H.R. 6: The 21st Century Cures Act

H.R. 6: The 21st Century Cures Act
H.R. 6: The 21st Century Cures Act
Judith A. Johnson, Coordinator
Specialist in Biomedical Policy
Susan Thaul, Coordinator
Specialist in Drug Safety and Effectiveness
Erin Bagalman, Coordinator
Analyst in Health Policy
August 10, 2015
Congressional Research Service
7-5700
www.crs.gov
R44071
H.R. 6: The 21st Century Cures Act
Summary
On July 10, 2015, the House passed H.R. 6, the 21st Century Cures Act, on a vote of 344 to 77.
Eight amendments were offered; five were approved by voice vote, two failed by recorded vote,
and one was withdrawn. The House Energy and Commerce Committee, on May 21, 2015,
unanimously ordered to be reported H.R. 6 and the House Committee on Rules published a
committee print of the bill on July 2, 2015. On July 7, 2015, H.R. 6 was reported by the
Committee on Energy and Commerce (H.Rept. 114-190), and the House Committee on Ways and
Means was discharged from further consideration of the bill.
The bill would reauthorize the National Institutes of Health (NIH) through FY2018 and provide
other funding to the agency through FY2020. In addition, the bill would promote and encourage
more strategic planning for research conducted by NIH; change loan support for young, emerging
scientists; promote pediatric research; and encourage more collaborative research activities. The
bill also focuses on changes to the Food and Drug Administration’s (FDA’s) regulatory
procedures for drugs and devices by requiring the issuance of more guidance and increasing
regulatory flexibility in areas such as precision (or personalized) medicine, types of data that
could serve as evidence of safety and effectiveness, antibiotic drug development, orphan drugs,
and medical devices. The bill proposes additional funding for the FDA to support some of its
efforts in certain specified areas.
H.R. 6 consists of four separate titles. Title I focuses on discovery-related issues and is
concentrated on matters related to the NIH, including developing strategic plans, cultivating
young scientists, and promoting more collaboration among NIH researchers, grant recipients, and
institutions. Title II targets the development of new and more innovative drugs and medical
devices and the regulatory processes in place to consider these products. Title III includes
provisions related to the delivery of health care, including interoperability of electronic health
information technology and the treatment of disposable medical technologies. Title IV includes
Medicare and Medicaid changes being proposed to offset the costs of the NIH- and FDA-related
changes in Titles I, II, and III. These proposed offsets include changes in prior authorization
procedures for power mobility devices under Medicare, as well as a proposed drawdown in the
nation’s strategic petroleum reserve.
This report provides a brief summary of each provision of H.R. 6 as passed by the House on July
10, 2015. Each summary includes a brief description of current law and an explanation of how the
bill would change current law. A list of the abbreviations used throughout this report appears in
Appendix B.
Congressional Research Service
H.R. 6: The 21st Century Cures Act
Contents
Overview ......................................................................................................................................... 1
Summary of Provisions ................................................................................................................... 3
Section 2. NIH and Cures Innovation Fund ........................................................................ 3
Title I—Discovery..................................................................................................................... 7
Subtitle A—National Institutes of Health Funding ................................................................... 7
Section 1001. National Institutes of Health Reauthorization .............................................. 7
Section 1002. Prize Competitions ....................................................................................... 7
Subtitle B—National Institutes of Health Planning and Administration................................... 9
Section 1021. NIH Research Strategic Plan........................................................................ 9
Section 1022. Increasing Accountability at the National Institutes of Health .................. 10
Section 1023. Reducing Administrative Burdens of Researchers ...................................... 11
Section 1024. Exemption for the National Institutes of Health from the
Paperwork Reduction Act Requirements ........................................................................ 11
Section 1025. NIH Travel ................................................................................................. 12
Section 1026. Other Transactions Authority ..................................................................... 13
Section 1027. NCATS Phase IIB Restriction .................................................................... 13
Section 1028. High-Risk, High-Reward Research............................................................ 14
Section 1029. Sense of Congress on Increased Inclusion of Underrepresented
Communities in Clinical Trials ...................................................................................... 15
Subtitle C—Supporting Young Emerging Scientists ............................................................... 16
Section 1041. Improvement of Loan Repayment Programs of National Institutes
of Health ........................................................................................................................ 16
Section 1042. Report......................................................................................................... 17
Subtitle D—Capstone Grant Program ..................................................................................... 17
Section 1061. Capstone Award ......................................................................................... 17
Subtitle E—Promoting Pediatric Research Through the National Institutes of Health .......... 18
Section 1081. National Pediatric Research Network ........................................................ 18
Section 1082. Global Pediatric Clinical Study Network Sense of Congress .................... 18
Section 1083. Appropriate Age Groupings in Clinical Research ...................................... 19
Subtitle F—Advancement of National Institutes of Health Research and Data Access ......... 19
Section 1101. Standardization of Data in Clinical Trial Registry Data Bank on
Eligibility for Clinical Trials .......................................................................................... 19
Subtitle G—Facilitating Collaborative Research .................................................................... 20
Section 1121. Clinical Trial Data System ......................................................................... 20
Section 1122. National Neurological Diseases Surveillance System................................ 21
Section 1123. Data on Natural History of Diseases .......................................................... 21
Section 1124. Accessing, Sharing, and Using Health Data for Research Purposes .......... 22
Subtitle H—Council for 21st Century Cures ........................................................................... 23
Section 1141. Council for 21st Century Cures................................................................... 23
Title II—Development ............................................................................................................ 24
Subtitle A—Patient-Focused Drug Development ................................................................... 24
Section 2001. Development and Use of Patient Experience Data to Enhance
Structured Risk-Benefit Assessment Framework .......................................................... 24
Subtitle B—Qualification and Use of Drug Development Tools ............................................ 25
Section 2021. Qualification of Drug Development Tools ................................................. 25
Section 2022. Accelerated Approval Development Plan .................................................. 27
Subtitle C—FDA Advancement of Precision Medicine .......................................................... 28
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Section 2041. Precision Medicine Guidance and Other Programs of Food and
Drug Administration ...................................................................................................... 28
Subtitle D—Modern Trial Design and Evidence Development .............................................. 30
Section 2061. Broader Application of Bayesian Statistics and Adaptive Trial
Designs .......................................................................................................................... 30
Section 2062. Utilizing Evidence from Clinical Experience ............................................ 30
Section 2063. Streamlined Data Review Program ............................................................ 32
Subtitle E—Expediting Patient Access ................................................................................... 33
Section 2081. Sense of Congress ...................................................................................... 33
Section 2082. Expanded Access Policy ............................................................................ 33
Section 2083. Finalizing Draft Guidance on Expanded Access ........................................ 34
Subtitle F—Facilitating Responsible Manufacturer Communications.................................... 35
Section 2101. Facilitating Dissemination of Health Care Economic Information ............ 35
Section 2102. Facilitating Responsible Communication of Scientific and Medical
Developments ................................................................................................................ 36
Subtitle G—Antibiotic Drug Development............................................................................. 37
Section 2121. Approval of Certain Drugs for Use in a Limited Population of
Patients........................................................................................................................... 37
Section 2122. Susceptibility Test Interpretive Criteria for Microorganisms ..................... 38
Section 2123. Encouraging the Development and Use of DISARM Drugs ..................... 40
Subtitle H—Vaccine Access, Certainty, and Innovation ......................................................... 41
Section 2141. Timely Review of Vaccines by the Advisory Committee on
Immunization Practices.................................................................................................. 42
Section 2142. Review of Processes and Consistency of ACIP Recommendations........... 42
Section 2143. Meetings Between CDC and Vaccine Developers ..................................... 43
Subtitle I—Orphan Product Extensions Now; Incentives for Certain Products for
Limited Populations ............................................................................................................. 43
Section 2151. Extension of Exclusivity Periods for a Drug Approved for a New
Indication for a Rare Disease or Condition.................................................................... 43
Section 2152. Reauthorization of Rare Pediatric Disease Priority Review Voucher
Incentive Program .......................................................................................................... 43
Subtitle J—Domestic Manufacturing and Export Efficiencies ............................................... 44
Section 2161. Grants for Studying the Process of Continuous Drug
Manufacturing................................................................................................................ 44
Section 2162. Re-Exportation Among Members of the European Economic Area .......... 45
Subtitle K—Enhancing Combination Products Review ......................................................... 45
Section 2181. Enhancing Combination Products Review................................................. 45
Subtitle L—Priority Review for Breakthrough Devices ......................................................... 46
Section 2201. Priority Review for Breakthrough Devices ................................................ 47
Subtitle M—Medical Device Regulatory Process Improvements .......................................... 49
Section 2221. Third-Party Quality System Assessment .................................................... 49
Section 2222. Valid Scientific Evidence ........................................................................... 51
Section 2223. Training and Oversight in Least Burdensome Appropriate
Means Concept .............................................................................................................. 52
Section 2224. Recognition of Standards ........................................................................... 53
Section 2225. Easing Regulatory Burden with Respect to Certain Class I and
Class II Devices ............................................................................................................. 55
Section 2226. Advisory Committee Process ..................................................................... 56
Section 2227. Humanitarian Device Exemption Application ........................................... 57
Section 2228. CLIA Waiver Study Design Guidance for In Vitro Diagnostics ................ 58
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Subtitle N—Sensible Oversight for Technology Which Advances Regulatory
Efficiency ............................................................................................................................. 58
Section 2241. Health Software ......................................................................................... 59
Section 2242. Applicability and Inapplicability of Regulation ......................................... 60
Section 2243. Exclusion from Definition of Device ......................................................... 60
Subtitle O—Streamlining Clinical Trials ................................................................................ 60
Section 2261. Protection of Human Subjects in Research; Applicability of Rules........... 61
Section 2262. Use of Non-Local Institutional Review Boards for Review of
Investigational Device Exemptions and Human Device Exemptions ........................... 62
Section 2263. Alteration or Waiver of Informed Consent for Clinical
Investigations ................................................................................................................. 62
Subtitle P—Improving Scientific Expertise and Outreach at FDA ......................................... 62
Section 2281. Silvio O. Conte Senior Biomedical Research Service ............................... 62
Section 2282. Enabling FDA Scientific Engagement ....................................................... 63
Section 2283. Reagan-Udall Foundation for the Food and Drug Administration............. 63
Section 2284. Collection of Certain Voluntary Information Exempted from
Paperwork Reduction Act .............................................................................................. 64
Section 2285. Hiring Authority for Scientific, Technical, and Professional
Personnel........................................................................................................................ 65
Subtitle Q—Exempting From Sequestration Certain User Fees ............................................. 66
Section 2301. Exempting From Sequestration Certain User Fees of Food and
Drug Administration ...................................................................................................... 66
Subtitle R—Other Provisions .................................................................................................. 67
Section 2321. Sense of Congress ...................................................................................... 67
Title III—Delivery .................................................................................................................. 67
Subtitle A—Interoperability .................................................................................................... 67
Section 3001. Ensuring Interoperability of Health Information Technology .................... 67
Subtitle B—Telehealth ............................................................................................................ 71
Section 3021. Telehealth Services under the Medicare Program ...................................... 71
Subtitle C—Encouraging Continuing Medical Education for Physicians .............................. 72
Section 3041. Exempting From Manufacturer Transparency Reporting Certain
Transfers Used for Educational Purposes ...................................................................... 72
Subtitle D—Disposable Medical Technologies ...................................................................... 74
Section 3061. Treatment of Certain Items and Devices .................................................... 74
Subtitle E—Local Coverage Decision Reforms...................................................................... 75
Section 3081. Improvements in the Medicare Local Coverage Determination
(LCD) Process ............................................................................................................... 75
Subtitle F—Medicare Pharmaceutical and Technology Ombudsman ..................................... 76
Section 3101. Medicare Pharmaceutical and Technology Ombudsman ........................... 76
Subtitle G—Medicare Site-of-Service Price Transparency..................................................... 77
Section 3121. Medicare Site-of-Service Price Transparency ............................................ 77
Subtitle H—Medicare Part D Patient Safety and Drug Abuse Prevention.............................. 78
Section 3141. Programs to Prevent Prescription Drug Abuse Under Medicare
Parts C and D ................................................................................................................. 78
Title IV—Medicaid, Medicare, and Other Reforms ............................................................... 80
Subtitle A—Medicaid and Medicare Reforms ........................................................................ 80
Section 4001. Limiting Federal Medicaid Reimbursement to States for Durable
Medical Equipment (DME) to Medicare Payment Rates .............................................. 80
Section 4002. Excluding Authorized Generics from Calculation of Average
Manufacturer Price ........................................................................................................ 81
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Section 4003. Medicare Payment Incentive for the Transition from Traditional XRay Imaging to Digital Radiography and Other Medicare Imaging Payment
Provision ........................................................................................................................ 82
Section 4004. Treatment of Infusion Drugs Furnished Through Durable Medical
Equipment ...................................................................................................................... 83
Section 4005. Extension and Expansion of Prior Authorization for Power
Mobility Devices (PMDs) and Accessories and Prior Authorization Audit
Limitations ..................................................................................................................... 84
Section 4006. Civil Monetary Penalties for Violations Related to Grants,
Contracts, and Other Agreements .................................................................................. 86
Subtitle B—Other Reforms ..................................................................................................... 89
Section 4041. SPR Drawdown .......................................................................................... 89
Subtitle C—Miscellaneous...................................................................................................... 90
Section 4061. Lyme Disease and Other Tick-Borne Diseases .......................................... 90
Section 4062. Outreach to Historically Black Colleges and Universities ......................... 91
Tables
Table A-1. Guidance, Reports, and Regulations/Rulemaking That H.R. 6 Would Require .......... 92
Appendixes
Appendix A. Guidance, Reports, and Regulations/Rulemaking That H.R. 6
Would Require............................................................................................................................ 92
Appendix B. List of Abbreviations ................................................................................................ 94
Contacts
Author Contact Information .......................................................................................................... 96
Acknowledgments ......................................................................................................................... 96
Congressional Research Service
H.R. 6: The 21st Century Cures Act
Overview
On July 10, 2015, the House passed H.R. 6, the 21st Century Cures Act, on a vote of 344 to 77.
Eight amendments were offered; five were approved by voice vote, two failed by recorded vote,
and one was withdrawn. On May 21, 2015, the House Energy and Commerce Committee
unanimously ordered to be reported H.R. 6. 1 The House Committee on Rules published a
committee print of the bill on July 2, 2015. 2 On July 7, 2015, H.R. 6 was reported by the
Committee on Energy and Commerce (H.Rept. 114-190), and the House Committee on Ways and
Means was discharged from further consideration of the bill.
Amendments to H.R. 6
Amendment 1 (Brat) to reform the NIH and Cures Innovation Fund to make it a discretionary program, failed by
recorded vote Y-141 N-281.
Amendment 2 (Young) to create authority within NIH prize program to incentivize health innovation and create
breakthrough research and technology, approved by voice vote.
Amendment 3 (Lee) to strike the provision that applies policy riders in appropriations bills to NIH & FDA funding in
H.R. 6, failed by recorded vote Y-176 N-245.
Amendment 4 (Castro) to ensure that underrepresented individuals in the sciences (women and minorities) are
included as a focus topic in the report on Supporting Young Emerging Scientists, approved by voice vote.
Amendment 5 (Slaughter) to direct CDC to conduct a study to determine how the additional payments for certain
drugs are affecting usage practices and the development of drug resistance, approved by voice vote.
Amendment 6 (Fitzpatrick) to express a sense of Congress that recording Unique Device Identifiers at the point-ofcare in electronic health record systems could significantly enhance the availability of medical device data for postmarket surveillance purposes, approved by voice vote.
