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President Trump Signs Executive Orders that Enable Access to Affordable Meds

Client Alert

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.


The Ohio Chemical Dependency Professionals Board’s Latest Batch of Rules: What Providers Should Know

The Ohio Chemical Dependency Professionals Board has introduced new rules and amendments, covering various aspects such as CDCA certificate requirements, expanded services for LCDCs and CDCAs, remote supervision, and reciprocity application requirements. Notable changes include revised criteria for obtaining a CDCA certification, expanded services for LCDCs and CDCAs, and updated ethical obligations for licensees and certificate holders, including non-discrimination, confidentiality, and anti-sexual harassment measures.

Governor Mike DeWine and The Ohio State University Introduce the SOAR Study on Ohio Mental Illness

On January 19, Ohio Gov. Mike DeWine and The Ohio State University announced a new research initiative, the State of Ohio Adversity and Resilience (“SOAR”) study, which will investigate all factors influencing Ohio’s mental illness and addiction epidemic.

CHANGING TIDES: Summary and Effects of Burnett et. al. v. National Ass’n of Realtors, et. al.

In April 2019, a class-action Complaint was filed in federal court for the Western District Court for Missouri arguing that the traditional payment agreements employed by many across the United States amounted to conspiracy resulting in the artificial increase in brokerage commissions. Plaintiffs, a class-action group comprised of sellers, argued that they paid excessive brokerage commissions upon the sale of their home as a result of the customary payment structure where Sellers agree to pay the full commission on the sale of their property, with Seller’s agent notating the portion of commission they are willing to pay to a Buyer’s agent at closing on the MLS or other similar system.

The Ohio Board of Pharmacy’s Latest Batch of Rules: What Providers Should Know

The Ohio Board of Pharmacy released several new rules and proposed amendments to existing rules over the past month that will significantly impact pharmacy operations. Topics range from updates to the Terminal Distributor of Dangerous Drugs license to mobile clinics to mandatory rest breaks for pharmacists of outpatient pharmacies. A summary of the proposed changes is below, along with instructions for commenting on the rules. Your BMD healthcare attorney can help write comment letters and submit the comments on your behalf as well.

Employee or Independent Contractor? New Guidance Issued by the Department of Labor

On January 9, 2024, the U.S. Department of Labor (DOL) issued its long-awaited final rule — effective March 11, 2024 — revising its prior interpretation of worker classifications under the federal Fair Labor Standards Act (FLSA). The new final rule rescinds the standard previously established in 2021, in turn, shifting the analysis of whether a worker is an employee (versus an independent contractor) of a business from a more streamlined “economic reality” test to a more complex “totality of the circumstances” standard.