Funding

HEROES Act

The $3 trillion HEROES Act that passed the House May 15 includes health provisions, but the Senate will not vote on this bill, but instead is working on a smaller package to enact late June. The health provisions include:

• Provides $75 billion for a COVID-19 National Testing and Contact Tracing initiative and addresses the healthcare supply chain issues by allowing the FDA to destroy imported counterfeit devices, authorizing $100 million for the National Centers of Excellence in Continuous Pharmaceutical Manufacturing and directing the Biomedical Advanced Research and Development Authority (BARDA) to award contracts to enhance the manufacturing capacity of a COVID-19 vaccine.
• Provides $500 million through fiscal 2023 to increase the medical supply chain and maintain domestic reserves of critical medical supplies and shore up the Strategic National Stockpile.
• $1 billion for HRSA grants to establish or expand medical schools in underserved areas or that are minority-serving institutions.
• $175 million over two years for the Health and Human Services Department to establish a Public Health Workforce Loan Repayment Program.

Vaccines

Operation Warp Speed

Trump named General Gustave Perna, who directs the U.S. Army Materiel Command, as chief operating officer of “Operation Warp Speed,” likening it to the Manhattan Project effort to develop the atomic bomb. Former GlaxoSmithKline executive Moncef Slaoui is the project’s chief scientist. As part of the administration’s Operation Warp Speed, the FDA is speeding clinical trials of 14 vaccines and aiming to whittle down the list further, according to President Trump. The government is simultaneously ramping up production of those vaccines in the hopes that some will be approved. Trump said the administration will pay to produce vaccines while they’re still being tested so they will be ready for broad use if approved, but it’s not clear whether the vaccines will be made at government-funded sites or drug company facilities. Government-funded sites, created by the Obama administration, have been criticized in the past as costly to maintain, but the U.S. would have more control over price if the vaccines were produced at those facilities.

On May 20, HHS announced it will pay AstraZeneca $1.2 billion to research and make at least 300 million COVID-19 investigational vaccine doses, and the first doses could be delivered as early as October, though many say that’s probably an overly optimistic timeline. The vaccine, which Oxford University invented, will be made at a government-run facility built by the Obama administration under BARDA. By making the vaccine at a government-run facility, the U.S. government can keep the vaccine for domestic use amid global demand for limited doses. However, AstraZeneca says the 300 million doses are part of an initial delivery of 400 million doses – 100 million will go to the United Kingdom – and the company has the capacity to make 1 billion doses. AstraZeneca said it is working with the Coalition for Epidemic Preparedness Innovations (CEPI), Gavi the Vaccine Alliance and the World Health Organisation (WHO) are all working toward the fair allocation and distribution of the potential vaccine around the world. BARDA also awarded $483 million to Moderna to develop its vaccine and awarded $456 million to Johnson & Johnson’s subsidiary, Janssen, to develop a vaccine.

Meanwhile, last week, House Energy and Commerce Chairman Frank Pallone (D-NJ), Ranking Republican Greg Walden (R-OR), and Oversight and Investigations Subcommittee Chairwoman Diana DeGette (D-CO) sent a letter to the White House Coronavirus Task Force saying “a comprehensive COVID-19 vaccine plan must also take into account the decisions that will be necessary related to the allocation of a vaccine.” They requested a briefing on the White House’s vaccine development efforts by June 4.

Therapeutics

Development and Manufacturing

BARDA is also funding COVID-19 drug candidates and generic drugs used to treat hospitalized COVID-19 patients. Last week, BARDA awarded $354 to a Virginia start-up to make generic drug ingredients and finished products, $148 million to Janssen to develop antivirals, and $93 million to Regeneron to develop COVID-19 drugs. Despite this progress, many have found it a challenge to break through as over a 3-month period, BARDA has had 2,800 meeting requests and held 250 CoronaWatch meetings. It is overwhelmed with requests on a range of innovations to address COVID-19. However, it still has funding and is continuing to get through all requests and provide feedback before submissions for funding are made. Also, HHS will work with a team of private industry partners, led by Phlow, to establish critical generic drug and active pharmaceutical ingredient (API) manufacturing in the U.S. to mitigate drug shortages. Industry partners will work with the U.S. government to create a list of critically needed APIs and finished drug products and implement advanced manufacturing techniques, such as continuous manufacturing, to cut down on production costs and waste.

