HealthCare Roundtable e-News – January 26, 2021

Roundtable Schedules Briefing on Generic Drug Price-Fixing Scheme

Wednesday, February 3rd at 2:00 PM (EST)

Over the past several years, the Roundtable has been tracking a significant Department of Justice (DOJ) investigation focused on 20 of the largest generic drug manufacturers that has important implications for our plan members. In 2017, the DOJ launched a criminal investigation accusing these companies of a widespread price-fixing scheme that has now resulted in criminal charges and over $600 million in criminal fines to the companies that have admitted wrongdoing. The cooperation of these companies with the DOJ is expected to significantly advance the government’s investigation and result in more criminal indictments/charges. Today, numerous lawsuits have been filed by major hospital systems and other entities that purchase large quantities of generic drugs. We believe Roundtable members are likely to have significant claims that as part of a group could lead to the recovery of damages. As such, the Roundtable Board has agreed to convene health plan members and other interested health plans to discuss the DOJ investigation in more detail and explore interest in recovery action.

If you are interested in participating in this briefing, please contact Tom Lussier ( to receive a link to the Zoom Briefing. This briefing is limited to representatives of public sector health plans.

SAVE THE DATE: Webinar Regarding Roundtable Response to Trump Administration Rebate Rule

Wednesday, February 10th at 2:00 PM (EST)

Given the significant impact the Rebate Rule will have on Roundtable members, we intend to continue to actively engage on the issue. The engagement will likely develop on three fronts, including: litigation regarding the lawfulness of the Trump rule; an advocacy strategy that would focus on the Biden Administration and Congress; and options for implementation of the rule should that be necessary.

To advance a discussion of these various strategic options, the Roundtable will hold a webinar on Wednesday, February 10th at 2:00 PM (EST). The webinar will feature presentations on each of these possible options and a discussion of how the Roundtable can best coordinate effort among our members and related allies.

Additional details regarding the webinar presentations, together with a Zoom link, will be provided in next week’s Weekly e-News.

President Biden Issues Immediate Executive Actions to Reverse Last-Minute Trump Administration Policies

In his first three days in office, President Joe Biden signed a series of executive orders reversing several Trump administration policies and freezing agency rules that have not yet gone into effect. The executive actions taken by Biden, including 9 executive orders, range from halting funding for the Mexican border wall to implementing a mask mandate on federal property.

The new administration froze several regulations released by HHS in the last weeks of Trump’s presidency, issued new drug and device policies, and overruled FDA chief Stephen Hahn’s appointment of an acting chief counsel. The regulatory freeze affects all rules that have not been published in the Federal Register, according to a memo from White House Chief of Staff Ronald Klain. The memo also suggests that agencies consider delaying the rules’ effective data of regulations that have been published but have not yet gone into effect for 60 days.

According to officials, Biden is also planning to reverse any Trump administration regulatory process executive orders, directing the acting White House Office of Management and Budget head to develop recommendations for improving regulatory review. Rob Fairweather is the acting OMB director while Biden’s nominee for, Neera Tanden, awaits confirmation. Former President Trump issued several regulatory-focused executive orders during his presidency that were criticized by former FDA officials who said the unprecedented review policies had delayed the agency’s ability to issue scientific and technical guidance to industry in a timely manner. (InsideHealthPolicy)

HHS May Look to Delay Final Rules on Rebate Ban and 340B Discounts in Regulations Review

Among the executive actions taken by President Biden in his first few days in office is a regulatory freeze of all last-minute rules passed by the Trump administration, enabling agencies to delay any qualifying rule while it’s being reconsidered. Among the rules in question is a regulation that lets HHS officials determine whether to delay final drug pricing rules that have not taken effect, including Trump’s ban on drug rebates and a rule that makes health clinics pass through 340B discounts they receive for insulin and epinephrine. The Roundtable senior staff and its members are actively engaged on issues related to the rebate rule delay.