Amendment 7 (Polis) to direct FDA to issue a report on the risks and benefits associated with a two-tiered approval
process that would permit certain medical devices to provisionally come to market if they have demonstrated safety
but not efficacy, withdrawn.
Amendment 8 (Jackson Lee) to direct the HHS Secretary to conduct outreach to certain colleges, universities and
other institutions to ensure that health professionals from underrepresented populations are aware of the research
opportunities under this Act, approved by voice vote.
While consisting of many different provisions, the bill is primarily focused on efforts to increase
strategic investments in medical research at the National Institutes of Health (NIH) and change
some aspects of how the Food and Drug Administration (FDA) executes its regulatory oversight
mission with regard to the review and approval of new drugs, biologics, and medical devices.
H.R. 6 is the result of a series of hearings and roundtable meetings hosted by the House Energy
and Commerce Committee dating back to spring 2014.3 The hearings and roundtables focused on
a broad range of topics, including modernizing clinical trials, incorporating patient perspectives
1
U.S. House of Representatives, Committee on Energy and Commerce, Full Committee Vote on the 21st Century Cures
Act, May 19, 2015, http://energycommerce.house.gov/markup/full-committee-vote-21st-century-cures-act. The
committee website links to more than one version of the bill and several amendments; the committee marked up a
composite of a Committee Print dated May 19, 2015, named UPTON_005 (http://docs.house.gov/meetings/IF/IF00/
20150519/103516/BILLS-1146ih.pdf) and a manager’s amendment dated May 20, 2015, named UPTON_006
(http://docs.house.gov/meetings/IF/IF00/20150519/103516/BILLS-114-6-U000031-Amdt-3.pdf).
2
Rules Committee Print 114-22, Text of H.R. 6, 21st Century Cures Act, based on H.R. 6 as ordered reported by the
Committee on Energy and Commerce, July 2, 2015, http://docs.house.gov/billsthisweek/20150706/CPRT-114-HPRTRU00-HR6.pdf.
3
House Energy and Commerce Committee, 21st Century Cures Roundtable, http://energycommerce.house.gov/event/
21st-century-cures-roundtable.
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into medical research and regulatory processes, precision/personalized medicine, digital health
care, and more. At present, no companion legislation to H.R. 6 has been introduced in the Senate.
However, the Senate Health, Education, Labor, and Pensions (HELP) Committee has started work
on issues related to medical innovation4 and committee leadership has indicated they plan to
continue this work in the 114th Congress.
The July 2, 2015, Rules Committee Print differs from the version that the Committee on Energy
and Commerce ordered to be reported on May 21, 2015. Among the most notable changes is the
reduction in proposed funding for the NIH Innovation Fund, from a level of $10 billion over five
years in the version voted on by Energy and Commerce to a level of $8.75 billion. The other most
significant changes to the bill are found in the proposals to offset the costs for the legislation. A
provision in the May 21 version that would have delayed certain Medicare prepayments for
prescription drug plans has been deleted from the current version of the bill. The latest version
(July 2) includes a new provision to expand the use of prior authorization under Medicare for
power mobility devices (wheelchairs and scooters) along with an expansion of the provision in
the May 21 version for drawdowns from the Strategic Petroleum Reserve, among others.
Some of the key themes in the bill are innovation, flexibility, and transparency. H.R. 6 represents
an effort to maintain or increase medical innovation as reflected in research conducted or funded
by the NIH. The bill has numerous provisions related to increasing regulatory flexibility by FDA
in its processes for reviewing and approving drugs, biologics, and medical devices. In particular,
the bill increases the ability of industries subject to FDA regulation (e.g., pharmaceutical
companies, device makers) and the individuals who are or may become patients who could
benefit from future products, to have a greater voice in the regulatory process and to streamline
the various ways in which FDA ensures safe and effective medications and medical devices enter
the market. The bill attempts to improve the transparency of data—for researchers, consumers,
and regulated entities—by helping to provide enhanced and timelier information for
decisionmakers.
H.R. 6 would reauthorize the NIH through FY2018 and provide $8.75 billion in additional
funding for an innovation fund through FY2020. The bill would promote and encourage more
strategic planning for research conducted by NIH; change loan support for young, emerging
scientists; promote pediatric research; and encourage more collaborative research activities. The
bill focuses on changes to the FDA’s regulatory procedures for drugs and devices by requiring the
issuance of more guidance and increasing regulatory flexibility in areas such as precision (or
personalized) medicine, antibiotic drug development, orphan drugs, and medical devices. The bill
also proposes $550 million in additional funding over five years to support efforts in certain
specified areas, mostly in FDA. FDA estimates it could cost more than $900 million to implement
the legislation; “any unfunded mandates in the bill may require resources to be shifted from other
activities.”5
4
U.S. Senate Committee on Health, Education, Labor, and Pensions, Full Committee Hearing, “Continuing America’s
Leadership in Medical Innovation for Patient,” March 10, 2015, http://www.help.senate.gov/hearings/continuingamericas-leadership-in-medical-innovation-for-patients. Statement by Senator Lamar Alexander, “Senate Health
Committee Holds First Hearing on Innovation Initiative: How to Get Medical Devices, Drugs, Treatments from
Discovery to the Medicine Cabinet,” March 10, 2015, http://www.help.senate.gov/chair/newsroom/press/-senatehealth-committee-holds-first-hearing-on-innovation-initiative-how-to-get-medical-devices-drugs-treatments-fromdiscovery-to-the-medicine-cabinet.
5
Derrick Gingery, “FDA Program Cuts Loom if “Cures” Bill Isn't Fully Funded, Ostroff Warns,” The Pink Sheet
Daily, June 3, 2015. See Appendix A for a list of new requirements (e.g., regulations, guidance, reports, etc.) that
would be created by H.R. 6.
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Many interested groups (manufacturers, medical schools, disease and patient advocates,
researchers, and past and present regulators) have opined publicly on specific provisions in
various drafts of the bill, not all of which have been supportive.6 This report provides summary
descriptions of the bill’s provisions, along with background to give context, not a full analysis of
their impact. The Congressional Budget Office has published a cost estimate.7
Summary of Provisions
Section 2. NIH and Cures Innovation Fund
Background
The National Institutes of Health is the lead federal agency charged with performing and
supporting biomedical and behavioral research. It also has major roles in training biomedical
researchers and disseminating health information. Congress doubled the NIH budget from $13.65
billion to $27.1 billion in the five-year period from FY1998 to FY2003; during that period,
annual increases in the 14%-15% range were the norm. Since then, increases from regular
appropriations have been between 1.0% and 3.2% each year.8 The growth rate of the NIH budget
has been at or below the rate of inflation, which for biomedical research in FY2015 is estimated
to be 2.2%.9 NIH funding in FY2015 is 22% lower than the FY2003 level, the peak of the
doubling period in constant 2012 dollars.10
6
See, for example, The Editorial Board, “How Not to Fix the FDA,” The New York Times, July 20, 2015,
http://www.nytimes.com/2015/07/20/opinion/how-not-to-fix-the-fda.html?_r=0; Rita F. Redberg and Sanket S. Dhruva,
“The FDA’s Medical Device Problem,” The New York Times, July 17, 2015,
http://www.nytimes.com/2015/07/17/opinion/the-fdas-medical-device-problem.html; Jerry Avorn and Aaron S.
Kesselheim, “The 21st Century Cures Act—Will It Take Us Back in Time?” New England Journal of Medicine, June 3,
2015, http://www.nejm.org/doi/pdf/10.1056/NEJMp1506964; Michael Causey, “Congress Crawls Out of 20th Century
to Push Bipartisan ‘Cures’ Legislation,” Quality Digest, June 9, 2015, http://www.qualitydigest.com/inside/fdacompliance-article/060915-congress-crawls-out-20th-century-push-bipartisan-cures#; Editorial Board, “A breakthrough
for biomedicine,” May 29, 2015, Denver Post, May 29, 2015, http://www.denverpost.com/editorials/ci_28216439/
breakthrough-biomedicine; Quardricos Bernard Driskell, “What will it take to cure psoriatic disease?” National
Psoriasis Foundation blog, June 2, 2015, http://blog.psoriasis.org/blog/what-will-it-take-cure-psoriatic-disease; Newt
Gingrich, “21st Century Cures is a Major Breakthrough,” Gingrich Productions, June 3, 2015,
http://www.gingrichproductions.com/2015/06/21st-century-cures-is-a-major-breakthrough/; Gregg Gonsalves, Mark
Harrington, and David A. Kessler, “Don’t Weaken the F.D.A.’s Drug Approval Process,” New York Times, June 11,
2015, http://www.nytimes.com/2015/06/11/opinion/dont-weaken-the-fdas-drug-approval-process.html?ref=opinion;
Bronwyn Mixter, “Watchdog, Consumer Groups Say ‘Cures’ Bill Could Lower Certain Drug Approval Standards,”
BNA, June 3, 2015, http://healthlawrc.bna.com/hlrc/4225/split_display.adp?fedfid=69846101&vname=
hcenotallissues&fn=69846101&jd=69846101; Bernard Muller, “Beyond the Ice Bucket,” The Hill, June 10, 2015,
http://thehill.com/blogs/congress-blog/healthcare/244456-beyond-the-ice-bucket; and Ed Silverman, “Will the 21st
Century Cures Bill Lower Standards for Some Drug Approvals?” Pharmalot blog in Wall Street Journal, May 29, 2015,
http://blogs.wsj.com/pharmalot/search/will%20the%2021st%20century%20cure/?s=will+the+21st+century+cure.
7
Congressional Budget Office, H.R. 6, 21st Century Cures Act, Cost Estimate for Rules Committee Print 114-22, July
7, 2015, http://www.cbo.gov/publication/50361.
8
For further information, see CRS Report R43341, NIH Funding: FY1994-FY2016.
9
The Biomedical Research and Development Price Index (BRDPI) is developed each year for NIH by the Bureau of
Economic Analysis of the Department of Commerce. It reflects the increase in prices of the resources needed to
conduct biomedical research—including personnel services, supplies, equipment—and indicates how much the NIH
budget must change to maintain purchasing power. See http://officeofbudget.od.nih.gov/gbiPriceIndexes.html.
10
For further information, see CRS Report R43341, NIH Funding: FY1994-FY2016.
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A recent analysis of U.S. expenditures on biomedical research found that “U.S. government
research funding declined from 57% (2004) to 50% (2012) of the global total, as did that of U.S.
companies (50% to 41%), with the total U.S. (public plus private) share of global research
funding declining from 57% to 44%. Asia, particularly China, tripled investment from $2.6
billion (2004) to $9.7 billion (2012) preferentially for education and personnel.”11 The United
States continues to be the top supporter of both public and industry medical research.12 However,
some Members of Congress and many in the biomedical research community have expressed
concern over the rapidly increasing investments being made by other countries in this area of
research.
Many of those who are concerned over the U.S. global position in biomedical research investment
have made frequent calls for increased support for research at the NIH. However, another recent
analysis of U.S. biomedical research funding cautioned that the past pattern of rapid doubling of
the NIH budget followed by slowdowns in federal funding “created an unsustainable
hypercompetitive system that is discouraging even the most outstanding prospective students
from entering our profession—and making it difficult for seasoned investigators to produce their
best work.”13 Rather than short-term infusions of cash that disappear, the authors recommend that
greater emphasis be placed on the predictable and stable growth of federal funds for the research
enterprise.14 In responding to questions raised by Senator Elizabeth Warren during a May 5, 2015,
Senate hearing, NIH Director Francis Collins agreed that continued NIH budget increases—
ranging from 3.7% annually to inflation plus 4% or 5%—would be preferred to a temporary
larger investment that disappears.15
The Food and Drug Administration plays a central role in protecting the public health in the
United States by regulating most of the food supply and vitally important medical products,
including drugs, devices, and biologics that affect American lives on a daily basis. In performing
this role, FDA regulates some of the most successful and innovative companies in the U.S.
economy, such as those in the pharmaceutical and medical device industries. In recent years,
some have argued that FDA is underfunded and at risk of being unable to fulfill all its statutory
responsibilities assigned by Congress. Implementing new statutory provisions involves the
development of new regulations and extensive communication with industry and the public;
carrying out the new responsibilities requires additional FDA staff time as well as agency
resources.16
11
Hamilton Moses, David H. M. Matheson, Sarah Cairns-Smith, et al., “The Anatomy of Medical Research: U.S. and
International Comparisons,” Journal of the American Medical Association, vol. 313, no. 2 (January 13, 2015), pp. 174189.
12
Overall medical research funding in the United States was $117.2 billion in 2011. See Figure 8 on page 181 in
Hamilton Moses, David H. M. Matheson, Sarah Cairns-Smith, et al., “The Anatomy of Medical Research: U.S. and
International Comparisons,” Journal of the American Medical Association, vol. 313, no. 2 (January 13, 2015).
13
Bruce Alberts, Marc W. Kirschner, Shirley Tilghman, and Harold Varmus, “Rescuing U.S. biomedical research from
its systemic flaws,” Proceedings of the National Academy of Sciences, vol. 111, no. 16 (April 22, 2014), pp. 57735777.
14
Ibid., p. 5775.
15
U.S. Congress, Senate Committee on Health, Education, Labor, and Pensions, Continuing America’s Leadership:
Realizing the Promise of Precision Medicine for Patients, 114th Cong., 1st sess., May 5, 2015.
16
A recent example is implementation of the Food Safety Modernization Act (FSMA). The Congressional Budget
Office indicated that FDA would require $580 million between 2011 through 2015 to carry out FSMA; so far Congress
has appropriated less than half of this amount.
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FDA’s program level, the amount that FDA can spend, is composed of direct appropriations (also
referred to as budget authority) and user fees collected from the regulated industry.17 For FY2015,
FDA’s program level is $4.5 billion, of which 42.3% ($1.902 billion) comes from user fees. By
statute and by five-year agreements between FDA and the regulated industries that pay the fees,
FDA may use user fee revenue only for specified activities. This requirement, along with tasks
that the Committee on Appropriations reports direct FDA to conduct, influences the priorities of
the agency, potentially leaving other tasks inadequately addressed.
Provision
The provision would establish in the U.S. Treasury an NIH and Cures Innovation Fund and would
provide the Fund with $1.86 billion in mandatory funds per year for FY2016 through FY2020.18
The amounts appropriated to the Fund would be in addition to amounts otherwise made available
to the Department of Health and Human Services (HHS).
Of the amounts made available to the NIH and Cures Innovation Fund for each fiscal year, $1.75
billion would be for “NIH Biomedical Research” and $110 million would be for “Cures
Development.” Of the amounts for NIH biomedical research for a fiscal year, not less than $500
million is for the Accelerating Advancement Program. Of the remaining funds in that fiscal year,
not less than 20% is for high-risk, high-reward research, and not less than 35% is for early stage
investigators (defined as the principal investigator of the proposed research, who has been
awarded no more than one substantial, competing grant, and who is within 10 years of having
completed a medical residency or terminal degree). Of the total amount made available for the
NIH Innovation Fund in a fiscal year, not more than 10% is for intramural research.
The NIH and Cures Innovation Fund would not be subject to any transfer authority of the NIH
Director or the Secretary of HHS, such as the PHS Evaluation Set-Aside, trans-NIH research
(also called The Common Fund), the 1% transfer authority of the NIH Director, or the
Nonrecurring Expenses Fund.19
The provision states that amounts in the NIH and Cures Innovation Fund that are allocated for
“NIH biomedical research” would be used only to conduct or support certain biomedical research
activities. The provision specifies some of these activities, such as research carried out by an
early stage investigator, research carried out by a small business, the Accelerating Advancement
Program, and development and implementation of the NIH research strategic plan.
