care programs were supposed to be implemented starting on July 1, 2022. However, ODM Director Maureen Corcoran recently confirmed that this date will be pushed back for several managed care-related programs.

Laboratory Specimen Collection Arrangements with Contract Hospitals - OIG Advisory Opinion 22-09

On April 28, 2022, the Department of Health and Human Services, Office of Inspector General (“OIG”) published an Advisory Opinion[1] in which it evaluated a proposed arrangement where a network of clinical laboratories (the “Requestor”) would compensate hospitals (each a “Contract Hospital”) for specimen collection, processing, and handling services (“Collection Services”) for laboratory tests furnished by the Requestor (the “Proposed Arrangement”). The OIG concluded that the Proposed Arrangement would generate prohibited remuneration under the federal Anti-Kickback Statute (“AKS”) if the requisite intent were present. This is due to both the possibility that the proposed per-patient-encounter fee would be used to induce or reward referrals to Requestor and the associated risk of improperly steering patients to Requestor.