Testing

RADx

The National Institute of Biomedical Imaging and Bioengineering (NIBIB) is managing Rapid Acceleration of Diagnostics (RADx) and actively soliciting proposals. RADx plans to award up to $500 million across multiple projects to rapidly produce innovative SARS-CoV-2 diagnostic testing up to 100-fold above what is achievable with standard approaches by leveraging the NIH’s Point-of-Care Technology Research Network (POCTRN). G2G talked with RADx leadership and learned the program is solely concerned with rapid, accurate testing for positive or negative status, not whether a person had it in the past. Also, the plan is to fund many with small amounts of funding then filter down with more funding to a few. It is aiming to deliver innovative testing strategies as soon as late summer 2020 that can test every American. NIBIB is leveraging established partnerships with the FDA, CDC, CMS, and ASPR/BARDA.

RADx will financially support all phases of the product development pipeline, which includes early stage: transformative innovations based on novel testing strategies that have potential for major scale up as well as advanced stage: modification and optimization of existing SARS-CoV-2 testing approaches, including clinical laboratory tests, that can dramatically increase testing capacity. The optimal design features improve analytical performance, e.g., sensitivity, specificity, dynamic range, limit of detection, reliability, accuracy, speed (time to test result) and throughput; enhance operational performance through, e.g., development of a patient- and user-friendly design, use of alternative sampling strategies (e.g., saliva, exhaled breath), integration with mobile-devices, designs for home-based use or strategies to overcome bottlenecks with current testing approaches; and improve access and reduce the cost of testing.

Once notified of award, the award recipients are assigned a multi-disciplinary team of experts, the Deep Dive team or RADx team with extensive expertise in medical devices and diagnostics that can access additional resources from a diversity of technical, scientific, regulatory, and clinical experts in RADx’s growing network. The Deep Dive team will work to complete the GAITS assessment of the status of the project on a secure, dedicated website that will be created specifically for each project to support the planning process. In addition, VentureWell, a non-profit, will reach out within two business days of receipt of the award notification to facilitate the Participant Agreement and the RADx payment, which starts as low as $25,000. Within one week of starting the assessment, the Deep Dive team leader will decide when the project is ready to be reviewed by the full RADx Steering Panel. There are 4 possible outcomes of the review:

• Work Package 1: Less than about 4 weeks, will address any key significant risks or questions that need to be fully addressed before the solution effort can move into full development mode (Work Package 2).
• Work Package 2: This intense effort is focused on developing a solution and deploying it on RADx’s aggressive timeline.
• Refine the Plan: If the panel decides the plan is not ready, they will ask for refinement in specific areas.
• Do not Proceed: The combination of time pressure and performance requirements make the criteria for RADx projects exceedingly difficult to meet.

FDA Pulls 27 Antibody Tests

On May 21, the FDA listed 27 COVID-19 antibody tests that no longer are on the market under FDA’s March 16 policy that allowed tests to be marketed and distributed without FDA authorization. Antibody tests on this new removal list include those voluntarily withdrawn from the notification list by the test’s commercial manufacturer and those for which there is not a pending or issued Emergency Use Authorization (EUA). FDA expects that the tests on the removal list will not be marketed or distributed. On May 4, the FDA announced a revised guidance recommending that commercial manufacturers of antibody tests submit an EUA request within 10 business days from the date they notified FDA of their test validation or the date of publication of the revised policy, whichever was later. The FDA expects to continually update the removal list.