The provision states that amounts in the NIH and Cures Innovation Fund that are allocated for
“cures development” would only be used for activities of the following nine provisions:

PHSA Section 229A, as added by Section 1123 (the natural history of diseases);
17
Beginning with the Prescription Drug User Fee Act (PDUFA, P.L. 102-571) in 1992, Congress has authorized FDA
to collect fees from industry sponsors of certain FDA-regulated products and to use the revenue to support statutorily
defined activities, such as the review of product marketing applications.
18
During floor debate on H.R. 6, Amendment 1 (Brat) was defeated on a vote of Yea-141 Nay-281. Amendment 1
would have made the NIH and Cures Innovation Fund a discretionary spending program.
19
Nonrecurring Expenses Fund (NEF) is an account within the Department of the Treasury. The HHS Secretary is
authorized to transfer to the NEF unobligated balances of expired discretionary funds. NEF funds are available until
expended for use by the HHS Secretary for capital acquisitions, including facility and information technology
infrastructure. Congressional appropriators must be notified in advance of any planned use of NEF funds. NEF was
created by Section 223 of Division G of the Consolidated Appropriations Act, 2008 (42 U.S.C. 3514a).
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







Section 2001 and the amendments made by such section (development and use of
patient experience data to enhance structured risk-benefit assessment
framework);
Section 2021 and the amendments made by such section (qualification of drug
development tools);
Section 2062 and the amendments made by such section (utilizing evidence from
clinical experience);
Section 2161 (grants to study the process of continuous drug manufacturing);
Section 2201 and the amendments made by such section (priority review for
breakthrough devices);
Section 2221 and the amendments made by such section (third-party quality
system assessments);
Sections 2241, 2242, and 2243 and the amendments made by such sections
(health software); and
FFDCA Section 513(j), as added by Section 2223 (training and oversight in least
burdensome appropriate means concept).
Of the biomedical research funded under the provision, the NIH Director would ensure
coordination among the various research institutes, centers, agencies, departments, offices of the
federal government and minimize unnecessary duplication. This section requires the NIH
Director to establish the Accelerating Advancement Program under which for every $1 of NIH
Innovation Fund made available by the NIH Director to an NIH research Institute or Center, the
Institute or Center contributes $1 of other funding to accomplish important biomedical research
objectives. The scientifically based strategic plan would identify focus areas in which the
resources of the NIH Innovation Fund can be used on basic research to expand knowledge, find
more effective treatments, and address unmet needs in the United States. Focus areas include
biomarkers, precision medicine, infectious diseases, and antibiotics. The strategic plan would
include objectives for each strategic focus area and ensure that basic research remains a priority.
The strategic plan would be updated not less than every 18 months.
The House and Senate Committees on Appropriation could provide for the transfer of funds in the
NIH and Cures Innovation Fund for the authorized uses specified in the provision (NIH
biomedical research and cures development).
Funds appropriated to the NIH and Cures Innovation Fund would be used to supplement, not
supplant, the funds otherwise made available to HHS, are subject to the requirements and
limitations of the most recently enacted regular or full-year continuing appropriation Act or
resolution for NIH or FDA programs, and may be used only for the activities specified in the
provision.20
20
Amendment 1 (Brat) to H.R. 6 would have struck subsection (f) and all the terms and conditions listed here.
Amendment 1 was defeated on a vote of Yea-141 Nay-281. Amendment 3 (Lee), defeated on a vote of Yea-176 Nay245, would have struck paragraph (f)(2). Paragraph (f)(2) would require that the funds appropriated to the NIH and
Cures Innovation Fund be subject to the requirements and limitations—also called policy riders—of the most recently
enacted regular or full-year continuing appropriation Act or resolution for NIH or FDA programs.
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Title I—Discovery
Subtitle A—National Institutes of Health Funding
Section 1001. National Institutes of Health Reauthorization
Background
NIH derives its statutory authority from the Public Health Service Act of 1944 (PHSA), as
amended.21 Section 301 of the PHSA grants the Secretary of HHS broad permanent authority to
conduct and sponsor research.22 In addition, Title IV of the PHSA, “National Research Institutes,”
authorizes in greater detail various activities, functions, and responsibilities of the NIH Director
and the institutes and centers.23 The last major NIH reauthorization was the NIH Reform Act of
2006.24 The NIH Reform Act authorized total funding levels for NIH appropriations for FY2007
($30,331,309,000), FY2008 ($32,831,309,000), and such sums as necessary for FY2009. Overall
NIH authorization expired at the end of FY2009 and has not been extended by Congress. Annual
appropriations, together with Section 301 of the PHSA, provide authority for NIH programs to
continue from FY2009 to the present.
Provision
The provision would authorize appropriations for NIH in FY2016 ($31,811,000,000), FY2017
($33,331,000,000), and FY2018 ($34,851,000,000).
Section 1002. Prize Competitions
Background
Section 105 of the America COMPETES Reauthorization Act of 2010 (P.L. 111-358) provided
federal agencies with broad authority to carry out programs designed to stimulate innovation
through prize competitions.25 Before passage of P.L. 111-358, only certain federal agencies had
the authority to initiate prize competitions. The White House Office of Science and Technology
Policy (OSTP) has published annual reports on the implementation of Section 105 as required by
P.L. 111-358. Currently a number of federal government agencies, including NIH, sponsor
challenges or prize competitions in science and medical research. A current list of such challenges
can be found at a federal government website.26 A search of the website on July 15, 2015, resulted
in seven competitions conducted by the “National Institutes of Health.” Examples of research
topics covered in the various challenges: breast cancer genetics, antimicrobial resistance, and
drug abuse and addiction research.
21
42 U.S.C. §§201-300mm-61.
42 U.S.C. §241.
23
42 U.S.C. §§281-290b.
24
P.L. 109-482
25
For more information, see CRS Report R43880, The America COMPETES Acts: An Overview.
26
https://www.challenge.gov/list/.
22
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Provision
The provision would amend the PHSA by adding a new Section 409K that would require the
Director of NIH to establish an Innovation Prizes Program.27 The goal(s) of the NIH prize
program would be “identifying and funding areas of biomedical science that could realize
significant advancement through the creation of a prize competition,” and/or “improving health
outcomes, particularly with respect to human diseases and conditions for which the public and
private investment in research is disproportionately small relative to federal government
expenditures on prevention and treatment activities.”
Within six months of enactment, the Director of NIH would be required to: (1) design the prize
competitions; (2) ensure the design is realistic (given the funds to be awarded), does not reflect
any bias (concerning which innovations would be the best solution), allows any person to
participate; and (3) submit a report to Congress on the design of the competitions.
The Director of NIH would be required to establish the “I-Prize Board” composed of 9 board
members who would be appointed by the NIH Director and certain specified Members of
Congress. The I-Prize Board would provide advice on identifying areas of biomedical science per
the goals of the prize program and make recommendations on establishing the criteria for the
prize competitions as well as how to conduct the prize competition. Board members would be
appointed within 120 days of enactment, each for a 5-year term.
The provision specifies restrictions on financial conflict of interest that would be imposed on the
members of the I-Prize board and any other NIH officer or employee involved in carrying out the
prize competition. The provision also would require that the NIH Director, “with respect to an
innovation,” not award a prize “to any individual or entity that has a vested financial interest in
any product or procedure that is likely to be developed or marketed because of such innovation.”
The provision would allow for one or more contracts to be awarded by the NIH Director to
perform a simulation of the prize competitions and use the simulation to assess the effectiveness
of the competition design; a report to Congress on the simulation results would be submitted
within 4 months of awarding such a contract. The provision would allow the NIH Director to
enter into an agreement with one or more “tax exempt” entities to implement the prize
competition. However, no more than 15% of funds or other assistance “shall be for administration
of the prize competition and not less than 85% of such assistance shall be for activities in direct
support of competitors.”
The Director of NIH would be required to collect information on the medical efficacy of
innovations funded via the prize program as well as the actual and potential effect on federal
expenditures and submit reports to Congress as specified in the provision.
The provision would prohibit the federal government from acquiring the intellectual property
rights from a participant in a prize competition without his or her written consent. The provision
would allow the federal government to negotiate a license for the use of such intellectual
property.
27
Amendment 2 (Young), agreed to by voice vote during floor debate on H.R. 6, added this provision.
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Subtitle B—National Institutes of Health Planning and
Administration
Section 1021. NIH Research Strategic Plan
Background
Section 402(b)(5) of the PHSA specifies that the NIH Director “shall ensure that scientifically
based strategic planning is implemented in support of research priorities as determined by the
agencies of the National Institutes of Health.” NIH provides access to many of its strategic plans
on the agency’s website.28
The focus of NIH research, and to some extent its organizational structure, have been criticized
by some in the academic literature.29 A point often made is that the United States spends more on
health care than any of the other 30 countries that make up the Organization for Economic
Cooperation and Development (OECD)—in fact, U.S. health care spending is more than 2.5
times the OECD average—and yet, the health of the U.S. populace, as measured by life
expectancy, is ranked 24th of the 30 countries.30 “Despite its name, NIH’s mission has not
generally been current health, per se, but rather research for tomorrow’s health.... An agency
devoted to current health would do well to focus on tobacco control, exercise, nutrition,
sanitation, and more cost-effective delivery of health care—prevention and efficiency, rather than
research on diseases currently not treatable.”31 Questioning or making changes to the focus of
NIH research (whether basic, clinical, prevention, health care delivery, or patient-centered
outcomes research) is perhaps “especially pertinent in light of the nation’s continually mediocre
public health outcomes, and their stark contrast to the sophistication and productivity of the
biomedical research enterprise.”32
Provision
The provision would add a new subsection (m) to Section 402 of the PHSA, which describes in
further detail a Research Strategic Plan for NIH. Every five years, beginning in 2016, the NIH
Director, along with the directors of the national research Institutes and Centers, as well as
researchers, patient advocacy groups, and industry leaders, would be required to develop and
maintain a biomedical research strategic plan. The strategic plan would be used to identify
research opportunities and develop individual strategic plans for the research activities of each of
the NIH Institutes and Centers. The Institute and Center (IC) plans would have a common
template and identify strategic focus areas. The IC plans would consider and identify the return
on investment to the U.S. public of such biomedical research and identify contributions to
improving U.S. public health through biomedical research. Overarching and trans-NIH focus
areas—or Mission Priority Focus Areas—would be identified that best serve the goals of
preventing or eliminating the burden of a disease or condition and scientifically merit enhanced
and focused research over the next five years. Rare and pediatric diseases would remain a
28
See for example http://report.nih.gov/strategicplans/#tab2.
See for example Michael M. Crow, “Time to rethink NIH,” Nature, vol. 471 (March 31, 2011), pp. 569-571; and,
Robert Cook-Deegan, “Has NIH lost its halo?,” Issues in Science and Technology, Winter 2015, pp. 37-47.
30
Michael M. Crow, “Time to rethink NIH,” Nature, vol. 471 (March 31, 2011), p. 570.
31
Robert Cook-Deegan, “Has NIH lost its halo?,” Issues in Science and Technology, Winter 2015, p. 43.
32
Ibid.
29
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priority. In developing the strategic plan, the NIH Director would be required to ensure that
maintaining the biomedical workforce, including the participation of scientists from traditionally
underrepresented groups, would remain a priority. The initial strategic plan would be completed
not later than 270 days after enactment. The NIH Director, in consultation with the directors of
the national research Institutes and Centers, would be required to conduct annual progress
reviews for each strategic focus area in the IC plans. The plans would be reviewed and updated
every five years.
Section 1022. Increasing Accountability at the National Institutes of Health
Background
Section 405 of the PHSA specifies that the Director of the National Cancer Institute is appointed
by the President and the Directors of the other NIH Institutes are appointed by the Secretary. Each
NIH Institute Director reports directly to the NIH Director.
Section 202 of the Labor/HHS/ED Appropriations Act, 1993, states at the end of the section that
the payment of compensation to consultants or individual scientists appointed for limited periods
of time is “not to exceed the per diem rate equivalent to the maximum rate payable for seniorlevel positions,” which is “not less than 120% of the minimum rate of basic pay payable for GS–
15 of the General Schedule; and ... not greater than the rate of basic pay payable for level III of
the Executive Schedule.”33
Provision
The provision would amend Section 405 of the PHSA with regard to the appointment and terms
of the Director of the National Cancer Institute and the directors of other NIH Institutes and
Centers (ICs). It would require that directors of ICs be appointed by the NIH Director, with the
exception of the Director of the National Cancer Institute (who would continue to be appointed
by the President). It would add a new requirement that the term of office for the director of an IC
be five years and authorize the NIH Director to remove an IC Director prior to the end of a fiveyear term. It would permit the director of an IC to be reappointed at the end of a five-year term,
with no limit to the number of terms served. It would require that, if the office of a director of an
IC becomes vacant before the end of a five-year term, the director appointed to fill the vacancy
begin a new five-year term (as opposed to finishing the five-year term of the previous director).
Each current IC Director would be deemed to be appointed for a five-year term as of the date of
enactment.
The provision would remove compensation limitations for consultants and individual scientists as
stipulated by Section 202 of the Labor/HHS/ED Appropriations Act, 1993.34
The provision would add a new requirement that before a new research grant is made, the IC
Director will review and approve the award, taking into consider the mission of the IC, the
scientific priorities identified in the strategic plan, and “whether other agencies are funding
programs or projects to accomplish the same goal.”
The provision would require the Secretary to enter into an arrangement with the Institute of
Medicine35 (or other appropriate entity) to complete a study, not later than two years following
33
34
P.L. 102-394 and 5 U.S.C. 5376.
Ibid.
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enactment, “on the extent to which biomedical research supported by the federal government is
duplicative” and would require a report be submitted to Congress including recommendations on
how to prevent such duplication.
Section 1023. Reducing Administrative Burdens of Researchers
Background
The Federal Demonstration Partnership (FDP) is “a cooperative initiative among 10 federal
agencies and 119 institutional recipients of federal funds, sponsored by the National Academies,
with a purpose of reducing the administrative burdens associated with federal research grants and
contracts.”36 In 2005 and 2012, FDP conducted surveys of principal investigators of federally
funded projects to determine the impact of federal regulations and requirements on the research
process. In both surveys, researchers reported spending 57% of their time engaged in research and
42% of their time in completing pre- and post-award requirements. “The most commonly
experienced administrative responsibilities included those related to federal project finances,
personnel, and effort reporting. These were also among the most time-consuming responsibilities.
For researchers engaged in projects that required human or animal subjects, the related
Institutional Review Board (IRB) and Institutional Animal Care and Use Committee (IACUC)
requirements were by far the most time-consuming. Other areas viewed as particularly timeconsuming were those involving clinical trials, subcontracts, and cross-agency differences.”37
Provision
The provision would require the NIH Director to implement measures to reduce the
administrative burden of NIH-funded researchers, taking into account the recommendations of the
NIH Scientific Management Review Board, the National Academy of Sciences, the Faculty
Burden Survey conducted by the Federal Demonstration Partnership, and the Research Business
Models Working Group. Not later than two years following enactment, the NIH Director would
be required to submit a report to Congress on the measures that have been implemented to reduce
the administrative burden of NIH-funded researchers.
Section 1024. Exemption for the National Institutes of Health from the
Paperwork Reduction Act Requirements
Background
The Paperwork Reduction Act (PRA, 44 U.S.C. Chapter 35), enacted in 1980 and amended in
1995, established the Office of Information and Regulatory Affairs (OIRA) in the Office of
Management and Budget (OMB). Congress required that agencies seek OIRA permission before
(...continued)
35
In April 2015, the Institute of Medicine of the National Academies announced that, effective July 1, 2015, it would
change its name to the National Academy of Medicine. Institute of Medicine of the National Academies, “Institute of
Medicine to Become National Academy of Medicine,” press release, April 28, 2015, http://www.iom.edu/Global/
News%20Announcements/IOM-to-become-NAM-Press-Release.aspx.
