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In a December 12, 2017 Advisory Board article, “The 340B drug pricing controversy, explained,” Scott Orwig wrote, “the 340B Drug Pricing Program is one of the most contentious issues in health care: Its critics say it ‘hurts patients’ and is being ‘abused’ by hospitals. Its defenders say it’s ‘vital’ to the health of low-income patients and essential to helping safety net hospitals care for their communities.”…
Continue Reading Maneuvers on the 340B Drug Pricing Program Battlefield: Duplicate Discounts and Contract Pharmacies

The U.S. Food and Drug Administration (FDA) issued two Emergency Use Authorizations (EUA) for commercially distributed COVID-19 diagnostic tests at the end of last week.  The first authorization was issued to Roche Molecular Systems, Inc., for its cobas SARS-CoV-2 Test, and the second issued the following day to Thermo Fisher Scientific, Inc., for its TaqPath COVID-19 Combo Kit.  Both tests are for the qualitative detection of SARS-CoV-2, the virus that causes coronavirus disease 2019 (COVID-19). FDA granted the authorizations within 24 hours of receiving the requests.
Continue Reading FDA Grants COVID-19 Diagnostic Emergency Use Authorizations, And Other Recent FDA Actions to Address COVID-19

The FDA actions that dominated 2019 demonstrated a shifting regulatory landscape for certain product types, such as e-cigarettes, foods and supplements containing cannabidiol (CBD), and digital health / machine learning enabled medical devices. FDA continued to take action to lower drug prices by focusing on approvals of competitive biosimilars and generic drugs, and FDA enforcement actions signaled the Agency’s ongoing interest in ensuring GMP compliance overseas.
Continue Reading FDA Year in Review: A Shifting Regulatory Landscape

*This article was originally posted in Law360 on November 4, 2019

With the rise of artificial intelligence and machine learning, clinical decision support, or CDS, software presents a novel opportunity to analyze immensely large amounts of data for patterns or other information that may be relevant to a particular patient’s diagnosis or health care options.
Continue Reading Adapting To FDA’s Proposal For Diagnosis Support Software

On September 19, 2019, FDA issued a guidance document, “Safety and Performance Based Pathway,” describing an optional pathway for medical devices with well-understood safety and performance profiles. The guidance signals FDA’s willingness to implement a more modern approach under the arcane 510(k) premarket pathway.
Continue Reading FDA’s New Safety and Performance Based Pathway for Medical Devices Reflects a More Modern Approach to Finding Substantial Equivalence

In its decision, the Court concluded that UnitedHealth Group, Inc. (“United”) was not authorized to engage in “cross-plan offsetting.” What is cross-plan offsetting? It is a “self-help” practice that third party administrators (“TPAs”) of employer-funded health plans (“ERISA Plans”) engage in by offsetting alleged overpayments made to an out-of-network provider under one TPA-administered ERISA Plan by withholding payments to the same provider under a different TPA-administered ERISA Plan. Cross-plan offsetting is not an issue for in-network providers since most, if not all, in-network contracts include very specific definitions of what an overpayment is and how it may be resolved. However, for out-of-network providers, there is no contract in place and this often leads to disagreements about what should be considered an overpayment and how overpayments may be resolved. From the TPA’s perspective, cross-plan offsetting alleviates the need to wait for the resolution of an overpayment dispute to recapture overpayments made by the TPA to the provider. From the provider’s perspective, cross-plan offsetting is the TPA version of “robbing Peter to pay Paul.”

Sound complicated? Cross-plan offsetting is complicated! However, notwithstanding its complications, cross-plan offsetting is effective. In fact, it is so effective that on May 30, 2019, United filed a Petition for Writ of Certiorari asking the United States Supreme Court to overturn the Eighth Circuit’s decision and allow United and other TPAs to continue using cross-plan offsetting as a way to recover alleged overpayments.
Continue Reading Cross-Plan Offsetting in the Balance: UnitedHealth Group, Inc. Petitions the Supreme Court to Allow Cross-Plan Offsetting; Response to be Filed on or before July 31, 2019

Originally posted on the Sheppard Mullin FDA Blog on June 25, 2019.

In April of this year, the US Food and Drug Administration (FDA) released a discussion paper, Proposed Regulatory Framework for Modifications to Artificial Intelligence/Machine Learning (AI/ML) – Based Software as a Medical Device (SaMD), which proposed a novel regulatory framework for artificial intelligence (AI)-based medical devices.  The public docket closed on June 3, 2019, and FDA received over one hundred comments from manufacturers, industry associations, and other interested parties. The comments vary in support of FDA’s framework and largely urge FDA to align with external stakeholders that are already developing industry standards and clarify the agency’s expectations under the proposed framework.
Continue Reading Medical Devices – Artificial Intelligence and Reactions to FDA’s Proposed Oversight

Part C and Part D Quality Rating System

The November 1, 2018 proposed rule issued by the Centers for Medicare & Medicaid Services (“CMS”) includes enhancements and substantive changes to the Star Rating System in order to increase the stability and predictability of the Medicare Advantage program (aka “Part C”) and the Medicare Prescription Drug Benefit program (aka “Part D”) Star Ratings.

Measure Level Star Ratings.

CMS’ Star Ratings proposals are intended to eliminate some of the volatility and unpredictability of the calculation methodology, which is a welcome change for Medicare Advantage organizations (“MAOs”) and Part D plan sponsors. Based on stakeholder feedback and analyses of the data, CMS proposes two enhancements to the current hierarchical clustering methodology that is used to set cut points for non-Consumer Assessment of Healthcare Providers and Systems (“CAHPS”) measures:…
Continue Reading Blog Series Part 7: CMS Proposed Rule on Policy and Technical Changes to the Medicare Advantage, Medicare Prescription Drug Benefit, Medicaid Fee-For-Service, and Medicaid Managed Care Programs for 2020 and 2021

“I can stop the deal if it is reasonably necessary to protect New Yorkers.”
Superintendent Maria Vullo of the New York State Department of Financial Services

During a public hearing in New York City on Thursday, October 18, 2018, New York State regulators, including Superintendent Maria Vullo of the New York State Department of Financial Services (“DFS”), threatened to block CVS Health’s $69 billion merger with health insurer Aetna if (i) CVS would not agree to hold the line on rising insurance premiums for Aetna’s member population in New York State (approximately 1.1 million New Yorkers across the State); and/or (ii) CVS Health refused to submit its CVS/Caremark pharmacy benefits manager (“PBM”) business to State regulation.
Continue Reading WHAT SAY YOU, NEW YORK? Now that Federal Antitrust Regulators Have Approved CVS’s Proposed Acquisition of Aetna, Attention Turns to New York State