Home Testing

On May 20, Timothy Stenzel, head of FDA’s Office of Health Technology, announced it is open to authorizing COVID-19 at-home sample collection kits for over-the-counter (OTC) use, as long as sponsors demonstrate consumers can easily use the tests and interpret results without a healthcare professional’s oversight at an FDA Virtual Town Hall. This willingness to support OTC tests comes as the Government Accountability Office (GAO) states FDA approval of more at-home sample collection kits could help expand test access since currently, consumers must be prescribed a COVID-19 test, but also warns of potential accuracy issues. On May 16, the FDA granted an EUA to Everlywell’s test kit, the first standalone at-home COVID-19 test kit. Consumers who want the test must first be screened for COVID-19 symptoms or exposure to the disease using an online questionnaire that’s reviewed by a healthcare provider. The company then sends a test kit containing nasal swabs and a saline-filled tube to the consumer who self-collects a nasal sample at home. Patients send the sample overnight to a specific CLIA-certified lab so the sample can then be tested on either the LabCorp or Rutgers test platform. The two labs are authorized to test specimens collected using Everlywell’s kit are Fulgent Therapeutics and Assurance Scientific Laboratories. Patients access their results through Everlywell’s physician network and online portal. The test kit will cost $109 and is available to consumers this month.

Testing and Nursing Homes

The Centers for Medicare and Medicaid (CMS) is giving Medicare Administrative Contractors (MACs) broad authority to set payment rates for COVID-19-related tests in their respective jurisdictions until the agency comes up with national Medicare payment rates. There is generally no cost-sharing for Medicare patients receiving these tests, but nursing homes are struggling to obtain sufficient testing. On May 18, CMS recommended that all nursing home residents and staff receive COVID-19 testing before reopening, which has spurred new calls from the nursing home lobby for additional funding as they continue to face difficulties obtaining tests. CMS is not mandating testing, instead leaving the decision up to the states, but is claiming that testing should be done proactively in nursing homes and points out that the agency recently offered a pay rate of $100 for labs that do rapid-testing for COVID-19. In April, CMS called for states to work closely with nursing homes on acquiring tests and PPE. CMS Administrator Seema Verma thinks states have sufficient testing for all nursing home residents, while some in Congress and in states are calling to mandate testing in nursing homes. Some states, including New York and South Carolina, have already done so. On May 21, Chair Susan Collins (R-ME) and several senators on her Senate Special Committee on Aging expressed support for universal testing. Ranking Senator Bob Casey (D-PA) recently introduced a bill with Senator Sheldon Whitehouse (D-RI) to provide $20 billion in emergency funding to states, territories and tribal governments to support staffing, testing and PPE in nursing homes and other long-term care facilities. Whether mandated or not, to truly change nursing home coronavirus incidence rates requires funding as it would cost $440 million to test all nursing home residents and staff in the nation just once, according to the American Health Care Association and National Center for Assisted Living.

CURES 2.0

On  April 27,  Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) released the concept paper for their bipartisan “Cures 2.0.” The 12-page concept paper unveils high-level areas of focus for Cures 2.0, which will look to safely and efficiently modernize the delivery of health care in the wake of the coronavirus pandemic by addressing the following six areas:

• Public Health and Pandemic Preparedness: Address the nation’s pandemic surveillance and testing capabilities, support antimicrobial resistance product commercialization, expand vaccine education and surveillance, and create a COVID-19 Rare Disease Support Program and grants to help pay for medical care involving pandemics.
• Caregiver Integration: With many Americans receiving care at home, Cures 2.0 may create educational programs/training for caregivers to learn skills that enhance clinical visits.
• Patient Engagement: Aim to improve health literacy and access to health information, and thus empower patients in decision-making and taking steps to get well.
• Diversity in Clinical Trials: Essential to ensuring medical products are safer and more effective for patients, this provision works with regulators, industry, patients and researchers.
• FDA Modernization: The first Cures Act accelerated the development of digital health technologies through inclusion of the Software Act, but Cures 2.0 aims to ensure FDA’s regulatory framework is collaborative and inclusive of the various centers within the agency. This provision may also fund grants for innovative clinical trial design and patient-focused drug development and improve use of real-world data (RWD) and real-world evidence (RWE).
• CMS Modernization: Additional stakeholder feedback is sought on how the U.S. can keep pace with technological and scientific advances, and what specific provisions must be included in the final Cures 2.0 package.