36
Sandra L. Schneider et al., Federal Demonstration Partnership (FDP) 2012 Faculty Workload Survey: Executive
Summary, April 2014.
37
http://sites.nationalacademies.org/cs/groups/pgasite/documents/webpage/pga_087823.pdf;
http://sites.nationalacademies.org/PGA/fdp/PGA_055749.
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collecting information from the public. The first of 11 stated purposes was to “minimize the
paperwork burden for individuals ... and other persons resulting from the collection of
information by and for the Federal Government.”38 The PRA requires that federal agencies
receive clearance from OIRA before requesting most types of information from the public.39 PRA
clearance is required when standardized information is collected from 10 or more respondents
within a 12-month period.40 PRA does not apply to certain types of scientific research, including
collections that are neither sponsored nor conducted by the agency and those that are subject to a
clinical exception.41
Provision
The provision would amend 44 U.S.C. Chapter 35 to exempt NIH research from the requirements
of the PRA.
Section 1025. NIH Travel
Background
Following allegations of misspent funds during a 2010 General Services Administration meeting
held in Las Vegas, the Office of Management and Budget imposed restrictions on conference
travel for federal employees in a May 11, 2012, memorandum.42 The memorandum directed
agencies, beginning in FY2013, to spend at least 30% less than what was spent in FY2010 on
travel expenses, and stated that agencies “must maintain this reduced level of spending each year
through FY 2016.” Senior level agency approval is required for all conferences sponsored by an
agency where the conference expenses to the agency are over $100,000. Agencies are prohibited
from spending more than $500,000 on a single conference. However, this restriction may be
waived if the agency head “determines that exceptional circumstances exist whereby spending in
excess of $500,000 on a single conference is the most cost-effective option to achieve a
compelling purpose.”43
Provision
The provision would express the sense of Congress that “participation in or sponsorship of
scientific conferences and meetings is essential to the mission of the National Institutes of
Health.”
38
44 U.S.C. §3501.
For further information about the PRA, see CRS Report RL30590, Paperwork Reduction Act Reauthorization and
Government Information Management Issues, and CRS Report RL32397, Federal Rulemaking: The Role of the Office
of Information and Regulatory Affairs.
40
See NIH, Office of Science Policy, Genetics, Health and Society, What is the Paperwork Reduction Act?, at
http://osp.od.nih.gov/faq/what-paperwork-reduction-act; and HHS, Frequently Asked Questions About PRA /
Information Collection, at http://www.hhs.gov/ocio/policy/collection/infocollectfaq.html.
41
Cass R. Sunstein, Facilitating Scientific Research by Streamlining the Paperwork Reduction Act Process, Executive
Office of the President, Office of Management and Budget, December 9, 2010, https://www.whitehouse.gov/sites/
default/files/omb/memoranda/2011/m11-07.pdf.
42
Promoting Efficient Spending to Support Agency Operations, http://www.whitehouse.gov/sites/default/files/omb/
memoranda/2012/m-12-12.pdf.
43
Ibid.
39
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Section 1026. Other Transactions Authority
Background
Section 480 of the PHSA establishes the Cures Acceleration Network (CAN). The purpose of the
CAN is to support revolutionary advances in basic research and facilitate FDA review of CANfunded high-need cures. A high-need cure is a drug, biological product, or device that, as
determined by the Director of the NIH National Center for Advancing Translational Sciences
(NCATS), “is a priority to diagnose, mitigate, prevent, or treat harm from any disease or
condition [and] for which the incentives of the commercial market are unlikely to result in its
adequate or timely development.”44
Under current law, if the Director of NCATS determines that the goals and objectives of this
section cannot be adequately carried out through a contract, grant, or cooperative agreement, then
the Director has “flexible research authority to use other transactions to fund projects in
accordance with the terms and conditions of this section. Awards made under such flexible
research authority for a fiscal year shall not exceed 20 percent of the total funds appropriated” for
a fiscal year.45 Other transaction (OT) authority is a special vehicle used by certain federal
agencies for obtaining or advancing research and development (R&D).46 Generally, OT authority
is created because the government needs to obtain leading-edge R&D from commercial sources,
but some companies (and other entities) are unwilling or unable to comply with the government’s
procurement regulations.
Current law stipulates that any “grant, cooperative agreement, or contract awarded under this
section shall be awarded on a competitive basis.”47
Provision
The provision would replace the current subparagraph on other transactions authority with a new
subparagraph that would provide other transactions authority with fewer restrictions. The OT
authority would not be conditional on a determination that the goals and objectives of this section
cannot be adequately carried out through a contract, grant, or cooperative agreement. The
provision would not limit OTs to 20% of the total funds appropriated.
The provision would also delete the requirement that grants, contracts, and cooperative
agreements be awarded on a competitive basis.
Section 1027. NCATS Phase IIB Restriction
Background
Prior to FDA approval, medical products are tested in a clinical trial using human volunteers to
see how the products compare to standard treatments or to no treatment. FDA uses the data from
clinical trials to determine whether to approve a manufacturer’s application for marketing a
44
PHS Act §480(a)(3).
PHS Act §480(e)(3)(C).
46
An OT is not a contract, grant, or cooperative agreement, and there is no statutory or regulatory definition of “other
transaction.” Only those agencies that have been provided OT authority may engage in other transactions. For further
information, see CRS Report RL34760, Other Transaction (OT) Authority.
47
PHS Act §480(f).
45
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medical product. Clinical trials are conducted in phases, which are described by FDA in the
paragraphs below. Sometimes Phase II clinical trials are divided into Phase IIA (to assess dosing
requirements) and Phase IIB (to study efficacy).
Phase I trials try to determine dosing, document how a drug is metabolized and excreted,
and identify acute side effects. Usually, a small number of healthy volunteers (between
20 and 80) are used in Phase I trials.
Phase II trials include more participants (about 100-300) who have the disease or
condition that the product potentially could treat. In Phase II trials, researchers seek to
gather further safety data and preliminary evidence of the drug’s beneficial effects
(efficacy), and they develop and refine research methods for future trials with this drug. If
the Phase II trials indicate that the drug may be effective—and the risks are considered
acceptable, given the observed efficacy and the severity of the disease—the drug moves
to Phase III.
In Phase III trials, the drug is studied in a larger number of participants with the disease
(approximately 1,000-3,000). This phase further tests the product’s effectiveness,
monitors side effects and, in some cases, compares the product’s effects to a standard
treatment, if one is already available. As more and more participants are tested over
longer periods of time, the less common side effects are more likely to be revealed. 48
Under current law, although NCATS may develop and provide infrastructure and resources for all
phases of clinical trials research, it may support clinical trial activities only through the end of
Phase IIA, with one exception. NCATS may support clinical trial activities through the end of
Phase IIB for a treatment for a rare disease or condition if (1) it gives public notice for a period of
at least 120 days of NCATS intention to support the clinical trial activities in Phase IIB; (2) no
public or private organization provides credible written intent to NCATS that the organization has
timely plans to further the clinical trial activities or conduct clinical trials of a similar nature
beyond Phase IIA; and (3) NCATS ensures that support of the clinical trial activities in Phase IIB
will not increase the federal government’s liability beyond the award value of the center’s
support.
Provision
The provision would extend NCATS’s authority to support clinical trial activities through the end
of Phase IIB (instead of Phase IIA), and extend the exception for treatment of a rare disease or
condition through the end of Phase III (instead of Phase IIB).
Section 1028. High-Risk, High-Reward Research
Background
The NIH Common Fund, within the Office of the NIH Director, supports research in emerging
areas of scientific opportunity, public health challenges, and knowledge gaps. These are often
large, complex research efforts that involve the collaboration of two or more research institutes or
centers. The Common Fund also supports the High-Risk, High-Reward Research Program, which
has “four unique funding opportunities for exceptionally creative scientists who propose highly
innovative approaches to major challenges in biomedical research.”49 These awards are intended
48
FDA, Inside Clinical Trials: Testing Medical Products in People, What Happens in a Clinical Trial?, at
http://www.fda.gov/Drugs/ResourcesForYou/Consumers/ucm143531.htm.
49
NIH, Office of Strategic Coordination, The Common Fund, High-Risk Research, at https://commonfund.nih.gov/
(continued...)
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“to encourage creative, outside-the-box thinkers to pursue exciting and innovative ideas about
biomedical research.” The four funding opportunities are (1) the NIH Director’s Pioneer Award,
(2) the New Innovator Award, (3) the Transformative Research Award, and (4) the NIH Director’s
Early Independence Award. This last award was created in FY2011 “to support exceptional early
career scientists who possess the intellect, scientific creativity, drive, and maturity to flourish
independently immediately following their graduate training, eliminating the need for traditional
post-doctoral training.”50 NIH announced 78 High-Risk, High-Reward awards in FY2013.51 A
total of 85 such awards were made in FY2014.52
Provision
The provision would add a new Section 409K to the PHSA that would require the Director of
each NIH institute to “establish programs to conduct or support research projects that pursue
innovative approaches to major contemporary challenges in biomedical research that involve
inherent high risk, but have the potential to lead to breakthroughs.” The NIH Director would
determine a specific percentage of funding for each institute for such projects.
Section 1029. Sense of Congress on Increased Inclusion of Underrepresented
Communities in Clinical Trials
Background
Minorities have been underrepresented in clinical trials. For example, according to a 2011 report
from an FDA-sponsored conference, “African Americans represent 12% of the U.S. population
but only 5% of clinical trial participants and Hispanics make up 16% of the population but only
1% of clinical trial participants.”53 There can be biological differences in how people process or
respond to medical products. For example, genetic differences can make a treatment less effective
or perhaps even more toxic in one particular ethnic group. Therefore, it is important to study in
clinical trials the safety and effectiveness of medical products in all people who will use the
products following FDA approval.
Provision
The provision would express the sense of Congress that the NIH National Institute on Minority
Health and Health Disparities “should include within its strategic plan ways to increase
representation of underrepresented communities in clinical trials.”
(...continued)
highrisk/index.
50
NIH, Office of Strategic Coordination, The Common Fund, High-Risk Research, at http://commonfund.nih.gov/
highrisk/overview.
51
NIH, News Releases, at http://www.nih.gov/news/health/sep2013/od-30.htm.
52
NIH, News Releases, at http://www.nih.gov/news/health/oct2014/od-06.htm.
53
FDA, For Consumers, Clinical Trials Shed Light on Minority Health, at http://www.fda.gov/ForConsumers/
ConsumerUpdates/ucm349063.htm.
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Subtitle C—Supporting Young Emerging Scientists
Section 1041. Improvement of Loan Repayment Programs of National
Institutes of Health
Background
NIH funds seven loan repayment programs for researchers.54 Three of these are intramural
programs that provide loan repayment to researchers in exchange for undertaking research while
employed by NIH. Intramural loan repayment programs support researchers from disadvantaged
backgrounds, those who are investigating AIDS, and those undertaking general research
(including general research by physicians during their fellowship training). NIH also funds four
programs to repay the loans of extramural researchers. These funds are awarded competitively to
researchers who are employed by a qualifying educational institution. Specific programs are
available to extramural researchers investigating health disparities, undertaking contraception and
infertility research, engaging in clinical research, and examining pediatric-related topics.
Researchers may receive up to $35,000 per year in loan repayment under each of these programs,
and the NIH loan repayment follows (where not inconsistent with the specific program) the
regulations that govern the National Health Service Corps Loan Repayment Program55 with
regard to participant eligibility, application procedures, selection criteria, loan repayment contract
terms, tax liability for payments received, service obligation, and penalties for breach of contract.
Provision
The provision would authorize a new NIH loan repayment program by adding a new PHSA
Section 487H “Loan Repayment Program.” The new section would require the Secretary to
establish a new extramural loan repayment program for the NIH, based on the agency’s scientific
and workforce needs, under which the federal government would pay not more than $50,000 per
year on the principal and educational loans of health professionals who engage in research.
Beginning in FY2017, the provision would allow amounts repaid under this new program to be
adjusted annually for inflation. Individuals eligible for loan repayment must have a substantial
amount of educational loans relative to income and must complete at least two years of research
service. The provision would also require that the new program, except where inconsistent with
the program’s purpose, be subject to the regulations that govern the National Health Service
Corps Loan Repayment Program56 with regard to participant eligibility, application procedures,
selection criteria, loan repayment contract terms, tax liability for payments received, service
obligation, and penalties for breach of contract. The provision would also allow amounts
appropriated for new loan repayment contracts to remain available until the end of the second
fiscal year after they are appropriated.
54
For description of these programs, see Appendix A of CRS Report R43571, Federal Student Loan Forgiveness and
Loan Repayment Programs.
55
For program description, see CRS Report R43920, National Health Service Corps: Changes in Funding and Impact
on Recruitment. For program regulations, see U.S. Department of Health and Human Services, Health Resources and
Services Administration, “National Health Service Corps: Loan repayment Program,” http://nhsc.hrsa.gov/downloads/
lrpapplicationguidance.pdf.
56
Ibid.
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Finally, the provision would amend the existing NIH loan repayment programs by increasing
annual loan repayment limits from $35,000 to $50,000 and by permitting an annual adjustment of
loan repayment amounts for inflation, beginning in FY2017.
Section 1042. Report
Provision
The provision would require the NIH Director to submit to Congress a report, not later than 18
months following enactment, on NIH efforts “to attract, retain and develop emerging scientists,
including underrepresented individuals in the sciences, such as women and other minorities.”57
Subtitle D—Capstone Grant Program
Section 1061. Capstone Award
Background
In February 2015, the NIH Deputy Director for Extramural Research, Sally Rockey, posted a
description of a new NIH emeritus award that would “help senior investigators who wish to
transition out of a position that relies on funding from NIH research grants, and facilitate the
transfer of their work, knowledge and resources to junior colleagues.”58 At the same time, NIH
also published a formal Request for Comment on the emeritus award.59 According to Science,
“most of the more than 120 comments” responding to the Request for Comment were critical of
the emeritus award.60 Jeremy Berg, former director of the NIH National Institute of General
Medical Sciences stated that he is “skeptical that it would have the desired impact,” that it may
become “an entitlement for senior investigators,” and that “[t]here is absolutely no need to create
a new mechanism.”61
Provision
The provision would add a new Section 490 to the PHSA creating a capstone award to support
outstanding scientists who have received NIH funding. The purpose of the award would be to
“facilitate the successful transition or conclusion of research programs.” The duration and amount
of each award would be determined by the NIH Director in consultation with the IC Directors.
Individuals who have received a capstone award would not be eligible to be the principal
investigator on subsequent NIH awards.
57
Amendment 4 (Castro), agreed to by voice vote during floor debate on H.R. 6, added the language ensuring that
underrepresented individuals in the sciences (women and minorities) would be included as a focus topic in the NIH
report to Congress.
58
Sally Rockey, Rock Talk, “Seeking Your Input on Sustaining the Workforce Through an Emeritus Award,” February
3, 2015, at http://nexus.od.nih.gov/all/2015/02/03/emeritus-rfi/.
59
http://grants.nih.gov/grants/guide/notice-files/NOT-OD-15-064.html.
60
Jocelyn Kaiser, NIH proposal to create grant for aging scientists hits a nerve, ScienceInsider, February 6, 2015, at
http://news.sciencemag.org/funding/2015/02/nih-proposal-create-grant-aging-scientists-hits-nerve.
61
Ibid.
