Health Care

With the presidential transition underway, we now look forward to what the Biden administration will seek to accomplish, particularly in the realm of health care policy.

As COVID-19 infection rates continue to rise in areas of the country, telehealth continues to play an important role in the delivery of healthcare, especially to those most vulnerable to the virus. Existing telehealth waivers continue in effect under the Public Health Emergency, and new legislation seeks to expand telehealth access through home health services. Plus, join us for a webinar on the future of telehealth.

It has been a long time coming. On November 2, 2020, the Drug Enforcement Administration (DEA) released its long-awaited proposed rule to revise the regulations related to suspicious orders of controlled substances. The proposed rule will implement the Preventing Drug Diversion Act of 2018 (PDDA) and clarify the procedures a registrant must follow for orders received under suspicious circumstances, referred to as “ORUSCs.” There are four key regulatory changes being proposed by DEA: (1) new definitions, (2) expansion of the types of registrants required to report, (3) procedures for identifying and reporting suspicious orders, and (4) reporting and recordkeeping requirements.
Key to the proposed rule is the establishment of a “two-option framework” for registrants to deal with ORUSCs: namely, they could (1) decline to ship the ORUSC and immediately file a suspicious order report to DEA’s centralized database, or (2) conduct due diligence into the ORUSC and make a determination about the order’s validity within seven calendar days, among other requirements. DEA is accepting electronic and written comments on the proposed rule through January 4, 2021.

Back in the early days of the COVID-19 pandemic, we published a post outlining the different kinds of diagnostic tests that were being marketed and the different roles of the two main federal regulators that oversee the quality of different subsets of tests. Since then, there have been some important policy developments affecting diagnostic and antibody testing. There also has been significant growth in the number of tests authorized by the Food and Drug Administration for point-of-care uses in various patient settings such as clinics, emergency departments, and physician offices. Read on for an update about these developments.

On October 29, 2020, the Department of Justice (DOJ) announced the first publicly-available settlement involving alleged violations of CMS’s Open Payments Program, otherwise known as the Sunshine Act. The $9.2 million settlement resolved allegations that Minnesota-based medical device manufacturer Medtronic USA Inc. violated (i) the Anti-Kickback Statute (AKS) and the False Claims Act (FCA) by paying kickbacks to a South Dakota neurosurgeon, Wilson Asfora, M.D., and (ii) the Open Payments reporting requirements by failing to accurately report payments it made to Asfora to the Centers for Medicare & Medicaid (CMS). While this settlement is the first public enforcement action involving Open Payments violations, more enforcement actions may be expected in the near future.

US hospitals and healthcare facilities struggling to maintain normal operations during the COVID-19 emergency, were warned this week by the federal Cybersecurity and Infrastructure Agency (CISA), the Federal Bureau of Investigation (FBI) and the Department of Health and Human Services (HHS) of a “targeted and imminent cybercrime threat.” Specifically, CISA, FBI and HHS have credible information that malicious cyber actors are targeting hospitals and other health care providers with Trickbot malware, leading to ransomware attacks, data theft and significantly, the disruption of healthcare services during the pandemic.

Earlier this month, the FDA’s Center for Biologics Evaluation and Research issued its highly anticipated guidance outlining the agency’s current thinking on granting emergency use authorization (EUA) to investigational vaccines for COVID-19. This guidance was the subject of intense political debate among the White House, FDA, and other public health officials given the urgent need for a safe and effective vaccine.

As the COVID-19 pandemic continues to upend our daily lives, the promise of a vaccine offers hope that life may, in the not-too-distant future, return to some version of normalcy. The path to getting a safe, accessible vaccine to market, however, presents a variety of its own challenges. As we’ve been exploring in our Bioethics in a Pandemic blog series, the pandemic has presented a host of bioethics issues pertinent to the vaccine development and distribution process. Mintz's Bridgette Keller recently shared her insights into how bioethics can (and should!) influence research and development at the M2D2 Challenge Awards. A video of her presentation is now available to view online.

Earlier this month, the National Academies Committee on Equitable Allocation of Vaccine for the Novel Coronavirus released its Final Framework to guide US distribution and administration of a COVID-19 vaccine, once available. The nuts and bolts of the Final Framework remain largely the same as the Draft Framework we covered previously in our Bioethics Blog Series. After a quick review of the Allocation Phases here, we explore a few areas in the Final Framework the Committee expanded on and responded to stakeholder comments.

You’d be forgiven in the current climate of coronavirus and election season, to name just a couple hot issues of the day, for missing two recent announcements from the FDA about its digital health program. On September 14, 2020, FDA published “Developing the Software Precertification Program: Summary of Learnings and Ongoing Activities” and the following week, on September 22, launched the Digital Health Center of Excellence.

CMS recently issued a proposed rule that would grant breakthrough medical devices Medicare coverage immediately upon FDA approval. The rule also proposes to codify a new definition of “reasonable and necessary” for Medicare national coverage determinations that takes into account commercial insurance coverage of items and services. It is unclear how broadly this new "reasonable and necessary" definition will apply if the proposed rule is finalized.

The U.S. Food and Drug Administration (FDA) recently announced what appears to be the first public warning made by the agency to a company promoting an approved prescription drug product for the unapproved use of treating COVID-19 symptoms. Although the regulatory action was announced in the FDA’s daily pandemic update on October 2, 2020, the warning letter issued by the Office of Prescription Drug Promotion (OPDP) is dated September 22, 2020. From our perspective, this public FDA action is notable for two distinct policy reasons.

