Category: Trump Administration

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New FDA Commissioner Hits the Ground Running

FDA

Fresh off his noticeably smooth confirmation, the new Commissioner of Food and Drugs, Dr. Scott Gottlieb, appeared before Congress last Thursday and unveiled his strategic initiatives and priorities for the Trump Food and Drug Administration (“FDA”).  These run the gamut from improving regulatory science and policies to streamlining clinical trials to spurring innovation on behalf of patients.  Two initiatives, in particular, merit closer attention and discussion: combating opioid abuse and addressing drug price increases through more, accelerated generic competition.

Opioid Regulation

In his first post to the FDA Voice blog, Dr. Gottlieb wrote:

As Commissioner, my highest initial priority is to take immediate steps to reduce the scope of the epidemic of opioid addiction. . . .  I believe it is within the scope of FDA’s regulatory tools – and our societal obligations – to take whatever steps we can, under our existing legal authorities, to ensure that exposure to opioids is occurring under only appropriate clinical circumstances, and for appropriate patients.

First among these steps, the Commissioner is establishing an Opioid Policy Steering Committee, comprised of “some of the agency’s most senior career leaders, to explore and develop additional tools or strategies FDA can use to confront this epidemic.”  The strategies under consideration include (1) mandatory education for health care professionals about (i) appropriate prescribing recommendations; (ii) how to identify the risk of abuse in individual patients; and (iii) how to get addicted patients into treatment; and (2) working more closely with provider groups to develop standards for prescribing opioids in different clinical settings, so that “the number of opioid doses that an individual patient can be prescribed is more closely tailored to the medical indication.”

Limiting the availability of prescription pain medication is a dicey proposition, however.  As Dr. Gottlieb acknowledged, certain situations “require a 30-day supply” and, “[i]n those cases, we want to make sure patients have what they need.  But there are plenty of situations where the best prescription is a two- or three-day course of treatment.”  The individualized medical judgments and circumstances that drive opioid prescribing likely mean that no single approach is likely to strike the proper balance between over-prescribing and ensuring sufficient access to adequate pain management.  Interestingly, the variability between opioid prescribers and patients did not stop the Centers for Medicare and Medicaid Services from proposing hard limits on opioid dosing for non-cancer pain or palliative/end-of-life care (i.e., chronic pain) for Medicare Advantage Organizations and Prescription Drug Plan Sponsors.

In fact, pain patients already have struggled under bright-line limitations on opioids.  As we previously reported, the State of Massachusetts enacted a new law in March 2016 that prohibits “a practitioner [from] issu[ing] a prescription for more than a 7-day supply . . . [w]hen issuing a prescription for an opiate to an adult patient for outpatient use for the first time [or] to a minor,” the first such limitation legislatively imposed by any state.”  Mass. Gen. Laws ch. 94C, § 19D (2016).  Massachusetts physicians surveyed following the law’s enactment complained that “the pendulum has swung too far, depriving pain patients of needed relief,” and that “regulations won’t solve the addiction problem . . . .  Instead, they make doctors reluctant to prescribe opioids.”

Broadly targeting opioids as a class of drugs also may cast too wide a net.  A recent article in the journal Substance Abuse reported “[t]he US opioid epidemic has changed profoundly in the last 3 years” in that “[h]eroin and fentanyl have come to dominate an escalating epidemic of lethal opioid overdose, whereas opioids commonly obtained by prescription play a minor role, accounting for no more than 15% of reported deaths in 2015.”  The article urged that the changing etiology of opioid overdose “require[s] substantial recalibration of the US policy response.”

What is clear—and what Dr. Gottlieb seems to recognize—is that opioid abuse and addiction are dynamic issues that differ from prescriber to prescriber and from one patient to another.  Those variables may make a one-size-fits-all strategy unviable.

Drug Prices

During a budget hearing before the House Committee on Appropriations, Dr. Gottlieb testified that, “while the FDA does not have a direct role in drug pricing, we can take steps to facilitate entry of lower-cost alternatives to the market.”  He identified policy challenges that the last Congress had attempted to address through legislation designed to expedite access to affordable drugs.  Such legislation included the CREATES Act, which we previously analyzed.  The proposed law sought to prevent brand-name drug companies from using FDA safety rules (i.e., Risk Evaluation and Mitigation Strategies (REMS) and requirements thereunder, e.g., Elements to Assure Safe Use (ETASU)) for medicines with higher risk potential to block or delay generic entry.  “FDA has an important role to play in making sure that its statutory and regulatory processes are working as intended,” Gottlieb told Congress, “not being manipulated in ways that FDA and Congress did not intend.”