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Subtitle E—Promoting Pediatric Research Through the National
Institutes of Health
Background
Under current law, Section 409D(d) of the PHSA provided for the establishment within NIH of a
Pediatric Research Network “in order to more effectively support pediatric research and optimize
the use of Federal resources.”62
Section 1081. National Pediatric Research Network
Provision
The provision would require the establishment of the National Pediatric Research Network
(NPRN). In establishing the NPRN, the provision would (1) eliminate language telling the NIH
Director to consult with the Director of the Eunice Kennedy Shriver National Institute of Child
Health and Human Development but (2) retain language telling the NIH Director to collaborate
with the ICs that carry out pediatric research. The provision would allow that the NPRN “may be
comprised of, as appropriate, the pediatric research consortia” that are receiving grants under this
section of the PHSA, and deletes that the NPRN may be comprised of other consortia, centers or
networks focused on pediatric research. The provision would now require the NIH Director to
award funding to support the pediatric research consortia; the duration of such support “shall be
for a period not to exceed 5 years.” Each consortium receiving an award under this section of the
PHSA would be required to “provide assistance to [CDC] for activities related to patient registries
and other surveillance systems.”
Section 1082. Global Pediatric Clinical Study Network Sense of Congress
Provision
The provision would express the sense of Congress that NIH “should encourage a global pediatric
clinical study network through the allocation of grants, contracts, or cooperative agreements to
supplement the salaries of new and early investigators who participate in the global pediatric
clinical study network.”
The provision would express the sense of Congress that NIH “grants, contracts, or cooperative
agreements should be awarded, solely for the purpose of supplementing the salaries of new and
early investigators, to entities that participate in the global pediatric clinical study network.”
The provision would express the sense of Congress that FDA “should engage the European
Medicines Agency and other foreign regulatory entities during the formation of the global
pediatric clinical study network to encourage their participation.”
The provision would express the sense of Congress that “once a global pediatric clinical study
network is established and becomes operational, [FDA] should continue to engage the European
62
Section 409D(d) was added to the PHS Act by P.L. 113-55, the Prematurity Research Expansion and Education for
Mothers who deliver Infants Early Reauthorization Act, or the PREEMIE Reauthorization Act, which was signed into
law on November 27, 2013.
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Medicines Agency and other foreign regulatory entities to encourage and facilitate their
participation in the network with the goal of enhancing the global reach of the network.”
Section 1083. Appropriate Age Groupings in Clinical Research
Provision
The provision would require the NIH Director, within 180 days of enactment, to convene a
workshop of experts on pediatrics and geriatrics and then publish guidelines regarding
“appropriate age groupings to be included in research studies.” The Director would also be
required to make available to the public, within 180 days after the end of the workshop, the
findings and conclusions of the workshop. At least every other year, the Director would be
required to disclose to the public the number of children included in NIH-supported research,
“disaggregated by developmentally appropriate age group, race, and gender.”
Subtitle F—Advancement of National Institutes of Health Research
and Data Access
Section 1101. Standardization of Data in Clinical Trial Registry Data Bank on
Eligibility for Clinical Trials
Background
Sponsors of clinical trials for drugs, biologics, and devices regulated by the FDA are required to
submit registration and summary results information to ClinicalTrials.gov, the clinical trial
registry and results data bank operated by NIH’s National Library of Medicine (NLM) pursuant to
Sections 402(i)-(j) of the PHS Act. Subparagraph 402(j)(2)(B) requires the NIH Director to
ensure that the public may, in addition to key-word searching, search the entries in the data bank
by various specified criteria, including the disease or condition being studied, the name of the
drug or device under investigation, and the location of the clinical trial. The NIH Director is
instructed to add search categories as deemed necessary and to ensure that the data bank is easy to
use, and that its entries are easily compared.
Provision
The provision would add new language to Section 402(j) of the PHS Act (“Expanded Clinical
Trial Registry Data Bank”) requiring the NIH Director to ensure that (1) the registry and results
data bank is easily used by the public; (2) the registry and results data bank entries are easily
compared; (3) information is submitted to the registry and results data bank in a standardized
format, including certain specified data; and (4) standard terminologies and code sets are used, to
the extent possible, to facilitate electronic data matching. The provision would strike
subparagraph 402(j)(2)(B).
Within 90 days of enactment, the Secretary would be required to seek the advice of relevant
stakeholders and experts on enhancements to the clinical trial registry data bank that are
necessary to implement the provision. The Secretary would have to begin implementation of the
provision within 18 months of enactment.
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Subtitle G—Facilitating Collaborative Research
Section 1121. Clinical Trial Data System
Background
Sponsors of clinical trials for drugs, biologics, and devices regulated by the FDA are required to
submit registration and summary results information to ClinicalTrials.gov, the clinical trial
registry and results data bank operated by NIH’s National Library of Medicine (NLM). Under
Section 402(j) of the PHS Act, those responsible for specified clinical trials of FDA-regulated
products have been required to submit registration information to ClinicalTrials.gov since
December 2007, submit summary results information for clinical trials of approved products
since September 2008, and submit adverse events information since September 2009. The
Secretary is required, by rulemaking, to expand the requirements for submission of summary
results information, and authorized to use rulemaking to make other changes in the requirements
for submission of registration and results information. In November 2014, HHS published a
proposed rule to clarify and expand requirements for the submission of clinical trial registration
and results information to ClinicalTrials.gov.63
Provision
The provision would instruct the Secretary to enter into a seven-year cooperative agreement,
contract, or grant—the Clinical Trial Data System Agreement—with one or more eligible entities
(i.e., tax-exempt academic institutions) to implement a pilot program to enable registered users to
conduct further research on reported clinical trial data. Eligible entities seeking funding would
have to submit an application that contains certain specified information including, among other
things, (1) information demonstrating that the eligible entity can compile clinical trial data in
standardized formats; (2) a description of the system the eligible entity will use to store and
maintain such data; (3) a certification that the eligible entity will allow only registered users to
access and use de-identified clinical trial data; (4) evidence demonstrating the ability of the
eligible entity to ensure that registered users disseminate the results of their research; and (5)
evidence demonstrating that the eligible entity has a proven track record of protecting
confidential data.
Within six years of establishing the pilot program, the Comptroller General would have to study
and report to the Secretary and Congress on the impact and effectiveness of the program,
including recommendations for improving it. Among other things, the report would have to
include information on new discoveries, research inquiries, or clinical trials that resulted from
having access to clinical trial data under the pilot program, as well as an analysis of whether the
program had helped reduce adverse events in clinical trials. The Secretary would be able to
extend (including permanently), expand, or terminate the pilot program, in whole or in part, after
the seven-year period expires.
63
Department of Health and Human Services, National Institutes of Health, “Clinical Trials Registration and Results
Submission,” 79 Federal Register 69566, November 21, 2014.
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Section 1122. National Neurological Diseases Surveillance System
Background
The PHSA does not explicitly authorize or require surveillance of neurological diseases in
general, although the Secretary may conduct such activities under general authorities in PHSA
Title III. Surveillance is explicitly authorized for certain specified neurological disorders (e.g.,
amyotrophic lateral sclerosis64 and autism spectrum disorder).65
Provision
The provision would add a new PHSA Section 399V-6, “Surveillance of Neurological Diseases.”
It would require the Secretary, acting through the Director of the Centers for Disease Control and
Prevention (CDC)—in consultation with specified stakeholders, and coordinated with other
agencies—to establish a National Neurological Diseases Surveillance System, to include
surveillance of multiple sclerosis and Parkinson’s disease. Required system elements would
include demographic information and risk factors associated or possibly associated with
neurological diseases, and information about diagnosis and progression markers.66 Optional
system elements would include information about the epidemiology, natural history, prevention,
detection, management, and treatment approaches for the diseases; the development of outcomes
measures; and any additional matters identified by stakeholders.
The provision also would authorize the Secretary to furnish grants, contracts, or cooperative
agreements with public or private nonprofit entities to implement this provision. The Secretary
would be required to make information and analysis obtained from the system available to other
federal health agencies (as listed) and state and local agencies, and, subject to HIPAA privacy and
security protections, to the public, including researchers. The Secretary would be required to
report to Congress regarding the system within four years of enactment. The provision would
authorize the appropriation of $5 million for each of fiscal years FY2016 through FY2020.
Section 1123. Data on Natural History of Diseases
Background
The natural history of a disease is its course over time from inception to its eventual end in full
recovery or death. Natural history encompasses exposure or another inciting event, onset and
types of symptoms, and any resulting disability, among other things.
Provision
The provision would express the sense of Congress, in subsection (a), that “studies on the natural
history of diseases can help facilitate and expedite the development of medical products for such
diseases.” Subsection (b) would establish a new PHSA Section 229A. It would authorize the
Secretary to engage in public-private partnerships and award grants in order to gather, analyze,
64
PHSA Section 399S; 42 U.S.C. §280g-7.
PHSA Section 399AA; 42 U.S.C. §280i.
66
A disease marker is a substance or other measurable parameter that can be used to identify the presence or severity
of a health condition. A progression marker is one that could indicate worsening or improvement in the condition over
time.
65
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and interpret data on the natural history of diseases, with a focus on rare diseases. It also would
authorize the Secretary, through these public-private partnerships, to support disease registries
and a secure, flexible information management system, and to provide advice to researchers,
advocacy groups, and others on matters regarding disease studies.
The new PHSA Section 229A also would require the Secretary to make data obtained or
maintained pursuant to this section available to the public (including patient advocacy groups,
researchers, and drug developers), consistent with federal and state privacy laws, in order to
facilitate medical product development. The Secretary would be required to follow applicable
laws protecting privileged or confidential trade secret, commercial, or financial information.
Finally, the provision would authorize the appropriation of $5 million for each of fiscal years
FY2016 through FY2020 to implement this section.
Section 1124. Accessing, Sharing, and Using Health Data for Research
Purposes
Background
The Health Information Portability and Accountability Act (HIPAA) privacy rule describes the
circumstances under which HIPAA-covered entities such as health plans and health care
providers are permitted to use or disclose individually identifiable health information (i.e.,
protected health information, or PHI) without an individual’s written authorization.67 In general,
covered entities may use or disclose PHI for the purposes of treatment, payment, and other
routine health care operations with few restrictions.68 Covered entities also may disclose PHI for
certain public health purposes, including disclosing information about an FDA-regulated product
or activity to an individual subject to FDA’s jurisdiction.69 However, the privacy rule’s definition
of health care operations excludes using or disclosing PHI for the primary purpose of conducting
research (i.e., systematic investigation designed to develop or contribute to generalizable
knowledge).70
The disclosure of PHI to researchers generally requires an individual’s authorization unless an
Institutional Review Board (or equivalent Privacy Board) waives the authorization.71 A covered
entity may, however, allow researchers access to PHI to prepare a research protocol, provided the
PHI is not removed from the covered entity. The privacy rule traditionally has required
authorizations to be study-specific; authorizations for future research were prohibited. In a
January 2013 final rule, HHS permitted authorizations for future research if a sufficiently clear
description of the future research is provided.72 While covered entities may not sell PHI to
researchers, they are permitted to charge researchers a cost-based fee to cover the preparation and
transmission of the information.73
67
The HIPAA privacy rule is codified at 45 C.F.R. Part 164, Subpart E.
45 C.F.R. §164.506.
69
45 C.F.R. §164.512(b)(1)(iii).
70
45 C.F.R. §164.501.
71
45 C.F.R. §164.512(i)(1)(i).
72
Department of Health and Human Services, Office of the Secretary, “Modifications to the HIPAA Privacy, Security,
Enforcement, and Breach Notification Rules Under the Health Information Technology for Economic and Clinical
Health Act and the Genetic Information Nondiscrimination Act; Other Modifications to the HIPAA Rules; Final Rule,”
78 Federal Register 5566, 5611, January 25, 2013.
73
45 C.F.R. §164.502(a)(5)(ii)(B)(2).
68
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Provision
This provision would add a new Part 4 to Subtitle D of the HITECH Act instructing the Secretary
to make several revisions or clarifications to the HIPAA privacy rule within 12 months of
enactment. These changes are intended to ease some of the rule’s restrictions on accessing,
sharing, and using health information for research purposes.
First, the Secretary would be required to revise or clarify the privacy rule to allow the use or
disclosure of PHI by a covered entity for research purposes to be treated as health care operations.
However, such disclosures would be treated as health care operations only if they were made to
another covered entity (or to a business associate under contract with the disclosing covered
entity) to perform health care operations, or to a business associate under contract to perform data
aggregation.
Second, the Secretary would be required to revise or clarify the privacy rule to permit the sale of
PHI for research purposes by removing the provision that limits the remuneration to an amount
that covers the cost of preparing and transmitting the information. The Secretary would be
required to further amend the rule so that research on the quality, safety, or effectiveness of FDAregulated products is treated as a public health activity for the purpose of disclosing PHI to an
individual subject to FDA’s jurisdiction.
Third, the Secretary would be required to revise or clarify the privacy rule’s provision that
prohibits researchers from removing PHI during preparation of a research protocol to permit
remote access to PHI by researchers, provided appropriate security and privacy safeguards are in
place and the PHI is not copied or retained by the researchers.
Finally, the Secretary would be required to revise or clarify the privacy rule to allow an
authorization for the use or disclosure of PHI for future research purposes, provided the
authorization (1) sufficiently describes the purposes such that it would be reasonable for an
individual to expect that the PHI could be used or disclosed for future research; (2) states that the
authorization will expire on a particular date or on the occurrence of a particular event; and (3)
states that the authorization will remain valid unless revoked, and provides revocation
instructions.
Subtitle H—Council for 21st Century Cures
Section 1141. Council for 21st Century Cures
Provision
The provision would add to Title II of the PHSA a new Part E, “Council for 21st Century Cures.”
The council would be a non-profit public-private partnership. The purpose of the council would
be to “accelerate the discovery, development, and delivery in the United States of innovative
cures, treatments, and preventive measures for patients.” To accomplish its purpose, the council
would foster collaboration and coordination of those “engaged in the cycle of discovery,
development and delivery of life-saving and health-enhancing innovative interventions.” Other
duties of the council would include communication and dissemination activities; establishing a
strategic agenda to accelerate the discovery, development, and delivery of cures, treatments, and
preventive interventions; developing recommendations based on the identification of gaps and
opportunities within the discovery, development, and delivery cycle; and identifying opportunities
to work with other entities within the United States as well as internationally, such as the
Innovative Medicines Initiative of the European Union.
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The council would have a Board of Directors composed of eight ex officio members and 17
appointed members. The ex officio members would consist of the NIH Director, the FDA
Commissioner, the CMS Administrator, and “the heads of five other federal agencies deemed by
the Secretary to be engaged in biomedical research and development.” Within six months of
enactment, the Comptroller General would select the appointed board members. From a list of
nominations made by the leading trade associations, the Comptroller General would select four
representatives of the biopharmaceutical industry, two from the medical device industry, and two
from the information and digital technology industry. In addition, the Comptroller General would
select two academic researchers, three patient representatives, two representatives of health care
providers, and two representatives of health care plans and insurers. The term of appointed
members would be five years. Within 90 days of incorporation of the council and board
appointment, the members of the board would select a Chair, establish the by-laws and policies
for the council, and issue an agenda outlining how it will achieve its purpose. This agenda would
be reviewed and updated annually. The board would be required to meet quarterly, and its minutes
would be publically available and submitted to Congress. The day-to-day management of the
council would be the responsibility of the Executive Director, whose specific duties would be
established by the Board of Directors.
The council would be required to terminate on September 30, 2023. For each fiscal year, FY2016
through FY2023, the provision would authorize appropriations of $10 million to the council. The
council would also be able to “accept financial or in-kind support from participating entities or
private foundations or organizations when such support is deemed appropriate.”