On September 24, 2020, HHS announced that it had finalized the Section 804 Importation Program regulations, which fall under the authority of Section 804 of the Federal Food, Drug and Cosmetic Act (FD&C Act) (21 U.S.C. § 384). Although the Section 804 authority has been in place for nearly twenty years, no previous HHS Secretary had been willing to certify, as required by the law, that drug importation would “pose no additional risk to the public’s health and safety” and would “result in a significant reduction in the cost of covered products to the American consumer.” The preamble to the Final Rule states that HHS Secretary Alex Azar is making the necessary certification to Congress in conjunction with this Final Rule. It also addresses a variety of comments from stakeholders regarding the scope and timing of the Section 804 certification, each of which raise novel questions of law and policy in light of the untested nature of the requirement. Perhaps most interestingly, however, the Final Rule notes several times that HHS/FDA is “unable to estimate the cost savings from this final rule, because we lack information about the likely size and scope of [Section 804 Importation Programs], the specific eligible prescription drugs that may be imported, the degree to which these imported drugs will be less expensive than nonimported drugs available in the United States, and which eligible prescription drugs are produced by U.S.-based drug manufacturers,” making it difficult to reconcile how the HHS Secretary was able to certify that it would result in a significant reduction in costs for U.S. consumers.

As predicted, the Department of Justice (DOJ) and other enforcement agencies have acted quickly to bring substantial criminal enforcement actions for fraud against the Paycheck Protection Program (PPP). Acting Assistant Attorney General (AAG) Brian Rabbitt announced recently that the DOJ’s Criminal Division reached the important milestone that day of criminally charging more than 50 individuals for alleged fraud committed to obtain PPP funds.

Last week, CMS announced the finalized End-Stage Renal Disease (ESRD) Treatment Choices Model (ETC Model), which will test whether incentivizing home dialysis and kidney transplantation will reduce Medicare expenditures while maintaining or improving the quality of care furnished to beneficiaries with ESRD. This post summarizes how participants are selected, the specific payment changes, and the overall timeline.

References to Operation Warp Speed (OWS) have been present throughout our coverage of the ethical questions related to the development and distribution of a COVID-19 vaccine. In fact, OWS is part of a broader public-private effort to accelerate COVID-19 countermeasures, such as the development, manufacturing, and distribution of COVID-19 vaccines, therapeutics, and diagnostics. OWS has ambitious goals. It intends to deliver 300 million doses of a safe and effective vaccine for COVID-19 by January 19, 2021. Here, we provide a brief overview of OWS, its current progress, and relevant ethical considerations.

On September 9, 2020, the Department of Justice (DOJ) announced a $50 million settlement with Wheeling Hospital, Inc. of West Virginia to resolve False Claims Act allegations that Wheeling Hospital violated the Anti-Kickback Statute (AKS) and Stark Law. The settlement resolved False Claims Act allegations that were triggered by a qui tam lawsuit brought by a former vice president of Wheeling Hospital who oversaw hospital operations and physician engagements. According to the relator's complaint, Wheeling Hospital, under its former management, paid several physicians annual compensation in excess of a million dollars based on the volume or value of their referrals.

After exploring some of the ethical questions involved in allocating and distributing a potential COVID-19 vaccine and the basic tenets of bioethics, we continue by delving into the ethical issues relating to the vaccine development process, including clinical trials. As a first step, we provide a very brief introduction on how vaccines are developed and tested prior to approval and release.

President Trump has followed through on his threat to pharmaceutical manufacturers, signing new executive orders on Sunday that take a preliminary step toward the President’s goal of tying domestic drug prices to the prices manufacturers charge in foreign countries. The “Executive Order on Lowering Drug Prices by Putting America First” follows a trio of drug pricing-related executive orders the administration issued this past July. At that time, President Trump also signed a different executive order with the same name, but withheld the order in an attempt to force pharmaceutical manufacturers to the negotiating table. The President warned manufacturers that if they did not propose alternatives to lower drug pricing within 30 days, his administration would take action to implement its previously-abandoned plan to peg U.S. drug prices to foreign prices. Sunday’s order follows weeks of negotiations between the White House and drug manufacturers that have apparently not resulted in any mutually-acceptable proposals for lowering American drug prices.

Over the summer, we wrote about why health care companies may want to consider buying assets out of bankruptcy, taking advantage of the Bankruptcy Code Section 363 sale process (a "363 Sale”). We are back with our second post, to provide more detail to the process and discuss some pros and cons of 363 Sales.

As a refresher, a 363 Sale couples a flexible and fast process with ample liability protection for willing buyers. The primary benefit of a 363 Sale is that a buyer can acquire the debtor’s assets free and clear of virtually all liens, claims, and interests burdening the assets and the debtor. And when Section 363 is coupled with the “assumption and assignment” provisions of Section 365 of the Bankruptcy Code, a debtor is able to assign most contracts or leases that a buyer may wish to purchase, including contracts with ironclad anti-assignment language, provided that certain conditions are satisfied. When a target is experiencing severe financial distress, the benefit of acquiring assets “free and clear” is extraordinarily valuable.