In response to growing political pressure in Washington to expedite drug reviews, Dr. Gottlieb assured lawmakers that biomarkers, new technologies, and more efficient clinical trial designs would make it possible to shorten the regulatory process.  But accelerated approval of expensive, investigational (albeit life-saving) therapies has raised concerns among health policy experts.

A recent op-ed published by the New England Journal of Medicine (NEJM) cautioned that

accelerated approval can lead to situations in which private payers may choose not to cover a drug because of high cost and lack of evidence of clinical efficacy, thereby thwarting the pathway’s goal of getting potentially important therapies to patients earlier, while major government payers are forced to cover the product, directing substantial tax dollars to drugs not yet shown to have clinical benefit.

The NEJM article’s authors argue that any biopharma company granted an accelerated approval should be subject to certain price restrictions until the confirmatory trials are completed, reasoning that “the price paid by taxpayers should reflect the strength of the available evidence about the drug’s clinical impact.”  Additionally, they proposed that all drugs moving through an accelerated-approval pathway should be subject to formal economic impact analyses after one to two years on the market, possibly funded by an increase in the user fees for manufacturers that use this pathway.

Dr. Gottlieb is also evaluating the generic drug and biosimilar review and approval process.  More specifically, Dr. Gottlieb is looking at measures to facilitate communication between the industry and FDA, address complex molecules, and to speed up the approval of biosimilar products.

These recommendations are not without some appeal.  Despite seeking to deliver more “bang” for the taxpayer’s “buck,” however, prospectively capping the federal reimbursement for a high-cost drug product still subject to additional clinical trials and/or other R&D may create a financial disincentive to pharmaceutical manufacturers to foot the expense of developing breakthrough drugs to fill an unmet medical need.

Stay Tuned

To deliver on the promises of reducing the incidence of opioid abuse and lowering drug prices, Dr. Gottlieb’s FDA must navigate the competing interests and thorny health policy issues highlighted above.  Foley & Lardner will report further as the agency’s redefined mission unfolds.

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17 Measures Every Health Care Organization Should Consider to Reduce the Risk of Cyber-Intrusions

cybersecurity

The importance of privacy in the health care industry starts at the most basic level between a patient, a doctor, and the doctor’s laptop computer. The levels of importance and complexity increase exponentially when you look at entire networks of payers and providers. The amount of data produced and stored in these organizations is staggering and keeping it secure is of the utmost importance. We have identified misconceptions about cybersecurity. We’ve covered some of the legal obligations the c-suite is under to secure its organization’s data. With the rise cyber-intrusions like ransomware, we know it’s important to effectively train employees and follow the guidelines provided by the Federal Department of Health and Human Services.

With the developments expected in this space under the Trump Administration, it is vital that every health care organization is prepared on the cybersecurity front.

Below is our list of 17 measures every health care organization should consider to reduce the risk of cyber-intrusions.

  1. Conduct internal compliance and risk assessments, to determine your organization’s vulnerability to cyber-attacks. This includes, but is not limited to, the security risk analysis required under the HIPAA Security Rule for covered entities and their business associates.
  2. Develop and implement corporate policies and procedures required for compliance with federal and state privacy and security laws.
  3. Develop quick-response teams to handle potential cyber-attacks, using pre-formulated decision trees and procedures so that you don’t have to develop them while under the fire of an ongoing attack.
  4. Establish secure data backup protocols to ensure that, even if your company is under attack, important company records are secure and available.
  5. Establish protocols to deal with common forms of cyber-attacks (denial of service, etc.).
  6. Line up outside experts, if necessary based upon the risk profile of your company, to swing into action if company processes are overwhelmed by a cyber-attack.
  7. Perform periodic audits of cybersecurity practices against industry norms, accepted best practices, and the risk profile of your organization.
  8. Implement information security best practices, reflect them in information security policies, records retention and management policies, and in internal controls/standard operating procedures.
  9. Make certain the CEO and executive leadership are properly informed about the cyber risks to your company and that they’re involved in oversight and the decision-making process related both to cyber-attacks and proactive cybersecurity measures.
  10. Review funding of all electronic security measures to ensure they are adequate to cover not only routine compliance measures but also to allow for proactive testing and probing of systems in light of increasingly sophisticated measures being used by hackers.
  11. Collect only that protected health information and personally identifiable information from clients, customers, or company personnel that is needed for identified business needs, with the retention of such information being only for as long as it serves those business needs, with storage being accomplished in a way that minimizes the chance of it being of any use outside the organization (encryption, etc.).
  12. Obtain cyber insurance and understand the coverage, including the legal counsel and other experts the company is permitted to engage under the policy.
  13. Coordinate cyber incident response planning across the entire company.
  14. Store sensitive information securely (encrypting where appropriate) and away from other data that does not require the same level of protection. Use a layered defense approach to protect “crown jewel” information.
  15. Conduct appropriate data security due diligence on third-party service providers with access to protected health information, personal identifiable information, and/or sensitive business information, and require them to enter into agreements that they are implementing robust data security procedures, following up to ensure these requirements are in fact implemented.
  16. Assess ways in which your company’s access vulnerabilities (website, VPNs, remote access, and so forth) are configured to minimize potential intrusion risk, with regular testing and probing to update and address identified risks.
  17. Perform companywide training, tailored to the personnel at issue, to ensure personnel understand the importance of following all security policies and procedures and reporting any suspected violations.