Telemedicine

CMS issued a new rule to increase access to telehealth services, providing more coverage options for Medicare beneficiaries with kidney failure, and offering wider benefits for others with chronic diseases. The wide-ranging rule released May 22 is expected to save an estimated $3.65 billion over ten years. It encourages private plans that cover Medicare beneficiaries to increase telehealth offerings for those living in rural areas and allows patients with end-stage renal disease to access coverage through those Medicare Advantage plans. The rule implements changes made under the 21st Century Cures Act, which allows all Medicare beneficiaries with end-stage renal disease to enroll in a Medicare Advantage plan next year.

BARDA Politics

During his four-hour testimony before the House Energy and Commerce Health Subcommittee on May 14, Rick Bright, who was removed as head of HHS’ Biomedical Advanced Research and Development Authority (BARDA) last month and demoted to a smaller role at the NIH, told lawmakers the pandemic will worsen and the administration does not have an adequate plan for distributing COVID-19 vaccines and drugs. The previous week, Bright filed a whistleblower complaint alleging that he was demoted over his refusal to fall in line with the president’s assertions that hydroxychloroquine cures COVID-19. While Republican members led by Rep. Michael Burgess, MD (TX) tried to push Trump’s theory that hydroxychloroquine could be effective, Democrats highlighted Bright’s claims that Trump’s focus on hydroxychloroquine slowed the development of COVID-19 vaccines and drugs with real promise, such as remdesivir, because it distracted dozens of federal scientists, forcing them to set aside all other projects to put together the protocol in the 48-hour directive time period. Bright said the administration should finish plans for scaling up remdesivir production and his warnings of the need for a plan to distribute remdesivir were ignored and resulted in him being shut out from relevant meetings. He cautioned it may take longer to make a COVID-19 vaccine than many are anticipating despite some members of the White House Coronavirus Task Force say they expect a vaccine in a year and a half. Gary Disbrow, PhD, Bright’s deputy, is now the Acting BARDA Director and is following the direction of Assistant Secretary for Preparedness and Response Robert Kadlec, MD and HHS Secretary Alex Azar.

CDC Confusion

By combining test results that diagnose current coronavirus infections with test results that measure whether someone has ever had the virus, the Centers for Disease Control and Prevention (CDC) has conflated the results of two different types of coronavirus tests, distorting several important metrics and providing an inaccurate picture of the state of the pandemic. As a result, it overstates the country’s ability to test people who are sick with COVID-19. States have set quantitative guidelines for reopening their economies based on these flawed data points. Several states—including Pennsylvania, the site of one of the country’s largest outbreaks, as well as Texas, Georgia, and Vermont—are blending the data in the same way. Virginia was as well until mid-May, but it reversed course and Governor Ralph Northam (D), who is a doctor, apologized for the practice. Maine similarly started separating its data last week. Vermont authorities said they didn’t even know they were doing this. The absence of national guidelines has led to confusion about how testing data should be reported and this current practice that aggregates both kinds of testing suggests much broader diagnostic testing has occurred. If even a third of the country’s increase in testing is from expanded antibody testing, not viral testing, then the ability to detect an outbreak is much smaller than it seems. Unless the most populous states, such as Texas, Georgia, and Pennsylvania break down and share their data, there is no way to know how much of the recent increase in testing informs our understanding of the incidence rate versus the prevalence rate, where and at what pace to reopen, and how best to prepare and respond.

See above on coronavirus response for details.

