Policy and Medicine

The Biden administration finalized a rule making it easier for regulators to punish insurance agents and brokers for violating rules when selling Affordable Care Act (ACA) plans. The rule expands the CMS' ability to immediately suspend a broker from the marketplace if they pose a risk to eligibility determinations, operations or enrollees. It also updates consent forms to ensure applications for plans are accurate and to prevent unauthorized changes to ACA coverage.

In its first advisory opinion of the year, the Department of Health and Human Services Office of Inspector General (OIG) issued a favorable advisory opinion on January 15, 2025 that addressed an arrangement by a pharmaceutical manufacturer to offer certain patients free access to a pharmaceutical product that has limited coverage by Federal health care programs.

The Biden administration's last Advance Notice on the Medicare Advantage program proposed a 4.3% hike on average to MA reimbursement, which would result in $21 billion in additional payments to insurers next year. The rule increases the average benchmark payment to MA plans by 2.2%, with insurers' coding for member sicknesses making up the rest of the projected payment jump. The rule also completes the phase-in of changes to insurers' coding practices that are unpopular with the industry.

The U.S. Department of Health and Human Services (HHS) wants to update the HIPAA security rule for the first time in more than a decade to bolster healthcare cybersecurity. On January 6, the Office for Civil Rights (OCR), which enforces HIPAA, proposed changes to the regulation that aims to clarify and offer more specific instruction on securing electronic health data.

Teva Pharmaceuticals recently sued the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS) over its implementation of the drug price negotiation program baked into the Inflation Reduction Act (IRA). In the Complaint, Teva refers to its "unique position" as a developer of both innovative medicines and high-quality generic drugs and biosimilars.

Purdue Pharma and the Sackler family have recently reached a $7.4 billion settlement in principle to resolve thousands of lawsuits alleging that OxyContin propelled a widespread opioid addiction crisis in the United States. This new settlement replaces the former settlement of up to $6 billion with civil immunity for the Sackler family. The new settlement, negotiated by fifteen states, involves a $6.5 billion payment from the Sacklers and a $900 million payment from Purdue.

The United States Department of Justice (DOJ) announced $2.9 billion in False Claims Act settlements and judgments in Fiscal Year (FY) 2024. According to the DOJ, the government and whistleblowers were part of 558 settlements and judgments, the second highest total after 2023, which saw 566 recoveries. Whistleblowers filed 979 qui tam lawsuits in FY 2024, the highest number in a single year.

Recently, a bipartisan group re-introduced the Ensuring Pathways to Innovative Cures (EPIC) Act in the United States House of Representatives. The legislation aims to fix the small molecule "pill penalty" in the Inflation Reduction Act, to encourage ongoing research and development investments into small molecule medicines.

At the end of 2024, a New Jersey jury partially acquitted Chad Beene, a former National Sales Manager for Main Avenue Pharmacy, in a conspiracy and kickback lawsuit. Federal prosecutors alleged that Beene and his co-conspirators created an illegal scheme by which they paid several marketing companies illegal kickbacks for obtaining prescriptions of "medically unnecessary" and "exorbitantly priced" compounded medications.

The Pioneer Institute recently released a study raising concern over the lack of transparency around the role pharmacy benefit managers (PBMs) play in serving patients. According to the study, a lack of competition, transparency, and oversight together make it difficult to understand who actually receives the benefits - are the savings passed on to patients or are they boosting the profits of the PBM "at the expense of patients, employers, and government entities"?