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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.

Families First Coronavirus Act (“FFCRA”) Under Attack

In response to the COVID-19 global pandemic, the Families First Coronavirus Act (“FFCRA” or “the Act”) went into effect on April 1, 2020 followed closely behind by the Department of Labor’s (“DOL”) Final Rule on the Act which, collectively, describe the obligations of employers as well as the rights of employees under the FFCRA’s paid sick time and expanded family medical leave provisions.

Lockdowns, Landlords, & Litigation: Abercrombie & Fitch Flips The Script on Simon Property Group Inc.

Novel litigation between commercial property owners and tenants arises from COVID-19 lockdowns. Typically, owners sue for nonpayment of rent. But in Franklin County, Ohio, a large retail tenant turned the tables and sued the owner to recoup payments.

UPDATE: Ohio Businesses Remain Required to Post Exceptions to State-Wide Mask Mandate at All Entrances

On August 1, 2020, Lance D. Himes, Interim Director of the Ohio Department of Health, issued an amended order continuing the requirement that Ohio businesses post at all entrances any permitted exceptions they provide to customers, patrons, visitors, contractors, vendors and similar individuals to use facial coverings.

2020 Marcum National Construction Survey Marks a New, Post-Pandemic Construction Environment

The results of the 2020 Marcum National Construction Survey are in, and the construction industry’s outlook for the remainder of 2020 and beginning of 2021 remains cautiously optimistic despite the COVID-19 global pandemic. Ability to find skilled labor, healthcare expenses, and material costs remain the top concerns for the industry, while “lack of future work” joins the list.

Wrongful Death Lawsuits in the Wake of COVID-19

Several major “essential business” employers, including Walmart and Tyson, have been served with wrongful death lawsuits in relation to COVID-19. As many Ohio employees begin to return to work, employers should be prudent in following workplace safety practices.