Biosimilar dispute headed to the Supreme Court

Biosimilar manufacturers will soon have a definitive answer on the timing of giving notice of commercial marketing, thanks to the Supreme Court. On January 13, 2017, the Court granted and consolidated Sandoz, Inc.’s petition for writ of certiorari and Amgen, Inc.’s conditional cross-petition for writ of certiorari. The dispute appeals the Federal Circuit’s July 21, 2015 decision holding that Amgen was entitled to an additional 180-day marketing exclusivity period because of Sandoz’s late notification of its intention to market a biologic product that is biosimilar to Amgen’s Neupogen® (see Court interprets biosimilar ‘enigma’ in favor of abbreviated biologic license applicant, Health Law Daily, July 22, 2015).

The Court also granted Apotex, Inc.’s motion for leave to file a brief as amici curiae; Apotex was involved in a similar dispute with Amgen (see Biosimilar applicant must give 180-day post-licensure notice to reference sponsor, Health Law Daily, July 6, 2016), though the Court denied Apotex’s petition for writ of certiorari earlier this term (see SCOTUS denies cert in biosimilar licensing dispute, Health Law Daily, December 12, 2016).

The Biologics Price Competition and Innovation Act (BPCIA), which was passed in 2010 as sections 7001-7003 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), created an abbreviated pathway for FDA approval of a “biosimilar” biologic product. Amgen originally brought suit against Sandoz in federal court asserting various violations of Amgen’s approved license for its cancer-fighting biologic Neupogen (filgrastim) and infringement of Amgen’s patent for a particular method of using filgrastim. The Court will be hearing arguments relating to Sandoz’s question regarding the 180-day notice of commercial marketing and Amgen’s cross-petition on the optionality of a process to settle patent disputes known as the “patent dance” (see Shall we dance? Biosimilars step toward new legal and regulatory future, Health Law Daily, March 31, 2016).

Makeup of the Court

Since the February 13, 2016, death of Justice Antonin Scalia, there have been eight Justices sitting on the Court. President Barack Obama’s nominee to replace Scalia, D.C. Court of Appeals Chief Judge Merrick Garland, was not considered by the Senate; President-elect Donald Trump plans to nominate a successor early into his term. In order to receive a vote in cases pending before the Court, a Justice must be seated on both the day of the oral argument and the day the written decision is released. Trump’s nominee will only be part of the decision if he or she is confirmed and duly sworn in before the oral arguments, which are not yet scheduled.

How will access to contraception coverage fare in light of the ACA repeal?

With the uncertainty about continued contraception coverage, a number of states have either enacted or introduced legislation to ensure that individuals continue to have access to contraception coverage and the number of women inquiring about birth control has increased. Since the November election and, in the wake of the imminent repeal of Obamacare, requests for intrauterine devices (IUDs) have been increasing significantly. Cecile Richards, President of Planned Parenthood, told CNN on January 9, 2017, that the demand for IUDs, a form of long-term birth control, has shot up 900 percent at Planned Parenthood branches because women “are desperately concerned that they will lose their access to health care,” SFGate news reported.

A December 7, 2016, Kaiser Family Foundation report that addressed private insurance coverage of contraception stated that many states have mandated minimum benefits for decades, including contraceptive coverage. Moreover, since the passage of the Affordable Care Act (ACA) (P.L. 111-148), states have strengthened and expanded the federal contraceptive coverage requirement. Among those states that have recently adopted contraceptive laws expanding ACA mandates for contraceptive coverage are New York, California, Oregon, Illinois, and Vermont.

New York

On January 11, 2017,  New York Attorney General Eric T. Schneiderman introduced “The Comprehensive Contraception Coverage Act of 2017” (CCCA), legislation that would provide access to cost-free contraception for women and expand coverage to men to ensure the continuation of contraception coverage under state law in light of Republicans’ goal of repealing the ACA.  The CCCA would (1) statutorily require state-governed health insurance policies to provide cost-free coverage for all FDA-approved methods of birth control, including emergency contraception, (2) prohibit insurance companies from “medical management” review restrictions that can limit or delay contraceptive coverage; (3) cover men’s contraceptive methods and bring their insurance coverage in line with the benefits enjoyed by women; and (4) allow for the provision of a year’s worth of a contraceptive at a time.

Crain’s New York Business addressed a number of items that are at stake in terms of women’s access to health care in New York under Donald Trump’s presidency. Although New York’s contraception legislation “has taken on new urgency for advocates since Trump’s victory,” the bill faces opposition from insurers because the provisions go beyond the ACA mandates, Crain’s predicted. In addition, Crain’s pointed out that Republicans in Congress will renew their efforts to defund Planned Parenthood, noting that access to services such as breast exams, Pap tests, STD screenings and family planning are most likely at risk of elimination for female Medicaid enrollees. Finally, abortion rights in New York might be curtailed if President-elect Trump’s Supreme Court judge appointee provides the Court with a majority of votes to overturn Roe v. Wade, the case that affirmed a woman’s constitutional right to an abortion under the 14th amendment. New York state law allows an abortion after 24 weeks only if it’s a matter of life and death for the woman, while constitutional law allows a woman to get a late-stage abortion if an anomaly poses a serious risk to her health or makes the fetus unviable, Crain’s explained.

Other States

In 2014, California passed the Contraceptive Coverage Equity Act of 2014 that requires plans to cover prescribed FDA-approved contraceptives for women without cost-sharing. In April of 2016, under the law, girls and women are able to drop by their neighborhood pharmacy and pick up birth control such as pills, patches, and injections without a doctor’s prescription but must speak with a pharmacist and fill out a questionnaire. Starting in January 2016, health plans were required to provide access to the full range of contraceptive methods approved by the FDA, including a variety of IUDs, for all insured individuals without cost-sharing, delays, or denial of coverage.