While the rule freeze is a typical practice for an incoming administration, it’s unclear whether the freeze applies to final rules. In a memo (as referenced above) by White House Chief of Staff Ronald Klain, the Biden administration is advising agencies to freeze last-minute regulations and “consider postponing the rules’ effective dates for 60 days from the date of this memorandum,” the memo states. The Administrative Procedure Act requires 30 days between the publication of a final rule and its implementation, but rules that are considered major or economically significant require 60 days. Both the rebate and 340B rules both meet that criteria. The Roundtable will be sending more detailed analyses of these issues in the coming days. (InsideHealthPolicy)

The memorandum issued last week will leave it to the heads of HHS and CMS to determine whether they want to postpone final rules so the new administration may review them. Where both rules aim to lower drug prices, a priority for President Biden, it’s not clear if the administration will look to keep the rules or take a different approach to achieve the same goal. (InsideHealthPolicy)

Healthcare Experts Encourage New Administration to Focus on Regulatory Changes to Boost ACA Subsidies

Throughout the presidential campaign, President Biden made it clear that strengthening the Affordable Care Act would be one of his priorities in delivering health care options for all Americans. With Democrats now in control of Congress, the administration’s chances of passing legislation have increased, but several health experts have suggested the president may also be able to achieve his ACA goals through tactical administrative changes, starting with the ACA’s risk adjustment program.

Under the ACA, subsidies are benchmarked to the second-cheapest silver-level plan, which must have an actuarial value of about 70%. However, the law provides additional subsidies to silver-plan enrollees earning less than 250% of the federal poverty level, by which cost-sharing reductions (CSRs) might increase the actuarial value of silver plans to 73%, 87% or 94%, depending on an enrollee’s income. (InsideHealthPolicy)

In 2017, Former President Trump had cut off CSR payments as part of the GOP effort to dismantle the ACA, but experts now suggest that insurers may be able to address the loss of CSRs by hiking premiums for the silver-level products, which would, in turn, increase subsidies available to all enrollees. Many have pledged that implementing regulatory actions could maximize silver loading and make the coverage significantly more affordable. (InsideHealthPolicy)

“Trump, in an avowed attempt to destroy the ACA marketplace, endowed it with badly needed additional funding. The Biden administration should make sure it scoops up every dollar Trump left on the table,” said Andrew Sprung, a healthcare expert, and David Anderson, a research associate with Duke University’s Margolis Center for Health Policy.

Families USA, a non-partisan group focused on bringing affordable healthcare to consumers, has also been encouraging the incoming administration to use its regulatory authority to increase the value of the benchmark plans to the gold level. (InsideHealthPolicy)

Biden’s COVID-19 Action Plan Calls on Agencies and Exec Departments to Use DPA to Address Pandemic Response

On his second day in office, President Biden signed an executive order that will push all agencies to use the Defense Production Act to fill supply gaps for producing COVID-19 vaccines, testing, and protective equipment. The “Executive Order on a Sustainable Public Health Supply Chain” also calls on agency officials to provide recommendations for addressing pandemic supply pricing and sustaining long-term manufacturing capacity in the United States.

In the order, the president asks HHS, the Department of Defense, and the Department of Homeland Security to review the pricing of pandemic response supplies and for suggestions on how to direct the use of reasonable pricing clauses in federal contracts and investment agreements. While it’s unclear whether the DPA has been invoked, Biden stated he plans to invoke the act and has called on heads of executive departments and agencies to work with White House COVID-19 Response Coordinator Jeff Zients to take inventory of response supplies. (InsideHealthPolicy)

In its official COVID-19 pandemic response strategy, the administration stated the U.S. government “will not only secure supplies for fighting the COVID-19 pandemic, but also build toward a future, flexible supply chain and expand an American manufacturing capability where the United States is not dependent on other countries in a crisis.” The plan calls on HHS, the DOD, and DHS to develop and present a “Pandemic Supply Chain Resilience Strategy” that focuses on designing, building, and sustaining long-term manufacturing capabilities in the U.S. (InsideHealthPolicy)