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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.

Investment Training for the Second and Third Generations

Consider this scenario. Mom and Dad started the business from the ground up. Over the decades it has expanded into a money-making machine. They are able to sell the business and it results in a multimillion-dollar payday for their labors. The excess money has allowed Mom and Dad to invest with various financial advising firms, several fund management groups, and directly with new startups and joint ventures. Their experience has made them savvy investors, with a detailed understanding of how much to invest, when, and where. They cannot justify formation of a full family office with dedicated investors to manage the funds, but Mom and Dad have set up a trust fund for the children to allow these investments to continue to grow over the years. Eventually, Mom and Dad pass. Their children enjoy the fruits of their labors, and, by the time the grandchildren are adults, Mom and Dad's savvy investments are gone.

Provider Relief Funds – Continued Confusion Regarding Reporting Requirements and Lost Revenues

In Fall 2020, HHS issued multiple rounds of guidance and FAQs regarding the reporting requirements for the Provider Relief Funds, the most recently published notice being November 2, 2020 and December 11, 2020. Specifically, the reporting portal for the use of the funds in 2020 was scheduled to open on January 15, 2021. Although there was much speculation as to whether this would occur. And, as of the date of this article, the portal was not opened.

Ohio S.B. 310 Loosens Practice Barrier for Advanced Practice Providers

S.B. 310, signed by Ohio Governor DeWine and effective from December 29, 2020 until May 1, 2021, provides flexibility regarding the regulatorily mandated supervision and collaboration agreements for physician assistants, certified nurse-midwives, clinical nurse specialists and certified nurse practitioners working in a hospital or other health care facility. Originally drafted as a bill to distribute federal COVID funding to local subdivisions, the healthcare related provisions were added to help relieve some of the stresses hospitals and other healthcare facilities are facing during the COVID-19 pandemic.

HHS Issues Opinion Regarding Illegal Attempts by Drug Manufacturers to Deny 340B Discounts under Contract Pharmacy Arrangements

The federal 340B discount drug program is a safety net for many federally qualified health centers, disproportionate share hospitals, and other covered entities. This program allows these providers to obtain discount pricing on drugs which in turn allows the providers to better serve their patient populations and provide their patients with access to vital health care services. Over the years, the 340B program has undergone intense scrutiny, particularly by drug manufacturers who are required by federal law to provide the discounted pricing.

S.B. 263 Protects 340B Covered Entities from Predatory Practices in Ohio

Just before the end of calendar year 2020 and at the end of its two-year legislative session, the Ohio General Assembly passed Senate Bill 263, which prohibits insurance companies and pharmacy benefit managers (“PBMs”) from imposing on 340B Covered Entities discriminatory pricing and other contract terms. This is a win for safety net providers and the people they serve, as 340B savings are crucial to their ability to provide high quality, affordable programs and services to patients.