Title II—Development
Subtitle A—Patient-Focused Drug Development
Section 2001. Development and Use of Patient Experience Data to Enhance
Structured Risk-Benefit Assessment Framework
Background
FFDCA Section 505(d), in its instructions on new drug applications, requires the Secretary to
implement a structured risk-benefit assessment framework in the new drug approval
process to facilitate the balanced consideration of benefits and risks, a consistent and
systematic approach to the discussion and regulatory decision making, and the
communication of the benefits and risks of new drugs. Nothing in the preceding sentence
shall alter the criteria for evaluating an application for premarket approval of a drug.
Provision
The provision would amend FFDCA Section 505 by deleting a clause from Section 505(d) and
adding new subsections (x) and (y). The new 505(x) would restate the deleted 505(d) requirement
for the Secretary to “implement a structured risk-benefit assessment framework in the new drug
approval process.” The new 505(y) would require the Secretary to “establish and implement
processes under which” entities “seeking to develop patient experience data” could submit ideas
and data to the Secretary and the Secretary could request materials from those entities, which
could include the manufacturer and nonmanufacturer groups. This provision would define
“patient experience data” as
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data collected by patients, parents, caregivers, patient advocacy organizations, disease
research foundations, medical researchers, research sponsors, or other parties determined
appropriate by the Secretary that is intended to facilitate or enhance the Secretary’s riskbenefit assessments, including information about the impact of a disease or a therapy on
patients’ lives.
The new subsection would also require the Secretary to issue implementation guidance after
holding several methodological workshops and a public meeting.
Subtitle B—Qualification and Use of Drug Development Tools
Section 2021. Qualification of Drug Development Tools
Background
The pharmaceutical industry claims the cost of drug discovery and development is high,
estimated at $1.3 billion to $1.6 billion to bring a drug to market for use in humans.74 Others have
criticized these estimates, claiming they are “false and built on seriously flawed methods” and
that the “true cost is likely to be below $100 million.”75 Lengthy clinical trials have been blamed
as one factor contributing to the high cost of drug development.
Surrogate endpoints—based on the measurement of biomarkers—may be used to determine the
clinical benefit of a product instead of using clinical endpoints. This is because surrogates “enable
smaller, faster, and thus cheaper clinical trials. In addition, pharmaceutical companies argue that
using surrogates means that fewer patients are exposed during testing, and beneficial new
medications reach the market faster. Their main disadvantage is that favorable effects on
surrogates do not automatically translate into benefits to health.”76 For example, Avastin “delayed
tumor progression in advanced breast cancer but was not shown to benefit patients.”77 Likewise
Avandia lowered a biomarker level in patients with diabetes but also increased their risk of heart
attack. A number of drugs have been approved on the basis of surrogate endpoint data and, after
adoption into medical practice, have been shown to be harmful through clinical trials or other
subsequent analysis.78 The FDA uses surrogate endpoints in about half of new drug approvals.79
74
Stephen Whitehead, “Making medicines evergreen,” (rapid response), BMJ, December 17, 2012.
Peter C. Gotzsche, “Making medicines evergreen,” (rapid response), BMJ, December 17, 2012. See also: Arnold S.
Relman and Marcia Angell, “America’s other drug problem: how the drug industry distorts medicine and politics,” The
New Republic, December 16, 2002, pp. 27-41; Marcia Angell, “How much does the pharmaceutical industry really
spend on R&D?,” in The truth about the drug companies: How they deceive us and what to do about it (New York:
Random House, 2004), pp. 37-41; Merrill Goozner, The $800 million pill: The truth behind the cost of new drugs
(Berkeley: University of California Press, 2005); and, Donald W. Light, “Misleading Congress about Drug
Development,” Journal of Health Politics, Policy and Law, vol. 32, no. 5 (October 2007), pp. 895-913. One recent
estimate states that the “median costs were a third less than the average, or $60 million. Deconstructing other inflators
would lower the estimate of costs even further.” Donald W. Light and Joel R. Lexchin, “Pharmaceutical research and
development: what do we get for all that money?,” BMJ, August 7, 2012.
76
Staffan Svensson, David B. Menkes, and Joel Lexchin, “Surrogate Outcomes in Clinical Trials—A Cautionary Tale,”
JAMA Internal Medicine, vol. 173, no. 8 (April 22, 2013), pp. 611-612.
77
Jerry Avorn and Aaron S. Kesselheim, “The 21st Century Cures Act—Will It Take Us Back in Time?,” The New
England Journal of Medicine, June 3, 2015, http://www.nejm.org/doi/full/10.1056/NEJMp1506964.
78
Staffan Svensson, David B. Menkes, and Joel Lexchin, “Surrogate Outcomes in Clinical Trials—A Cautionary Tale,”
JAMA Internal Medicine, vol. 173, no. 8 (April 22, 2013), Supplementary Online eTable.
79
Jerry Avorn and Aaron S. Kesselheim, “The 21st Century Cures Act—Will It Take Us Back in Time?,” The New
England Journal of Medicine, June 3, 2015, http://www.nejm.org/doi/full/10.1056/NEJMp1506964.
75
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The Institute of Medicine defines a clinical endpoint as “a characteristic or variable that reflects
how a patient [or consumer] feels, functions, or survives. Death is one example of a clinical
endpoint.”80 IOM defines “surrogate endpoint” in the following way:
a biomarker that is intended to substitute for a clinical endpoint. A surrogate endpoint is
expected to predict clinical benefit (or harm or lack of benefit or harm) based on
epidemiologic, therapeutic, pathophysiologic, or other scientific evidence. For example,
blood pressure has served as a surrogate endpoint for morbidity and mortality due to
cardiovascular disease in trials of several classes of antihypertensive drugs. A surrogate
endpoint represents a special use of a biomarker, in which the biomarker substitutes for a
clinical endpoint.81
The Food and Drug Administration Safety and Innovation Act (FDASIA, P.L. 112-144) amended
FFDCA Section 506 by adding the following: “The Secretary shall ... establish a program to
encourage the development of surrogate and clinical endpoints, including biomarkers, and other
scientific methods and tools that can assist the Secretary in determining whether the evidence
submitted in an application is reasonably likely to predict clinical benefit for serious or lifethreatening conditions for which significant unmet medical needs exist.”82
Provision
The provision would add a new FFDCA Section 507, “Qualification of Drug Development
Tools,” which would require the Secretary to establish a process for the qualification of drug
development tools. A drug development tool would be defined to include (1) a biomarker; (2) a
clinical outcome assessment; and (3) any other method, material, or measure that the Secretary
determines aids drug development and regulatory review.
Under new FFDCA Section 507, the Secretary would be allowed to accept a qualification
submission based on factors that include its scientific merit or the available resources of the FDA
to review the submission, and the Secretary would be allowed to prioritize review of a
qualification submission based on factors including, for example, the severity, rarity, or
prevalence of the disease being targeted or the availability or lack of an alternative treatment. The
Secretary would be allowed, through grants or other specified mechanisms, to consult with
biomedical research consortia and may consider the consortia’s recommendations in review of the
qualification submission. “Biomedical research consortia” would be defined as collaborative
groups that may take the form of public-private partnerships and may include, among others,
government agencies, institutions of higher education, patient advocacy groups, industry
representatives, clinical and scientific experts, and other relevant individuals.83 The Secretary
would be required to carry out a full review of the qualification package and to determine if the
drug development tool at issue is qualified for its proposed context of use.
A qualified drug development tool would be allowed to be used to obtain approval or licensure of
a drug or biologic or to support the product’s investigational use. The Secretary would be allowed
to rescind or modify the granted qualification if she determines the drug development tool is not
80
IOM, Perspectives on Biomarker and Surrogate Endpoint Evaluation: Discussion Forum Summary, January 18,
2011, p.6.
81
Ibid.
82
FFDCA §506(d)(2).
83
The provision includes a finding that these consortia can play a valuable role in helping develop and qualify drug
development tools, and a sense of Congress stating that an entity seeking to qualify a drug development tool should be
encouraged to consult with these consortia.
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appropriate for the proposed context, and, if the Secretary does this, the requestor would be
granted a meeting with the Secretary to discuss the basis of the decision.
New FFDCA Section 507 would require the Secretary to make public, and update at least
biannually, certain information, including, for example, information about the qualification
submissions, the Secretary’s determinations in response to the submissions, and any subsequent
modifications to the Secretary’s determinations. It also specifies that nothing in this section would
be construed to allow the Secretary to release any information contained in an application for
approval or licensure of a drug or biologic that is confidential commercial or trade secret
information; in addition, nothing in the section would be allowed to be construed as altering the
standards of evidence for approval or licensure of a drug or biologic or to limit the Secretary’s
authority to approve or license such products.
New FFDCA Section 507 would authorize to be appropriated $10 million for each of fiscal years
FY2016 through FY2020.
The provision would also require the Secretary, not later than 24 months after enactment, to
publish draft guidance to implement new FFDCA Section 507, in consultation with the
biomedical research consortia and other interested parties through a collaborative public process.
The guidance would be required to, for example, make recommendations for demonstrating that a
surrogate endpoint is reasonably likely to predict clinical benefit for the purpose of supporting
accelerated approval of a drug. The Secretary would be required to issue final guidance not later
than six months after the comment period for the draft guidance closes. In order to inform the
guidance, the Secretary would be required, in consultation with the biomedical research consortia,
to develop a taxonomy for the classification of biomarkers for use in drug development. The
Secretary would be required to make this publicly available not later than 12 months after
enactment and finalize the taxonomy not later than 12 months after the public comment period
closes.
The provision would require the Secretary, not later than 12 months after enactment, to convene a
public meeting regarding the qualification process under new FFDCA Section 507. The Secretary
would also be required to publish a report on FDA’s website, not later than five years after
enactment, to include information, as specified.
Funds from the Cures Innovation Fund, as would be established by Section 4041 of this Act,
would be allowed to be made available to be used to carry out the activities in this provision and
amendments made by this provision.
Section 2022. Accelerated Approval Development Plan
Background
For drugs that address unmet needs or serious or life-threatening conditions, have the potential to
offer better outcomes or fewer side effects, or meet other criteria associated with improved public
health, FDA uses several formal mechanisms to expedite development or review processes.84
84
FDA, “DRAFT Guidance for Industry: Expedited Programs for Serious Conditions––Drugs and Biologics,” Center
for Drug Evaluation and Research and Center for Biologics Evaluation and Research, June 2013, http://www.fda.gov/
downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM358301.pdf; and FDA, “Review
Designation Policy: Priority (P) and Standard (S),” MAPP 6020.3 Rev. 2, Manual of Policies and Procedures, Center
for Drug Evaluation and Research, Office of New Drugs, June 25, 2013, http://www.fda.gov/downloads/AboutFDA/
CentersOffices/OfficeofMedicalProductsandTobacco/CDER/ManualofPoliciesProcedures/UCM082000.pdf.
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These include “priority review,” “breakthrough therapy,” and “fast track” designations, and the
accelerated approval pathway.85 FFDCA Section 506(c) authorizes accelerated approval for a
product to treat a serious or life-threatening disease or condition; this pathway allows the
Secretary to approve an application based on the product’s effect on a “surrogate endpoint that is
reasonably likely to predict clinical benefit” or on a clinical endpoint meeting specified criteria.
The Institute of Medicine defined “surrogate endpoint” as
a biomarker that is intended to substitute for a clinical endpoint. A surrogate endpoint is
expected to predict clinical benefit (or harm or lack of benefit or harm) based on
epidemiologic, therapeutic, pathophysiologic, or other scientific evidence. For example,
blood pressure has served as a surrogate endpoint for morbidity and mortality due to
cardiovascular disease in trials of several classes of antihypertensive drugs. A surrogate
endpoint represents a special use of a biomarker, in which the biomarker substitutes for a
clinical endpoint.86
Provision
The provision would add to FFDCA Section 506 a new subsection (g), which would allow the
sponsor of a drug or biological product to request that the Secretary agree to an accelerated
approval development plan if an application for investigation of the product has been submitted
under FFDCA Section 505(i) or PHSA Section 351(a)(3) and the Secretary determines that the
product may be eligible for accelerated approval under FFDCA 506(c). An accelerated approval
development plan would be defined as a plan agreed on by the Secretary and the sponsor that
contains study parameters for the use of a surrogate endpoint that is reasonably likely to predict
clinical benefit and is intended to be the basis of the accelerated approval of a product under
FFDCA 506(c).
An accelerated approval development plan would include, among other things, agreement on the
surrogate endpoint to be assessed and the design of the study that would utilize the surrogate
endpoint. The provision would authorize the Secretary to require the product sponsor to modify
or terminate the plan if data indicate that the plan is no longer sufficient to demonstrate the safety
of the drug involved or the drug is no longer eligible for accelerated approval; in this case, the
sponsor would be granted a request for a meeting to discuss the basis of the Secretary’s decision.
Subtitle C—FDA Advancement of Precision Medicine
Section 2041. Precision Medicine Guidance and Other Programs of Food and
Drug Administration
Background
Precision medicine is a relatively new term for what has traditionally been called personalized
medicine, the idea of providing health care to individuals based on specific patient characteristics.
This approach relies on companion diagnostics to target drugs and biological products to specific
subsets of patients.
85
See FDA, “DRAFT Guidance for Industry: Expedited Programs for Serious Conditions––Drugs and Biologics” table,
pp. 7-8.
86
Institute of Medicine, 2011, “Perspectives on Biomarker and Surrogate Endpoint Evaluation: Discussion Forum
Summary,” p. 6, http://www.iom.edu/Reports/2011/Perspectives-on-Biomarker-and-Surrogate-EndpointEvaluation.aspx.
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Precision drugs and biologicals, because they may be treating small subsets of patients,
sometimes qualify as “orphan drugs.” Such drugs are called orphan drugs because firms may lack
the financial incentives to sponsor products to treat small patient populations. Orphan drugs
receive their designation pursuant to FFDCA Section 526(a),87 a designation that was created by
the Orphan Drug Act88 to encourage firms to develop pharmaceuticals to treat rare diseases and
conditions by providing an extended period of market exclusivity.
For drugs that address unmet needs or serious or life-threatening conditions, have the potential to
offer better outcomes or fewer side effects, or meet other criteria associated with improved public
health, FDA uses several formal mechanisms to expedite development or review processes.89
These include “priority review,” “breakthrough therapy,” and “fast track” designations, and the
accelerated approval pathway.90
Provision
The provision would add a new Subchapter J, Precision Medicine, to Chapter V of the FFDCA;
this subchapter would include two new sections: (1) Section 591, “General agency guidance on
precision medicine,” and (2) Section 592, “Precision medicine regarding orphan-drug and
expedited-approval programs.” New FFDCA Section 591 would require the Secretary, not later
than 18 months after enactment, to issue and periodically update guidance to help sponsors
develop a precision drug or biological product. The guidance would have to, among other things,
define the term “precision drug or biologic product,” and address topics such as the evidence
needed to support the use of biomarkers to identify subsets of patients for streamlining clinical
trials, the design of studies to demonstrate a biomarker’s validity, and considerations for inclusion
of biomarker information in prescription drug or biological labeling.
For a precision drug or biological product application where the product is for the treatment of a
serious or life-threatening disease or condition and has been designated as an orphan drug under
FFDCA Section 526, the new FFDCA Section 592 would allow the Secretary to do two things.
First, the Secretary would be allowed to rely on information about the drug or biological product
that has been previously submitted, either by the same or a different sponsor (with permission), in
approval of an application. This may be for either a new product, or for a different indication for
an existing product. Second, it would allow the Secretary to consider the application for expedited
review programs, including accelerated approval. New Section 592 should not be construed to
limit the Secretary’s product approval authorities, or to entitle sponsors to obtain information in
another sponsor’s application without permission of the other sponsor.
87
FFDCA Section 526, “Designation of Drugs for Rare Diseases or Conditions”; 21 U.S.C. 360bb.
P.L. 97-414, 96 Stat. 2049 (1982).
