The FDA has proposed a series of new steps to modernize the functions of the Office of New Drugs.

Proposed Modernization of FDA’s Drug Review Office

The Food and Drug Administration (FDA) released a statement today on its plan to assure American’s have access to safe and effective drugs and biologics. The plan entails modernizing the functions of the Office of New Drugs to align organizational operations with advances in science and medicine. Moreover, the proposed modernization of FDA’s Drug Review Office is a strategy to ensure alignment between innovation and regulation.

The Food and Drug Administration released its plan to provide American's with access to safe and effective drugs and biologics. Click To Tweet

With this progress comes more complexity. Not only challenges related to the science of how drugs are discovered, but also the manner in which they’re developed. For very novel drugs targeting unmet needs, this often doesn’t follow the traditional three phases of clinical trials.

The Office of New Drugs

The Office of New Drugs is a division within the FDA’s Center for Drug Evaluation and Research (CDER).  To help the FDA meet its public health goals, the Office of New Drugs is responsible for:

  • Reviewing applications and deciding if drugs and biologics meet safety and efficacy standards;
  • Setting guidance and policy to ensure efficient drug review processes;
  • Overseeing investigational studies during drug development;
  • Determining marketing approvals for new innovator or non-generic drugs — and making decisions related to products already in the market;
  • Providing guidance to industry on clinical, scientific, and regulatory matters;
  • Overseeing the 21st Century Review Initiative;
  • Regulating over the counter drugs (OTC) and drug labeling; and
  • Maintaining and updating databases containing information about drug shortages, post-market studies, clinical trials, generic drugs, OTC drugs, and biological therapeutic products.

Click here for more on the Office of New Drugs.

Advances in science and medicine require the FDA to adapt its structure and processes.
Advances in science and medicine require the FDA to adapt accordingly.

Proposed Modernization of FDA’s Drug Review Office

The FDA’s proposed modernization efforts include structural changes and process revisions.

The FDA has introduced many fundamental advances in how it evaluates drugs for safety and effectiveness, as well as the manner in which clinical trials are guided. These include adaptive approaches to clinical development such as the introduction of seamless trial designs or master protocols or tissue agnostic product approvals.

The Plan

Dr. Janet Woodcock, Director of the CDER, has set goals and proposed new steps to modernize the organization and functions of CDER’s Office of New Drugs. The stated goals and proposed steps include:

  • Issuing more product-specific guidance documents. The plan is to develop hundreds of new clinical guidance documents and make sure they stay up-to-date to reflect the latest science;
  • Implementing new organizational structures to allow review staff to have more time for reviewing and providing feedback to sponsors on clinical protocols;
  • Engaging sponsors earlier in the development process to ensure that trial designs are efficient and structured in the most effective way to identify risks and measure outcomes;
  • Expanding the Office’s ability to engage external stakeholders, such as disease specialists, academic researchers, external regulatory partners, and patient groups. Patient-focused drug development is becoming an industry trend;
  • Creating many new therapeutic-specific divisions that will have more ability to engage in discrete areas of medicine; and
  • Better organizing the entire review process and the development of the key review memos to enable  medical staff to efficiently document their findings. This will allow medical staff to spend more of their time on advancing scientific work in their fields and less time documenting and performing administrative tasks.

We believe the new alignment and processes will improve efficiency by 20 percent at a minimum overall […] We’ll engage the external community more closely in our work, especially patients who inform our patient-focused drug development, with the aim of advancing more modern regulatory principles.

Key Takeaways

Ultimately, the proposed modernization of the FDA’s Drug Review Office is an attempt to:

  • Ensure the organizational structure consistently follows the subdivisions of medicine;
  • Streamline processes to enhance operational efficiencies and communication flows;
  • Assure American’s have access to safe and effective drugs and biologics; and
  • Achieve alignment between innovation and regulation.
The FDA wants to achieve alignment between innovation and regulation. Click To Tweet
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115th Congress: Pharmaceutical Industry, Medicare, ACA, 340B – Legislation to Watch

Legislative measures aim to solve problems as defined by members of Congress. Once a bill passes both Chambers, the President will either sign the bill into law or veto it. If passed, the new law —  or act —  is codified in the United States Code (U.S.C).

REGULATIONS 

Once codified, federal agencies create rules and regulations — published in the Federal Register (FR) — to carry out the laws passed by Congress. Regulatory agencies act with broad discretionary authority and within limits set by Congress and the Constitution.

LEGISLATION TO WATCH

    1. S.2460 – Every Prescription Conveyed Securely Act – If passed in its current form, this bill will amend title XVIII of the Social Security Act to require e-prescribing for coverage under part D of the Medicare program of prescription drugs that are controlled substances.
    1. S.2453 – Ensuring the Value of the 340B Program Act of 2018 – If passed in its current form, this bill will amend title XVIII of the Social Security Act to require hospitals to provide the Secretary with information on the hospital’s acquisition costs for 340B drugs and the total revenues received by the hospital for such drugs.
    1. S.2476 – Expanding Access to Low Cost Generic Drugs Act – If passed in its current form, this bill will amend the Federal Food, Drug, and Cosmetic Act to ensure that valid generic drugs may enter the market.
    1. S.2478 – End Taxpayer Subsidies for Drug Ads Act – If passed in its current form, this bill will amend the Internal Revenue Code of 1986 to deny the deduction for advertising and promotional expenses for prescription drugs.
  1. S.2554 – Patient Right to Know Drug Prices Act – If passed in its current form, this bill will amend Section 1311(e) of the Patient Protection and Affordable Care Act by adding at the end the following:

(4)  INFORMATION ON PRESCRIPTION DRUGS. —The Exchange shall require health plans seeking certification as qualified health plans to ensure that—  “(A) the health insurance issuer does not restrict any pharmacy that dispenses a prescription drug to an enrollee in the plan from informing (or penalize such pharmacy for informing) an enrollee of any differential between the price of the drug to the enrollee under the plan and the price the individual would pay for the drug if the enrollee obtained the drug without using any health insurance coverage; and

“(B) any entity that provides pharmacy benefits management services under a contract with any such health plan does not, with respect to such plan or any health benefits plan that the entity contracts with to provide pharmacy benefits management services and that is offered by an entity other than such sponsor or organization, restrict a pharmacy that dispenses a prescription drug from informing (or penalize such pharmacy for informing) an enrollee of any differential between the price of the drug to the enrollee under the plan and the price the individual would pay for the drug if the enrollee obtained the drug without using any health insurance coverage.”

(b) Other Health Plans. —The provisions of section 1311(e)(4) of the Patient Protection and Affordable Care Act (as added by subsection (a)) shall apply to all health insurance issuers with respect to health insurance coverage and to all group health plans (as such terms are defined in section 2791 of the Public Health Service Act).

Notably, (a) not all measures [necessarily] pass through the Chamber in which they are introduced — similarly,  not all measures that pass through one or both Chambers will [necessarily] pass in their current form and (b) it is important to consider the (Party) composition of Congress in relation to the political (Party) affiliation(s) of the President and a bill’s sponsor — and co-sponsor(s) when gauging the likelihood of a legislative measure becoming law [this should not be taken to mean that ALL legislative measures lack bipartisan support].

LEGISLATION BEGETS REGULATION

The pharmaceutical industry, the 340B program, health plans, hospitals, and Medicare Part D are highly regulated. Government action profoundly impacts industry’s operations, products and business development goals. Strategically, the value of proactively tracking legislation cannot — and should not — be underscored.

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Update: Federal Court Allows The Centers for Medicare & Medicaid Services to Cut $1.6 billion from Federal 340B Drug Pricing Program

Health care policies are implemented through expenditure decisions made by government officials. Today, a federal court  deemed a lawsuit brought by three hospital associations — among other entities — invalid, allowing the CMS to implement the provisions of a final rule the agency published in November. 

BACKGROUND

In November, the CMS published a controversial final rule  which, among other things, cut Medicare hospital reimbursement payments for hospitals that participate in the Health Resources and Services Administration’s (HRSA’s) 340B Drug Pricing Program by $1.6 billon, effective January 1, 2018. Rural, children’s and cancer hospitals are not subject to reimbursement decreases.

THE JUSTIFICATION FOR CUTTING HOSPITAL REIMBURSEMENT PAYMENTS

The language in the final rule reads: “We [CMS] believe that reducing payments on 340B purchased drugs to better align with hospital acquisition costs directly lowers drug costs for those beneficiaries who receive a covered outpatient drug from a 340B participating hospital. Further, to the extent that studies have found that 340B participating hospitals tend to use more high cost drugs, we believe that this 340B payment policy helps address drug pricing in the hospital outpatient setting by lessening the incentive for unnecessary utilization of costly drugs.”

340B PROGRAM BACKGROUND

The Omnibus Reconciliation Act created the CMS’ Medicaid Rebate Program in 1990. In order to be reimbursed by the federal government, and as a prerequisite for entry into the Medicaid and Medicare Part B markets, the Act requires drug manufacturers to offer formula based rebates on certain outpatient drugs.

To mitigate the unintended consequences of the rebate program — a rise in prescription drug costs for safety net hospitals and other entities that provide health care services to low income patients — Congress passed the Veterans Health Care Act of 1992 which created Section 340B of the Public Health Service Act. The Act requires pharmaceutical manufacturers to provide point of sale discounts to 340B-covered entities.

340B PROGRAM SNAPSHOT

The HRSA’s Office of Pharmacy Affairs administers the 340B Drug Pricing Program.

Qualifying hospitals and other 340B-covered entities receive discounts from pharmaceutical manufacturers participating in government-sponsored health care programs that have entered into a pharmaceutical pricing agreement with the Department of Health and Human Services Secretary.

Manufacturers participating in Medicaid agree to provide outpatient drugs to covered entities at significantly reduced prices. All covered entities must register and annually re-certify their eligibility as 340B providers, agree to adhere to all program requirements, and accurately report how they bill Medicaid fee-for-service drugs on the Medicaid Exclusion File (MEF).

The MEF is a coding mechanism employed by 340B-covered entities and states to prevent duplicate discounts for drugs subject to Medicaid rebates. By law, drug manufacturers are not allowed to provide a discounted 340B price and a Medicaid drug rebate for the same product.

WHY THIS MATTERS 

By authorizing the CMS to continue with its plan to cut the 340B Drug Pricing Program by $1.6 billion, Medicare hospital reimbursement payments for 340B hospitals will decrease exponentially. According to the hospital associations involved in the lawsuit, this decision will profoundly undermine patient access to affordable prescription drugs. Proponents of 340B program cuts disagree… Only time will tell.

O.W.B Public Affairs Digest
O.W.B Public Affairs Digest

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What Gets Measured Gets Managed: Medicaid Encounter Data Quality Submission Standards|White Paper

updated 02 October 2018

What Gets Measured Gets Managed: Medicaid Encounter Data Quality Submission Standards| White Paper

What Gets Measured Gets Managed: Medicaid Encounter Data Quality|White Paper
What Gets Measured Gets Managed: Medicaid Encounter Data Quality|White Paper

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