In 2015, Oregon passed two laws in 2015  expanding women’s access to birth control that became effective January 1, 2015.  HR2879 permits pharmacists to prescribe hormonal contraceptive patches and self-administered oral hormonal contraceptives, while HR3343 requires insurers to pay for a three-month supply of contraceptives when first prescribed, followed by a 12 month supply of contraceptives regardless of whether the woman was insured by the same plan at the time of the first dispensing. This law applies to oral contraceptive pills, the patch, and the vaginal ring.

The State Journal Register reported that Illinois adopted House Bill 5576, which will take effect January 1, 2017. Under the law, all ACA options must be covered without co-payments or deductibles, at least for women covered through health plans regulated by the state and plans that cover state employees, retirees, and their dependents. In addition, insurance companies must allow women to get a 12 month supply all at once.

The Burlington Free Press reported that Vermont legislation includes mandates from the ACA in the state law, but also expands upon the mandates to include additional birth-control methods, such as vasectomies. The bill specifies the 12 contraceptive products and services that must be included in health insurance plans as well as restrictions on cost-sharing for contraceptive services. It directs the Department of Vermont Health Access to establish 15 value-based payments for the insertion and removal of long-acting reversible contraceptives comparable to those for oral contraceptives.

Conclusion

Whether Congress repeals the ACA mandates requiring health insurance plans to provide contraceptive coverage and defunds Planned Parenthood is not certain. As of this writing, Congress has already taken initial steps to repeal the law. It remains to be seen if the actions the states have taken to ensure that both men and women have access to contraception under state law will hold up, and whether states that have introduced bills to ensure coverage will progress to enactment in the face of strong opposition.

 

High Court won’t hear case alleging discriminatory Medicare claims denial scheme

The U.S. Supreme Court declined to hear a case alleging that HHS participated in a racially discriminatory scheme of Medicare claims denials. The Fifth Circuit dismissed Edwards v. Burwell for lack of subject matter jurisdiction and failure to state a claim due to untimely filing, failure to specify improperly denied claims, and sovereign immunity. The High Court denied certiorari without comment.

A Texas physician was subject to a Medicare review process between 1997 and 2001 that resulted in denial of most of his claims. Most of those denials were successfully overturned on appeal, but the physician claimed that he was forced to close his practice in 2001 as a result of the initial denials. He filed a lawsuit against HHS, the HHS Secretary, and other unknown agents in 2014, alleging that his claims were initially denied as a result of racial profiling.

In affirming the district court’s dismissal of the doctor’s claims, the Fifth Circuit stated that the claims were filed outside of the 60-day window for judicial review required by 42 U.S.C. § 405(g) and were barred under § 405(h), which holds that a suit against the government or its officers or employees cannot be brought for Medicare actions. Furthermore, the physician failed to specify those claims that were not reversed on appeal (see No jurisdiction for discrimination suit based on reversed claim denials, Health Law Daily, August 3, 2016). He then filed his ultimately-denied petition for certiorari.

Kusserow on Compliance: Court rules against HHS and orders end of Medicare claims appeal backlog

The U.S. District Court for the District of Columbia has ordered HHS to eliminate pending Medicare claims appeals and outlined a schedule for reducing the backlog. Failure to meet these deadlines will permit claimants to move for default judgment in their favor. This would apply to Medicare appeals that have been pending at the administrative law judge (ALJ) level without a hearing for more than a year. DHHS is obligated to submit a progress report every 90 days on reducing the backlog. This action is the latest in the 2.5 year pending litigation initiated by the American Hospital Association (AHA) and several hospitals.  The Office of Medicare Hearings and Appeals (OMHA) has been unable to comply with the 90-day statutory deadline for appeals, resulting in a backlog of almost 1 million pending appeals.  Last June, the Government Accountability Office (GAO) reported the failure to meet statutory deadlines for the resolution of appeals, noting they had fallen years behind in the backlog. Following this, the OMHA placed a moratorium on accepting new appeals requests in order to catch up on pending appeals, which did little to reduce the backlog.

Dr. Cornelia Dorfschmid is a leading expert on dealing with Medicare claims appeals and has been assisting clients with these kinds of issues for 25 years. She noted that as a result of the actions by the Federal Court, the appeal process may begin to function again as it was expected to do. If a provider has a concern about demand letters coming from government agencies or their contractors, she offers the following advice on how to deal with them:

  1. Correct interpretation of the projected estimate. The first step in assessing the exposure to a demand letter is to determine whether the estimate was projected from a random sample that was based on the correct interpretation and application of the various medical documentation requirements and payer coverage rules. If the medical review, the application of coverage criteria, and case-by-case review findings can be challenged in an appeal or a quality assurance process, the overpayment estimate derived from the sample would not be tenable.
  2. Statistically valid random sample. A demand for overpayments must be generated from a statistically valid random sample; and if it not then the validity of the projection of the total overpayment estimate is difficult to defend.
  3. Confidence and precision.   If each sampled case was reviewed correctly and the sample was a statistically valid random sample, acceptable confidence (i.e, degree of certainty that the sample correctly depicts the universe) and precision (i.e., range of accuracy) are the third piece needed for a quality estimate of the total overpayment in the universe.

Richard P. Kusserow served as DHHS Inspector General for 11 years. He currently is CEO of Strategic Management Services, LLC (SM), a firm that has assisted more than 3,000 organizations and entities with compliance related matters. The SM sister company, CRC, provides a wide range of compliance tools including sanction-screening.

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Copyright © 2016 Strategic Management Services, LLC. Published with permission.