89
FDA, “DRAFT Guidance for Industry: Expedited Programs for Serious Conditions––Drugs and Biologics,” Center
for Drug Evaluation and Research and Center for Biologics Evaluation and Research, June 2013, http://www.fda.gov/
downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM358301.pdf; and FDA, “Review
Designation Policy: Priority (P) and Standard (S),” MAPP 6020.3 Rev. 2, Manual of Policies and Procedures, Center
for Drug Evaluation and Research, Office of New Drugs, June 25, 2013, http://www.fda.gov/downloads/AboutFDA/
CentersOffices/OfficeofMedicalProductsandTobacco/CDER/ManualofPoliciesProcedures/UCM082000.pdf.
90
The fast track and breakthrough therapy designations and the accelerated approval pathway are authorized under
FFDCA Section 506, “Expedited approval of drugs for serious or life-threatening diseases or conditions”; 21 U.S.C.
356. See FDA, “DRAFT Guidance for Industry: Expedited Programs for Serious Conditions––Drugs and Biologics,”
table, pp. 7-8.
88
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Subtitle D—Modern Trial Design and Evidence Development
Section 2061. Broader Application of Bayesian Statistics and Adaptive Trial
Designs
Background
The traditional approach to clinical trials for drugs has focused on a design planned in advance
that includes specific treatments and doses and durations, specified decision rules for
patient/subject assignment to treatment groups, and prespecified statistical analysis to test a
prespecified qualitative and quantitative hypothesis. Because the analytic plan is set in advance, it
does not lend itself to unintentional (or intentional) bias as data are reviewed. A researcher may
feel strongly about a hypothesis and hope that the results will confirm an idea, but he or she must
carry out the analysis so the results can be understood and replicated by others. A drawback to
trials with this kind of static design is that they tend to take a long time and cannot adapt to new
information learned during the trial. In recent years, some clinical and methodological researchers
have looked to adaptive trial designs and statistical analyses using techniques (such as Bayesian
statistics) that can provide mid-course feedback. Because a mistaken finding of effectiveness or
safety could put a dangerous drug on the market or delay the approval of a useful drug, FDA has
acted cautiously in accepting alternative trial designs. In 2010, FDA published draft guidance on
the use of adaptive trial design.91
Provision
The provision would require the Secretary to (1) update and finalize the draft guidance and (2)
“issue draft guidance on the use of Bayesian methods in the development and regulatory review
and approval or licensure of drugs and biological products.” It would require that the guidances
address the use of adaptive designs and Bayesian methods to meet the “substantial evidence”
standard in FDA’s review of safety and effectiveness data in marketing applications, technical
feedback to drug sponsors, “the types of quantitative and qualitative information that should be
submitted for review,” and “recommended analysis methodologies.” The provision would require
the Secretary to conduct a public meeting of stakeholders before “updating or developing” these
two guidances. The provision would require the Secretary to publish the first guidance no later
than 18 months after the date of the public meeting, and the second guidance no later than 48
months after the date of the public meeting.
Section 2062. Utilizing Evidence from Clinical Experience
Background
To approve a new drug for marketing in the United States, FDA reviews the sponsor’s new drug
application (NDA) to assess, among other things, whether the drug is safe and effective for its
intended purpose. FFDCA Section 505(d) refers to “substantial evidence,” which it defines as
evidence consisting of adequate and well-controlled investigations, including clinical
investigations, by experts qualified by scientific training and experience to evaluate the
91
FDA, “DRAFT Guidance for Industry: Adaptive Design Clinical Trials for Drugs and Biologics,” Center for Drug
Evaluation and Research and Center for Biologics Evaluation and Research, February 2010, http://www.fda.gov/
RegulatoryInformation/Guidances/default.htm.
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effectiveness of the drug involved, on the basis of which it could fairly and responsibly
be concluded by such experts that the drug will have the effect it purports or is
represented to have under the conditions of use prescribed, recommended, or suggested in
the labeling or proposed labeling thereof. If the Secretary determines, based on relevant
science, that data from one adequate and well-controlled clinical investigation and
confirmatory evidence (obtained prior to or after such investigation) are sufficient to
establish effectiveness, the Secretary may consider such data and evidence to constitute
substantial evidence for purposes of the preceding sentence. The Secretary shall
implement a structured risk-benefit assessment framework in the new drug approval
process to facilitate the balanced consideration of benefits and risks, a consistent and
systematic approach to the discussion and regulatory decisionmaking, and the
communication of the benefits and risks of new drugs. Nothing in the preceding sentence
shall alter the criteria for evaluating an application for premarket approval of a drug.
The associated rules (21 C.F.R. 314.126) describe characteristics of “adequate and well-controlled
studies,” which include a statement of objectives, an analytic plan, a control group, quantification
of treatment duration and timing, and method of sample size determination. The study design
would lead to the identification of appropriate research subjects and include methods to minimize
bias in the assignment of subjects to treatment groups as well as in data analysis.
These characteristics basically describe a controlled (often randomized) clinical trial. The rule,
however, places these characteristics in the context of having “been developed over a period of
years and are recognized by the scientific community as the essentials of an adequate and wellcontrolled clinical investigation.” The rule states that FDA “consider” these characteristics in its
determination of effectiveness claims.
Provision
The provision would add a new Section 505F to the FFDCA, requiring the Secretary to “establish
a program to evaluate the potential use of evidence from clinical experience to help support the
approval of a new indication for a drug approved under Section 505(b) and to help support or
satisfy postapproval study requirements.” The provision would define “evidence from clinical
experience” as “data regarding the usage, or the potential benefits or risks, of a drug derived from
sources other than randomized clinical trials, including from observational studies, registries, and
therapeutic use.” It would require the Secretary to establish a draft framework for implementing
the program to include specified content. Required consultation with interested parties could be
done via a public-private partnership or a contract, grant, or other appropriate arrangement. The
Secretary would be required to use the new “program to evaluate the potential use of evidence
from clinical experience” to “inform” the development of guidance for industry. The provision
would also state that “[t]this section shall not be construed to alter the standards of evidence
under” Section 505(c) or (d) of the FFDCA, including the substantial evidence standard; Section
351(a) of the PHSA; or “the Secretary’s authority to require postapproval studies or clinical trials,
or the standards of evidence under which studies or trials are evaluated.”
This provision would add a new Section 505G to the FFDCA, requiring the Secretary to design
and implement pilot demonstrations to use “data captured through the Sentinel System92
surveillance infrastructure” to generate evidence of drugs’ risks or benefits, protect the public
92
In May 2008, FDA launched the Sentinel Initiative “to develop and implement a proactive system”—the Sentinel
System—to actively query existing sources of healthcare data (e.g., electronic health record systems and insurance
claims databases) “to evaluate possible medical product safety issues quickly and securely.” HHS, FDA, FDA’s
Sentinel Initiative, http://www.fda.gov/Safety/FDAsSentinelInitiative/default.htm.
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health, and advance patient-centered care. The provision would allow the Secretary to “make
strategic linkages with sources of complementary public health data and infrastructure.”
Regarding these pilots, the Secretary would be required to “(A) consult with regulated industry,
academia, medical professional organizations, representatives of patient advocacy organizations,
disease research foundations, and other interested parties through a public process; and (B)
develop a framework to promote appropriate transparency and dialogue about research.”
In addition, the new FFDCA Section 505G would allow the Secretary to deem such pilot
demonstrations to be “public health activities” for purposes of permitting the use and disclosure
of protected health information (as specified)93 and placing them “outside the scope of
‘research’”94 for purposes of human subjects research protections (as specified).
The provision would also authorize to be appropriated $3 million for each of fiscal years FY2016
through FY2020.
Section 2063. Streamlined Data Review Program
Background
FFDCA Section 505 and accompanying regulations provide the framework for FDA’s approval of
sponsors’ drug marketing applications. For a drug whose active ingredient has never been FDAapproved, the law requires the sponsor to submit a new drug application that includes data to
provide evidence of the drug’s safety and effectiveness for its intended use, information about the
manufacturing process, and the drug labeling. Once a product has an approved NDA, FDA
requires that the manufacturer submit a supplemental NDA each time the manufacturer wants to
change the labeling, the manufacturing process, or the dosing, or when it wants to add a new
indication (a new intended use) of the drug. Regulations at 21 C.F.R. Sections 314.50 and 314.54
describe the required contents of those applications. Regarding clinical data, the regulations direct
the applicant to submit, in addition to descriptions and analysis of controlled and uncontrolled
clinical studies,
(iv) A description and analysis of any other data or information relevant to an evaluation
of the safety and effectiveness of the drug product obtained or otherwise received by the
applicant from any source, foreign or domestic, including information derived from
clinical investigations, including controlled and uncontrolled studies of uses of the drug
other than those proposed in the application, commercial marketing experience, reports in
the scientific literature, and unpublished scientific papers.
(21
C.F.R.
314.50(d)(5)(iv))
The clinical data submission must also include an “integrated summary of the data demonstrating
substantial evidence of effectiveness for the claimed indications.”
Provision
The provision would add a new Section 505H to the FFDCA that would address the data
requirements in a supplemental NDA that a sponsor of an approved drug would submit when
seeking to add to the approval a new indication that is “qualified” (defined in this section as
treating cancer or other indications as determined by the Secretary). FFDCA Section 505H would
require the Secretary to “establish a streamlined data review program” through which a sponsor
93
94
45 C.F.R. §164.512(b)(1).
45 C.F.R. §46.102(d).
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could submit a “qualified data summary,” defined as “a summary of clinical data intended to
demonstrate safety and effectiveness with respect to a qualified indication for use of a drug,”
when “there is an existing database acceptable to the Secretary regarding the safety of the drug
developed for one or more indications” of the approved drug. The sponsor would also be required
to submit “the full data sets used to develop the qualified data summaries ... unless the Secretary
determines that the full data sets are not required.”
The provision would state a sense of Congress that the new streamlined data review program
“should enable the Food and Drug Administration to make approval decisions for certain
supplemental applications based on qualified data summaries (as defined in such section 505H).”
The provision would require that the Commissioner of Food and Drugs issue implementation
guidance for the streamlined data review program and would allow the Commissioner to issue
regulations for implementation.
Subtitle E—Expediting Patient Access
Section 2081. Sense of Congress
Background
FDA uses several formal mechanisms to expedite the development or review processes for drugs
that address unmet needs or serious conditions, that have the potential to offer better outcomes or
fewer side effects, or that meet other criteria associated with improved public health. FFDCA
Section 506, which Congress added in 2012,95 introduced the breakthrough therapy designation
for a drug that would treat a serious condition and for which preliminary clinical evidence
indicates that the drug may demonstrate substantial improvement over available therapies on a
clinically significant endpoint (or endpoints). FDA provides breakthrough therapies with
intensive guidance during drug development and organizational commitment involving senior
managers. The requirements for drug approval, however, do not change.96 Breakthrough therapy
designation, therefore, affects the timing and smoothness of the application process. Such
designation does not alter the types of evidence required to demonstrate safety and effectiveness.
Provision
The provision would express the sense of Congress that FDA should approve drugs designated as
breakthrough therapies “as early as possible in the clinical development process, regardless of the
phase of development,” provided that the applications meet existing standards of evidence of
safety and effectiveness, as determined by the HHS Secretary.
Section 2082. Expanded Access Policy
Background
FDA regulates the U.S. sale of drugs and biological products, basing approval or licensure on
evidence of the safety and effectiveness for a product’s intended uses. Without that approval or
95
Section 902 of the Food and Drug Administration Safety and Innovation Act (FDASIA), P.L. 112-144.
The FFDCA and agency regulations allow alteration of the evidence required for approval in other circumstances;
these alterations are not connected to breakthrough designation.
96
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licensure, a manufacturer may not distribute the product except for use in the clinical trials that
will provide evidence to determine that product’s safety and effectiveness. Under certain
circumstances, however, FDA may permit the sponsor to provide an unapproved or unlicensed
product to patients outside that standard regulatory framework. One such mechanism is expanded
access to investigational drugs, commonly referred to as compassionate use.
If excluded from a clinical trial because of its enrollment limitations, a person, acting through a
physician, may request access to an investigational new drug outside of the trial. FDA may grant
expanded access to a patient with a serious disease or condition for which there is no comparable
or satisfactory alternative therapy, if, among other requirements, probable risk to the patient from
the drug is less than the probable risk from the disease; if there is sufficient evidence of safety and
effectiveness to support the drug’s use for this person; and if providing access “will not interfere
with the ... clinical investigations to support marketing approval.”97 The widespread use of
expanded access is limited by an important factor: whether the manufacturer agrees to provide the
drug, which—because it is not FDA-approved—cannot be obtained otherwise. FDA does not
have the authority to compel a manufacturer to participate. Manufacturers consider several factors
in deciding whether to provide an investigational drug, such as available supply, perceived
liability risk, limited staff and facility resources, and need for data to assess safety and
effectiveness. Although FDA reports the number of investigational drug requests it receives,
manufacturers do not.
Provision
The provision would add a new Section 561A to the FFDCA to require the manufacturer or
distributor of an investigational drug to make publicly available its policy “on evaluating and
responding to requests ... for provision of such a drug.” Required elements of the policy would
include contact information for the manufacturer or distributor of the drug, request procedures,
“the general criteria the manufacturer or distributor will consider or use to approve such
requests,” and anticipated time to acknowledge request receipts. The new section would state that
posting of policy would not guarantee patients access to an investigational drug. The provision
would also allow the manufacturer or distributor to revise its policy at any time.
Section 2083. Finalizing Draft Guidance on Expanded Access
Background
FFDCA Section 561(b) allows a person, acting through a licensed physician, to request a
manufacturer or distributor of an investigational product to provide that product under specified
circumstances and conditions. The sponsor or clinical investigator must provide the HHS
Secretary with information as required by regulations. Although FDA has approved patient access
in over 99% of the requests to which the sponsor has agreed, some sponsors have been reluctant
to provide investigational drugs outside of the standard investigational new drug (IND) processes
because of the uncertainty of how FDA would consider potential adverse events associated with
the expanded access use in its assessment of the drug’s safety, which could influence whether an
NDA is approved.
97
FFDCA Section 561(b).
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Provision
This provision would require that the HHS Secretary finalize the guidance “Expanded Access to
Investigational Drugs for Treatment Use—Qs & As,” issued in draft form in May 2013.98 The
provision would require that the final guidance “clearly define how the Secretary of Health and
Human Services interprets and uses adverse drug event data reported by investigators in the case
of data reported from use under a request submitted under” FFDCA Section 561(b).
Subtitle F—Facilitating Responsible Manufacturer
Communications
Section 2101. Facilitating Dissemination of Health Care Economic Information
Background
FFDCA Section 502 includes “[i]f its labeling is false or misleading in any particular” in the list
of circumstances under which a drug is “deemed to be misbranded.” It allows a drug’s sponsor
(usually its manufacturer or distributor) to provide health care economic information to entities
such as formulary committees for use in decisions regarding drug selection for managed care. The
section defines “health care economic information” to mean “any analysis that identifies,
measures, or compares the economic consequences, including the costs of the represented health
outcomes, of the use of a drug to the use of another drug, to another health care intervention, or to
no intervention.” The information must be “based on competent and reliable scientific evidence.”
Provision of this information is allowed only regarding indications that are included in the drug’s
approval; the provision of health care economic information regarding unapproved indications
could be considered false and misleading.
Provision
The provision would amend the description of the recipient of the information to include a
“payor” and to refer to the use of the information in the “selection of drugs for coverage or
reimbursement.” The requirement that information be “based on competent and reliable scientific
evidence” would be expanded to include “where applicable, a conspicuous and prominent
statement describing any material differences between the health care economic information and
the labeling approved for the drug.”
