IHA Daily Briefing: Jan. 4

January 4, 2021
HHS Issues Advisory Opinion on 340B Discounts
Courts Block MFN Model Interim Final Rule
CMS Price Transparency Requirements Now in Effect
State, National, Global COVID-19 Updates
IDPH Tracking COVID-19 Variant
FDA Update on Additional Pfizer COVID-19 Vaccine Doses
Briefly Noted

HHS Issues Advisory Opinion on 340B Discounts
On Dec. 30, 2020, the U.S. Dept. of Health and Human Services’ (HHS) Office of the General Counsel (OGC) issued an advisory opinion stating that 340B discount prices must be provided to covered outpatient drugs when contract pharmacies are acting as agents of covered entities. The action follows recent moves by drug manufacturers to block 340B drug discounts and demand more data from hospitals and health systems participating in the program.

"To the extent contract pharmacies are acting as agents of a covered entity, a drug manufacturer in the 340B Program is obligated to deliver its covered outpatient drugs to those contract pharmacies and to charge the covered entity no more than the 340B ceiling price for those drugs," HHS General Counsel Robert Charrow wrote in the advisory opinion.

Although it lacks the force of law, the advisory opinion represents the current views of HHS. In December, five national hospital organizations, including the American Hospital Association and 340B Health, filed a lawsuit against HHS over the agency’s failure to enforce program requirements. IHA will be joining an amicus brief to be filed by state hospital associations in support of the lawsuit in the coming months.


Courts Block MFN Model Interim Final Rule
On Dec. 23, 2020 a federal judge issued an order that temporarily blocks the Centers for Medicare & Medicaid Services’ (CMS’) Most Favored Nation (MFN) interim final rule on drug prices that had been scheduled to take effect last Friday. The rule is intended to lower prescription drug costs for certain high-cost Medicare Part B drugs by aligning prices with those paid in similar countries. A lawsuit against the rule had been filed on Dec. 4 by the Association of Community Cancer Centers, the Pharmaceutical Research and Manufacturers of America, the Global Colon Cancer Association and the National Infusion Center Association. The lawsuit asserted that the rule exceeds the statutory authority provided to the Centers for Medicare & Medicaid Services, raises serious constitutional questions and improperly fails to follow required rulemaking procedures.

Then on Dec. 28, a second federal court blocked implementation of the MFN Model until CMS completes the rulemaking process, which requires the agency to solicit comments on a proposal and respond to those comments before implementing a new payment model.

AHA issued a statement on the first court ruling from Executive Vice President Tom Nickels:

“The AHA is pleased that Judge Blake has granted a temporary restraining order to prevent the Most Favored Nation Model interim final rule from taking effect on January 1. Hospitals and health systems have very deep concerns about the substance and legality of this model, and the AHA filed a Declaration with this lawsuit expressing how the model could negatively impact hospitals, health systems and the patients they care for. Instead of holding drug companies accountable and lowering drug prices, this model simply slashes payments to hospitals for the drugs they must purchase to treat their patients. These cuts will ultimately lead to less access to care for patients and communities. The AHA again urges the court to reject this model as illegal and for the Administration to replace it with a real effort at drug pricing reform.”


CMS Price Transparency Requirements Now in Effect
The Centers for Medicare & Medicaid Services’ final price transparency rule requires that all hospitals must make public their negotiated rates in specific file formats on their websites as of Jan. 1, 2021. The public, media and vendors are now looking at this information on hospital websites.

To assist members in responding to inquiries, see an IHA memo for talking points, an infographic and other resources.

On Dec. 29, 2020, a federal appeals court ruled against the American Hospital Association’s (AHA’s) legal challenge to the rule. In a statement, AHA General Counsel Melinda Hatton said, “America’s hospitals and health systems support the goal of increasing price transparency by making patient out-of-pocket cost estimates easier to access and understand. Our focus remains on providing patients with the knowledge they actually need to make informed decisions about their health care. That is why we are disappointed in today’s decision to uphold the District Court rejection of hospitals’ challenge to the rule. Further, the decision to decline a stay in enforcement ignores the overwhelming burden of the pandemic on hospitals.