This list was generated as part of a Legal News: Cybersecurity newsletter by Greg Husisian, Chanley Howell and Jacob Heller titled, “Cybersecurity and the New Trump Administration: Your Top Ten Questions Answered.” Click here for the original publication.

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Proving Utility, Demonstrating Value: How to Align the Moving Parts in Personalized Medicine Reimbursement

HC-Reiumbursement

Of the many business, operational, legal, regulatory and clinical obstacles standing in the way of widespread delivery of personalized medicine, the single greatest challenge may lie in solving the reimbursement puzzle. Advocates of personalized medicine contend that it results in better care for the patient, as therapy is targeted specific to an individual, and that it should result in cost savings as treatment that is unlikely to work for that patient is avoided.

The lack of standardized reimbursement codes and definitions covering precision medicine treatments and services, particularly molecular genetic laboratory tests — when the industry hasn’t even settled on a standard definition of “personalized medicine” — make it difficult for providers to get reimbursed, especially for new or innovative offerings. In order to secure payment from insurers, personalized medicine providers must prove not only the clinical efficacy of their treatments or genetic testing, but also the value they offer to payers. Doing so requires a deep understanding of health care economics.

That formidable landscape provided the backdrop for panel discussion at the Business of Personalized Medicine Summit on March 28 in San Francisco. Moderated by Foley partner Judith Waltz, the discussion carried the title “Moving Targets,” an apt description of a market in the midst of dramatic structural and philosophical change. Even in light of the recent failure of a sweeping health care bill in Congress, the market remains mired in uncertainty. The Affordable Care Act, and other government and payer initiatives, pushed the industry toward value-based reimbursement, and the Obama administration provided vocal support for personalized medicine. Thus far the Trump administration has yet to signal whether it will support continued movement in those directions.

In that environment, Waltz said, the imperative for personalized medicine providers is to recognize and fully understand, at the earliest possible stage, how they’ll make money. “Every personalized medicine business strategy has to identify who the payer will be, and how pricing and reimbursement will work,” she said. “And it has to articulate the product differentiation – because payers often won’t cover it unless it’s better or cheaper than what they’re already doing.”

They’ll also need to have a plan for demonstrating clinical utility in order to meet payers’ evidentiary requirements for coverage, said Mark McCoy, Senior Director, Reimbursement at Guardant Health. In most cases that means building a body of clinical literature, since most payers want to see published data proving either cost savings or cost effectiveness of outcomes.

That has ramifications for sales and marketing, McCoy said. It’s vital to work with providers to set up clinical tests with appropriate utilization and other elements that payers will expect to see – and to keep in mind that providers [physicians who order and rely upon the test that is reimbursed by payers] have little if any financial incentive to use your test. That means, as the business and product evolve, changes must be carefully communicated to providers – who can’t be expected to take pains. “We’ve found you can get good early adoption, but if you change your ordering process a year or two in providers will get frustrated and just drop you,” he said.

Providers also require a lot of education on not only personalized medicine treatments or tests, but on how to apply new evidence to specific patients and how to articulate the results. Amber Trivedi, Senior Vice President, Market Development and Innovation at InformedDNA, said payers want to see that providers are involved, and that puts the impetus on companies to ensure that providers understand how payers define clinical utility and that they document that utility in encounter notes.

Trivedi advised taking a very hands-on approach in dealing with physicians. “You might even have to teach them how to write letters of medical necessity to secure coverage,” she said. “There’s a lot of variation out there in understanding of even the most basic terms.”

Evidence-based review through one of the four established programs also proves extremely helpful when seeking reimbursement, said Anita Chawla, Managing Principal at Analysis Group. The MoIDX program, developed and administered by Palmetto GBA, helps determine Medicare reimbursement – making its determination of clinical utility among the most influential in the industry.

Given that influence, it makes sense for personalized medicine providers to factor in MoIDX criteria and processes when designing clinical studies. “It can save a lot of time downstream,” Chawla said. She pointed to the MoIDX hierarchy – which sets randomized, prospectively controlled trials as the gold standard – as an important road map for companies in the testing-design stage.

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