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FDA:
Last week, the Food and Drug Administration Commissioner Stephen Hahn told the House Appropriations Agriculture-FDA Subcommittee that the president’s request of $6.2 billion in his budget proposal is critical to furthering the agency’s mission of ensuring the safety of food and medical products. The administration is seeking a 4.5% increase in funding over FY20.

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Drug Pricing:
The President’s FY21 budget includes an allowance to reduce the deficit through $135 billion in savings over the next decade through proposed drug pricing efforts. On March 10th, President Trump sent the drug pricing principles to guide Congress in drafting legislation. The bill must cap Medicare Part D beneficiaries’ annual out-of-pocket pharmaceutical costs and provide an option to cap monthly costs, protect seniors against the out-of-pocket cost cliff created by Obamacare, provide insurers with incentives to negotiate lower prices for expensive drugs, and limit price increases for drug manufacturers. Also, at the end of January, CMS released a block grant plan that would allow states to refuse coverage of certain prescription drugs while still receiving CMS’s drug rebates. This upset drug manufacturers who offer CMS reduced prices on the auspices that states will cover FDA-approved medicines and argue that the rule will deny access to medications for low-income patients who desperately need them. An evaluation released on March 9th projected that nationwide Medicaid block-grants would cut annual federal Medicaid funding by 10.5% and state contributions by up to 24.1%.

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Surprise Medical Billing:
There are currently three different legislative measures that would address surprise medical billing by capping the cost that patients would pay out-of-network providers at what they would pay their health worker providers. Congress is currently debating on a final version that would decide arbitration rules to settle how insurers and hospitals would absorb the discrepant costs. On March 11th, President Trump stated that COVID-19 patients would not receive surprise billing, but neither the House nor the Senate have agreed on a final version.

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Patient Data Ownership:
HHS Office of the National Coordinator for Health Information Technology (ONC) and Centers for Medicare & Medicaid Services (CMS) just finalized two rules giving Americans access to their medical information as they implement interoperability and patient access provisions of the 21st Century Cures Act and in line with President Trump’s MyHealthEData initiative, which empowers patients by giving access to their medical information so they can make better healthcare decisions. The ONC Final Rule identifies and finalizes the reasonable and necessary activities that do not constitute information blocking while establishing new rules to prevent “information blocking” practices (e.g., anti-competitive behaviors) by healthcare providers, developers of certified health IT, health information exchanges, and health information networks as required by the Cures Act. The ONC final rule updates certification requirements for health IT developers and establishes new provisions to ensure that providers using certified health IT have the ability to communicate about health IT usability, user experience, interoperability, and security including (with limitations) screenshots and video, which are critical forms of visual communication for such issues.

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The ONC final rule also requires electronic health records to provide the clinical data necessary, including core data classes and elements, to promote new business models of care. ONC’s final rule establishes secure, standards-based application programming interface (API) requirements to support a patient’s access and control of their electronic health information. APIs are the foundation of smartphone applications (apps). Building on the foundation established by ONC’s final rule, the CMS Interoperability and Patient Access final rule requires health plans in Medicare Advantage, Medicaid, CHIP, and through the federal Exchanges to share claims data electronically with patients. CMS took the first step towards interoperability by launching Medicare Blue Button 2.0 for Medicare beneficiaries in 2018. Medicare Blue Button 2.0 gives beneficiaries the ability to securely connect their Medicare Part A, Part B and Part D claims and encounter data to apps and other tools developed by innovators.

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The CMS final rule also establishes a new Condition of Participation (CoP) for all Medicare and Medicaid participating hospitals, requiring them to send electronic notifications to another healthcare facility or community provider or practitioner when a patient is admitted, discharged, or transferred. These notifications can facilitate better care coordination and improve patient outcomes by allowing a receiving provider, facility, or practitioner to reach out to the patient and deliver appropriate follow-up care in a timely manner. Finally, CMS is requiring states to send enrollee data daily beginning April 1, 2022 for beneficiaries enrolled in both Medicare and Medicaid.

See above on coronavirus response for details.

