Merle M. DeLancey, Jr. ●
On November 27, the Administration announced another blue-ribbon panel to bolster the domestic manufacturing of pharmaceuticals. This one is called the Supply Chain Resilience Council. Co-chairs of the Council are Lael Brainard, Director of the White House National Economic Council, and Jake Sullivan, the White House National Security Advisor. Among the other 25 Council members are multiple agency Secretaries; the U.S. Trade Representative; the Chair of the White House Council of Economic Advisers; and the Directors of National Intelligence, the Office of Management and Budget, and the Office of Science and Technology Policy. The Council does not include any industry representatives.
A major part of the Council’s plan to bolster domestic manufacturing is providing the Department of Health and Human Services (“HHS”) with expanded authorities under Title III of the Defense Production Act (“DPA”) to invest in domestic manufacturing of essential medicines, medical countermeasures, and other critical inputs deemed crucial for national security. HHS will be granted DPA authority beyond what it was given during the COVID pandemic.
Continue reading “Biden Administration Prioritizing Domestic Production of Pharmaceuticals . . . Again?”
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Merle M. DeLancey Jr. will serve as a speaker for the American Conference Institute (“ACI”) “BIG FOUR” Pharmaceutical Pricing Boot Camp, taking place May 18–19, 2022, as an interactive live virtual conference.
Michael Grivnovics, Director, Federal Supply System, Contracts Division, Veterans Affairs Office of Inspector General, will join Merle to present the “Special Focus on FSS Post Award Compliance and Audits” session on May 19 at 9:00 a.m. EDT.
For more details, visit our website.
Jay P. Lessler, John M. Clerici, and Merle M. DeLancey Jr.
President-elect Biden plans to nominate California Attorney General Xavier Becerra to serve as Secretary of the U.S. Department of Health and Human Services (“DHHS”). The current Administration has frustrated the pharmaceutical industry with numerous Executive Orders and proposed rules and regulations trying to impact drug pricing. DHHS’s interim final rule implementing a Most Favored Nations Model (i.e., an international pricing index) for reimbursement of certain Medicare Part B drugs is the most recent example.
Numerous pundits suggested that pharmaceutical companies manufacturing vaccines and other drugs to respond to the COVID-19 pandemic waited until after the November election to announce their progress. The rationale was that the companies would prefer working with a Biden Administration rather than suffer through four more years of acrimony with the Trump Administration. The Becerra announcement, however, could indicate the pharmaceutical industry is not yet out of the woods. Continue reading “What Could a DHHS Secretary Becerra Mean for the Pharmaceutical Industry?”
Merle M. DeLancey Jr.
On Sunday, while everyone was watching the return of NFL football, the Administration was busy fulfilling a promise it made in July to lower drug prices paid by the United States and Medicare beneficiaries by tying pricing to certain foreign countries.
In July, the Administration issued three Executive Orders concerning drug pricing and access to critical therapies. At that time, the Administration also announced that, unless the pharmaceutical industry proposed a plan that would decrease prices paid by Medicare Part B by August 24, the Administration would move forward with its own plan. Apparently, no agreement with the industry was reached because on Sunday the Administration announced its own plan.
In what is being called the “Most Favored Nations” Executive Order, the Administration is re-starting its efforts to reduce the prices the United States pays for drugs under Medicare Parts B and D. The Order uses the “most-favored-nation price” as the benchmark for prices to be paid by the United States. Most-favored-nation price is defined as the lowest price, after adjusting for volume and differences in national gross domestic product, for a pharmaceutical product that the drug manufacturer sells in a comparable member country of the Organisation for Economic Co-operation and Development (“OECD”).
Perhaps most surprising is the increased scope of the Order. The Order goes beyond what was proposed in July by seeking to link not only Medicare Part B drug prices but also Medicare Part D prices to lower prices paid by other countries. With respect to both Medicare Parts, the Department of Health and Human Services’ (“HHS”) “payment model” is to test whether poor clinical outcomes improve as a result of patients paying lower prices—no more than the most-favored-nation prices—for certain high-cost pharmaceuticals and biologics.
While the Order makes for a snappy sound bite, any potential benefits of lower drug prices will not be seen anytime soon. First, HHS will need to complete its rulemaking, which could have its own challenges. For example, in November 2018, HHS published an Advance Notice of Proposed Rulemaking (“ANPR”) proposing to implement an international reference pricing payment model for use by Medicare and Medicaid. Ultimately, nothing became of the ANPR. Even then, implementation of the contemplated programs is precarious. Industry opposition to the Order has been palpable and any HHS plan will likely face legal challenges that could substantially delay implementation.
Merle M. DeLancey Jr., Jay P. Lessler, and James R. Staiger
The Federal Circuit’s recent decision in Acetris has left many contractors scratching their heads and asking questions. To recap, on February 10, 2020, the Federal Circuit held that, under the Federal Acquisition Regulation (“FAR”), to qualify as a “U.S.-made end product” under the Trade Agreements Act (“TAA”), a drug must be either “manufactured” in the United States or “substantially transformed” in the United States. (See Federal Circuit Holds Generic Drugs Manufactured in the U.S. from API Produced in India Qualify for Sale to U.S. under Trade Agreements Act (Acetris Decision).) This is a stark change from the Government’s long-held position that manufacturing and substantial transformation were one in the same.
As a result of the Acetris decision, federal contractors seeking to comply with or maintain compliance with the TAA are facing many questions. Some of the more prominent questions are below. Continue reading “After Acetris Decision, Trade Agreements Act Compliance Questions Abound: Contractors Need Guidance”
Merle M. DeLancey Jr.
The Department of Veterans Affairs (“VA”) National Acquisition Center (“NAC”), which administers the VA Federal Supply Schedule (“FSS”) Program, has already had a busy year. Among other procurement streamlining activities, the NAC currently is in the process of refreshing all nine (9) of its FSS solicitations to incorporate the most recent regulations and provide updates and clarifications.
Last month, the NAC updated the open and continuous Solicitation for Pharmaceuticals—Schedule 65 I B Pharmaceuticals FSS contract. The NAC issued Mass Modification 0006 and Solicitation Refresh 8. The Modification and Refresh update and incorporate procurement regulations and update or clarify FSS Program policy changes since the last refresh in February 2014, as amended. Refresh 8 applies to all companies submitting FSS proposals (for new contracts and renewals) after June 21, 2018. The Mass Modification is a standard bilateral modification to existing FSS terms and conditions, which the NAC is requesting manufacturers sign and return by July 30, 2018. Continue reading “Department of Veterans Affairs Updates Pharmaceutical Federal Schedule Supply”