“The AHA continues to believe that the disclosure of privately negotiated rates does nothing to help patients understand what they will actually pay for treatment and will create widespread confusion for them. We also believe it will accelerate anticompetitive behavior among commercial health insurers and hinder innovations in value-based care delivery. Lastly, the requirement imposes significant costs on care providers at a time when scarce resources are needed to fight COVID-19 and save lives. For these reasons, the AHA has urged the incoming administration to evaluate whether the rule should be revised and to exercise enforcement discretion for the duration of the public health emergency. We are reviewing the decision carefully to determine next steps.”


State, National, Global COVID-19 Updates
The Illinois Department of Public Health (IDPH) announced today 5,059 new confirmed and probable COVID-19 cases and 79 deaths.

The total number of cases in the state is 984,880 in 102 counties, with a total of 16,834 deaths. IDPH says that in the past 24 hours, 48,254 test specimens have been processed, with a positivity rate of 10.5%. The preliminary seven-day statewide positivity rate for cases as a percent of total tests from Dec. 28 – Jan. 3 is 8.6%, and the seven-day test positivity rate is 9.8%.

Statewide COVID-19 hospitalizations in the past 24 hours increased from 3,817 patients to 3,948 patients. Of that figure, 816 patients were in the ICU, with 471 patients on ventilators.

Today’s Centers for Disease Control and Prevention (CDC) figures showed more than 20.5 million confirmed and presumptive positive cases of COVID-19 in the U.S. (a daily increase of more than 212,000 cases), with 350,664 deaths.

Today’s WHO Coronavirus Disease Dashboard showed more than 83.9 million COVID-19 cases globally (a daily increase of more than 583,000 cases), with more than 1.83 million deaths. The Region of the Americas (includes the U.S.) continues to lead the world with more than 36.6 million cases and more than 876,000 deaths.


IDPH Tracking COVID-19 Variant
The Illinois Dept. of Public Health (IDPH) is now tracking a new variant of the virus that causes COVID-19, which has been identified in the United Kingdom and reported in at least three states in the U.S. but not yet in Illinois. The U.S. cases are not known to be linked to travel, which could indicate community spread. Illinois is increasing its surveillance for the variant by performing genomic sequence testing on an increased number of specimens that have been collected.

"Viruses are constantly changing through mutation and variant virus are expected," said IDPH Director Dr. Ngozi Ezike. "At this time, we have no evidence that infections by this variant cause more severe disease or death. However, early study shows the variant may spread more easily and quickly. We will continue to work with academic partners, laboratory researchers, physicians, and the Centers for Disease Control and Prevention (CDC) to monitor for cases."

Public health experts are working to better understand the potential impact of this variant, including how the variant spreads and how it affects people who are infected.


FDA Update on Additional Pfizer COVID-19 Vaccine Doses
Late last month, the U.S. Food and Drug Administration (FDA) posted an updated letter of authorization, health care provider fact sheet and frequently asked questions regarding the number of Pfizer-BioNTech doses in a vial. These updates are consistent with previous FDA advice that it would be acceptable to use every full dose obtainable (the sixth, or possibly even a seventh) from each vial, pending resolution of the issue. However, since the vaccine does not contain preservative, it is critical to note that any further remaining product that does not constitute a full dose should not be pooled from multiple vials to create one.


Briefly Noted
On Dec. 27, President Trump signed into law a $900 billion COVID-19 stimulus/relief package along with an annual spending bill totaling $1.4 trillion, avoiding a government shutdown.

The Illinois House is now scheduled to convene Jan. 8 in Springfield for a “lame-duck” session that could last until Jan. 13 —the date a new legislative session will convene. State senators have been told to prepare for a similar schedule.

Governor J.B. Pritzker today announced that he is appointing Dana Popish Severinghaus Director of the Illinois Dept. of Insurance. Popish Severinghaus was formerly Legislative and Regulatory Counsel at Allstate Insurance Company where she advised Allstate and its subsidiaries on legal, regulatory and legislative matters across the Midwest. Before that, she served as Senior Policy Advisor at the State of Illinois in Central Management Services where she saw oversaw the Bureau of Benefits. Prior to that, Popish Severinghaus served as the Director of Government Relations for Blue Cross Blue Shield of Illinois.

State Senator Andy Manar (D-Bunker Hill) today announced he is resigning from the Illinois Senate on Jan. 17. Governor Pritzker announced that Manar will become one of his senior advisors on Jan. 19, advising him on a range of issues, including downstate economic revitalization, appropriations, and COVID-19 recovery efforts.