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FDA:

Last week, the Food and Drug Administration Commissioner Stephen Hahn told the House Appropriations Agriculture-FDA Subcommittee that the president’s request of $6.2 billion in his budget proposal is critical to furthering the agency’s mission of ensuring the safety of food and medical products. The administration is seeking a 4.5% increase in funding over FY20.

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Drug Pricing:

The President’s FY21 budget includes an allowance to reduce the deficit through $135 billion in savings over the next decade through proposed drug pricing efforts. On March 10th, President Trump sent the drug pricing principles to guide Congress in drafting legislation. The bill must cap Medicare Part D beneficiaries’ annual out-of-pocket pharmaceutical costs and provide an option to cap monthly costs, protect seniors against the out-of-pocket cost cliff created by Obamacare, provide insurers with incentives to negotiate lower prices for expensive drugs, and limit price increases for drug manufacturers. Also, at the end of January, CMS released a block grant plan that would allow states to refuse coverage of certain prescription drugs while still receiving CMS’s drug rebates. This upset drug manufacturers who offer CMS reduced prices on the auspices that states will cover FDA-approved medicines and argue that the rule will deny access to medications for low-income patients who desperately need them. An evaluation released on March 9th projected that nationwide Medicaid block-grants would cut annual federal Medicaid funding by 10.5% and state contributions by up to 24.1%.

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Surprise Medical Billing:

There are currently three different legislative measures that would address surprise medical billing by capping the cost that patients would pay out-of-network providers at what they would pay their health worker providers. Congress is currently debating on a final version that would decide arbitration rules to settle how insurers and hospitals would absorb the discrepant costs. On March 11th, President Trump stated that COVID-19 patients would not receive surprise billing, but neither the House nor the Senate have agreed on a final version.

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Patient Data Ownership:

HHS Office of the National Coordinator for Health Information Technology (ONC) and Centers for Medicare & Medicaid Services (CMS) just finalized two rules giving Americans access to their medical information as they implement interoperability and patient access provisions of the 21st Century Cures Act and in line with President Trump’s MyHealthEData initiative, which empowers patients by giving access to their medical information so they can make better healthcare decisions. The ONC Final Rule identifies and finalizes the reasonable and necessary activities that do not constitute information blocking while establishing new rules to prevent “information blocking” practices (e.g., anti-competitive behaviors) by healthcare providers, developers of certified health IT, health information exchanges, and health information networks as required by the Cures Act. The ONC final rule updates certification requirements for health IT developers and establishes new provisions to ensure that providers using certified health IT have the ability to communicate about health IT usability, user experience, interoperability, and security including (with limitations) screenshots and video, which are critical forms of visual communication for such issues.

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The ONC final rule also requires electronic health records to provide the clinical data necessary, including core data classes and elements, to promote new business models of care. ONC’s final rule establishes secure, standards-based application programming interface (API) requirements to support a patient’s access and control of their electronic health information. APIs are the foundation of smartphone applications (apps). Building on the foundation established by ONC’s final rule, the CMS Interoperability and Patient Access final rule requires health plans in Medicare Advantage, Medicaid, CHIP, and through the federal Exchanges to share claims data electronically with patients. CMS took the first step towards interoperability by launching Medicare Blue Button 2.0 for Medicare beneficiaries in 2018. Medicare Blue Button 2.0 gives beneficiaries the ability to securely connect their Medicare Part A, Part B and Part D claims and encounter data to apps and other tools developed by innovators.

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The CMS final rule also establishes a new Condition of Participation (CoP) for all Medicare and Medicaid participating hospitals, requiring them to send electronic notifications to another healthcare facility or community provider or practitioner when a patient is admitted, discharged, or transferred. These notifications can facilitate better care coordination and improve patient outcomes by allowing a receiving provider, facility, or practitioner to reach out to the patient and deliver appropriate follow-up care in a timely manner. Finally, CMS is requiring states to send enrollee data daily beginning April 1, 2022 for beneficiaries enrolled in both Medicare and Medicaid.