The provision would amend the definition of “health care economic information” to include “the
clinical data, inputs, clinical or other assumptions, methods, results, and other components
underlying or comprising the analysis.” It would specify that the economic consequences “may be
based on the separate or aggregated clinical consequences of the represented health outcomes, of
the use of a drug.” Lastly, the revised definition would rephrase the reference to comparisons,
without an apparent change in authority or policy.
98
FDA, “DRAFT Guidance for Industry: Expanded Access to Investigational Drugs for Treatment Use—Qs & As,”
May 2013, http://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/guidances/ucm351261.pdf
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Section 2102. Facilitating Responsible Communication of Scientific and
Medical Developments
Background
FFDCA Section 505 governs approval of new drugs; approval is linked to the intended use
(indication) of the drug, for which FDA reviews evidence of safety and effectiveness that the
sponsor provides. Approval is also linked to the drug labeling provided by the sponsor. Intended
uses not covered by the approval are not included in the labeling.
FFDCA Section 502 describes circumstances under which a product is to be deemed misbranded.
Among those are when labeling is false or misleading. FDA has interpreted the FFDCA,
therefore, to prohibit a manufacturer from promoting or advertising a drug for any use not listed
in the FDA-approved labeling, which contains those claims for which FDA has reviewed safety
and effectiveness evidence.99 However, FDA’s interpretation has been challenged and is in
dispute.100
FDA has acknowledged that the manufacturer has information that may be useful to clinicians in
their treatment of patients. In a 2009 guidance,101 for example, the agency noted that “[o]nce a
drug or medical device has been approved or cleared by FDA, generally, healthcare professionals
may lawfully use or prescribe that product for uses or treatment regimens that are not included in
the product’s approved labeling (or, in the case of a medical device cleared under the 510(k)
process, in the product’s statement of intended uses).” FDA, therefore, recognized the “public
health and policy justification” in allowing certain information on unapproved uses of approved
products. FDA has released several draft guidance documents102 to characterize the circumstances
in which it would allow manufacturers to provide information on off-label uses of drugs approved
99
Materials from FDA’s Bad Ad Program describe elements of false or misleading ads. These include promotion of an
unapproved use. See FDA, “Truthful Prescription Drug Advertising and Promotion,” http://www.fda.gov/Drugs/
GuidanceComplianceRegulatoryInformation/Surveillance/DrugMarketingAdvertisingandCommunications/
ucm209384.htm#ExamplesofViolations. See also FFDCA §§ 301 and 502(a).
100
A December 2012 Court of Appeals decision (United States v. Caronia) “reversed the criminal conviction of a
pharmaceutical representative who had promoted an off-label use of a drug on First Amendment grounds” (Andrew
Nolan, “Is There a Constitutional Right to Promote an Unapproved Use for a Drug?” Legal Sidebar, Congressional
Research Service, April 2, 2013, http://www.crs.gov/LegalSidebar/details.aspx?ID=436&Source=search).
101
FDA, “Guidance for Industry: Good Reprint Practices for the Distribution of Medical Journal Articles and Medical
or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical
Devices,” Office of the Commissioner, Office of Policy, January 2009, http://www.fda.gov/RegulatoryInformation/
Guidances/ucm125126.htm.
102
FDA, “‘Off-Label’ and Investigational Use Of Marketed Drugs, Biologics, and Medical Devices - Information
Sheet,” Guidance for Institutional Review Boards and Clinical Investigators, http://www.fda.gov/
regulatoryinformation/guidances/ucm126486.htm; FDA, “DRAFT Guidance for Industry: Distributing Scientific and
Medical Publications on Risk Information for Approved Prescription Drugs and Biological Products—Recommended
Practices,” Center for Drug Evaluation and Research, Center for Biologics Evaluation and Research, and Center for
Veterinary Medicine, June 2014, http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/
Guidances/UCM400104.pdf; FDA, “Revised DRAFT Guidance for Industry: Distributing Scientific and Medical
Publications on Unapproved New Uses—Recommended Practices,” Center for Drug Evaluation and Research, Center
for Biologics Evaluation and Research, and Center for Devices and Radiological Health, February 2014,
http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM387652.pdf; and
FDA, “DRAFT Guidance for Industry: Responding to Unsolicited Requests for Off-Label Information About
Prescription Drugs and Medical Devices,” Center for Drug Evaluation and Research, Center for Biologics Evaluation
Research, Center for Veterinary Medicine, and Center for Devices and Radiological Health, December 2011,
http://www.fda.gov/downloads/drugs/guidancecomplianceregulatoryinformation/guidances/ucm285145.pdf.
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for other uses without triggering the misbranding provision and without using a manufacturer’s
dissemination of the information as evidence of an intended new indication.
Provision
The provision would require the HHS Secretary to “issue draft guidance on facilitating the
responsible dissemination of truthful and non-misleading scientific and medical information not
included in the approved labeling of drugs and devices.”
Subtitle G—Antibiotic Drug Development
Section 2121. Approval of Certain Drugs for Use in a Limited Population of
Patients
Background
According to the CDC, each year in the United States, at least 2 million people become infected
with bacteria that are resistant to antibiotics, and at least 23,000 of them die from these
infections.103 Antibiotics are intended for short-term use, making the development of new ones
potentially less attractive to drug developers. Addressing barriers to antibiotic drug approval may
help counter this problem. One such proposal is the so-called Limited Population Antibacterial
Drug (LPAD) approval pathway for new antibacterial drugs.104 Such a pathway would involve
smaller clinical trials in a limited population of patients that have serious or life-threatening
infections and unmet medical needs due to the lack of an effective approved antibiotic. This
streamlined approach would result in more uncertainty about potential risks posed by the product,
and therefore a greater need for post-market scrutiny.105
Provision
The stated purpose of this provision, in subsection (a), is
to help expedite the development and availability of treatments for serious or lifethreatening bacterial or fungal infections in patients with unmet needs, while maintaining
safety and effectiveness standards for such treatments, taking into account the severity of
the infection and the availability or lack of alternative treatments.
It would do so by adding, in subsection (b), a new FFDCA subsection 505(z), an expedited
review pathway, effective upon enactment, for certain antibacterial and antifungal drugs
(including biologics) intended for use in limited, defined populations of patients that have severe,
life-threatening infections for which current treatment options may be limited or absent, and for
103
Centers for Disease Control and Prevention (CDC), “Antibiotic Resistance Threats in the United States, 2013,”
http://www.cdc.gov/drugresistance/threat-report-2013/.
104
See for example testimony of Janet Woodcock, Director, FDA Center for Drug Evaluation and Research, U.S.
Congress, House Committee on Energy and Commerce, Subcommittee on Health, 21st Century Cures: Examining
Ways to Combat Antibiotic Resistance and Foster New Drug Development, 113th Cong., 2nd sess., September 19, 2014,
http://www.fda.gov/newsevents/testimony/ucm415387.htm.
105
Ibid. See also Executive Office of the President, President’s Council of Advisors on Science and Technology
(PCAST), Report to the President on Combating Antibiotic Resistance, “Goal 4.2. Drug approval based on clinical
trials in limited patient populations,” September 2014, pp. 32 ff., https://www.whitehouse.gov/administration/eop/ostp/
pcast.
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which the benefits of a product could outweigh harms that would not be acceptable in broader
population use. This review pathway would include the following elements, among others:







Upon a sponsor’s request, FDA may enter into written agreement with the
sponsor to define the process and data needed to review the limited population
use application. The process could not proceed without such written agreement.
The Secretary may consider limited data sets and non-clinical data as substantial
evidence of safety and effectiveness, recognizing the smaller populations
available for study of an LPAD drug, and the different balance of benefit versus
harm in these populations.
The process must adhere to existing goals and procedures agreed upon by
sponsors and FDA in the Prescription Drug User Fee Amendments of 2012 (P.L.
112-144, Title I).
Products approved using this pathway must carry prominent labeling noting the
intended use for a limited and specific population of patients.
Sponsors must submit promotional materials to FDA for review 30 days prior to
dissemination.
Sponsors may pursue this pathway concurrently with other specified streamlined
approval pathways, as applicable.
This provision would not alter current prescribing or other medical practices
(such as off-label prescribing).
Subsection (c) of this provision would require FDA to issue draft implementation guidance within
18 months of enactment. Subsection (d) provides conforming amendments. Subsection (e) would
require the Secretary to conduct and publish an assessment of the program within 48 months of
enactment, and seek public input. Subsection (f) would allow the Secretary to expand the limited
population use pathway if deemed beneficial by the assessment above. Subsection (g) would add
a new subsection 317U to the PHSA to establish a monitoring system for the use of antibacterial
and antifungal drugs, including products approved under the limited population use pathway, as
well as changes in bacterial and fungal resistance to drugs. The Secretary would be required to
make summaries of data from this system publicly available.
Section 2122. Susceptibility Test Interpretive Criteria for Microorganisms
Background
Laboratory tests can help clinicians determine whether a drug is likely to work against a specific
infection by showing whether the infectious organism is susceptible (vs. resistant) to that drug.
The criteria that distinguish susceptibility from resistance are called “breakpoints.” Under current
law and regulation, breakpoint information must be provided on antimicrobial drug labels, and
labels for Antimicrobial Susceptibility Testing (AST) devices must reflect the relevant drug
label(s). Generally, sponsors must apply to make changes to information contained in these drug
and device labels, and FDA must approve label changes for these drugs and devices. However,
the susceptibility of infectious organisms may change over time, rendering label information
inaccurate for clinical decision-making purposes. FDA, clinicians, and others have sought to
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streamline FDA’s process to ensure that antimicrobial drug and AST device labels reflect current
information.106
Provision
Subsection (a) of this provision would replace the existing language of FFDCA Section 511
(which requires the Secretary to publish guidance for industry regarding the review of antibiotic
drugs) with new language. It would require the Secretary to establish, within one year of
enactment, a public “Interpretive Criteria Website,” and to review and revise the content of such
website every six months thereafter. The stated purpose of the website is to identify and publish
current, generally accepted standards, including breakpoint information (i.e., interpretive criteria),
used to guide testing of test bacteria, fungi, or other microorganisms for susceptibility to
antimicrobial drugs, and to use these criteria to inform the use of AST devices.
The Secretary would be required to identify appropriate susceptibility test interpretive criteria
(“criteria”) for approved or licensed antimicrobial drugs through review of preclinical, clinical,
and statistical information and other available evidence. Within one year of enactment, the
Secretary would be required to establish, and thereafter maintain, the Interpretive Criteria Website
containing two lists: (1) a list of any criteria standards established by a nationally or
internationally recognized standard development organization, where such organization meets
specified requirements for transparency and management of potential conflicts of interest, among
other things; and (2) a list of criteria that, although determined by the Secretary to be appropriate
with respect to approved or licensed antimicrobial drugs, lack a recognized standard, for one of
several stated reasons. The website would have to include several specific disclaimers regarding
the uses and limitations of the information presented. The Secretary would be required to publish
in the Federal Register a notice of establishment of the website not later than the date on which it
is established.
The Secretary would be required to review any new or updated criteria standards from a
recognized standard development organization, revise the website accordingly, and make public a
notice of any such revisions on the FDA agency website, at least every six months. Any such
notices would be required to be compiled and published in the Federal Register at least annually,
with a request for public comments. The Secretary would be allowed to consider public
comments, among other things, in revising website content.
Both criteria standards and non-standard criteria listed on the website would be considered to be
recognized standards for the purpose of premarket review and other legal requirements for
devices, pursuant to FFDCA Section 514(c)(1). However, sponsors would be allowed to use
standards other than those listed by FDA under this section in seeking approval or clearance of a
drug or device. The provision would require that antimicrobial drugs sold after the Interpretive
Criteria Website is established carry a reference to the website on the label, and that sponsors of
antimicrobial drugs sold before the website was established submit, within one year of
establishment of the website, supplemental applications to similarly change the label. The
provision would clarify that reference to the website in the labeling of an antimicrobial drug
106
See, for example, testimony of Janet Woodcock, Director, FDA Center for Drug Evaluation and Research, U.S.
Congress, House Committee on Energy and Commerce, Subcommittee on Health, 21st Century Cures: Examining
Ways to Combat Antibiotic Resistance and Foster New Drug Development, 113th Cong., 2nd sess., September 19, 2014,
http://www.fda.gov/newsevents/testimony/ucm415387.htm; and FDA, “Guidance for Industry, Updating Labeling for
Susceptibility Test Information in Systemic Antibacterial Drug Products and Antimicrobial Susceptibility Testing
Devices,” June 2009.
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would not constitute misbranding, and state that FFDCA Section 511 should not be construed to
allow the Secretary to disclose protected trade secret or confidential information.
The provision would allow the Secretary to authorize the marketing of an AST device for which
the label references information from the website in lieu of information from clinical trials, and
directs practitioners to information on the labels of drugs tested using such device.
Subsection (b) of the provision would make conforming amendments to the FFDCA. Subsection
(c) would require the Secretary to report to Congress regarding progress in implementing this
section. Subsection (d) would exempt FDA from requirements under the Paperwork Reduction
Act when updating the list of susceptibility test interpretive criteria standards.107 Subsection (e)
states that provisions of Subtitle G of the bill should not be construed to restrict antibiotic or other
drug prescribing or administering practices by health care practitioners.
Section 2123. Encouraging the Development and Use of DISARM Drugs
Background
Under Medicare’s Hospital Inpatient Prospective Payment System (IPPS), reimbursement is often
predetermined for each discharge based on a patient’s condition and related treatment strategy,
and other factors. To account for patients’ needs, Medicare assigns discharges to Medicareseverity diagnosis related groups (MS-DRGs). The capitated MS-DRG payment can discourage
the use of new technologies if they are more expensive than standard care. To address this,
Sections 1886(d)(5)(K) and (L) of the Social Security Act (SSA) authorize additional payments
for new medical services and technologies under the IPPS in addition to the MS-DRG
reimbursement.108
In 2012, Congress passed the Generating Antibiotic Incentives Now (GAIN) Act (Title VIII of the
Food and Drug Administration Safety and Innovation Act, P.L. 112-144) to address barriers to
antibiotic drug development. Under GAIN, a qualified infectious disease product (QIDP)—
defined as a human antibacterial or antifungal drug intended to treat serious or life-threatening
infections—would, among other things, be eligible for expedited FDA review and extended
postmarket patent exclusivity under FFDCA Section 505E.109
Provision
Subsection (a) of this provision would add a new subparagraph 1886(d)(5)(M) to the SSA to
provide add-on payments under the IPPS for the use of “DISARM drugs” for discharges from
eligible hospitals, beginning with FY2018. It defines a “DISARM drug” as one that is FDAapproved on or after December 1, 2014, and that FDA determines is an antimicrobial product (1)
that is intended to treat an infection for which there is an unmet medical need and that is
associated with high mortality or morbidity, as determined by FDA in consultation with the CDC
Director and the infectious disease professional community; and (2) that is either intended to treat
a qualifying pathogen, or is a QIDP (as defined in FFDCA Sections 505E(f) and 505E(g),
107
See CRS Report R40636, Paperwork Reduction Act (PRA): OMB and Agency Responsibilities and Burden
Estimates.
108
Centers for Medicare & Medicaid Services (CMS), “New Medical Services and New Technologies,”
http://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/newtech.html.
109
See “Title VIII—Generating Antibiotic Incentives Now,” in CRS Report R42680, The Food and Drug
Administration Safety and Innovation Act (FDASIA, P.L. 112-144).
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respectively). Once made, such determination would be revocable only if the request for it
contained a false statement. The Secretary would be required to list new antimicrobial drugs that
are eligible for add-on payments in annual IPPS rulemaking. Once listed, add-on payments made
for new antimicrobial drugs would be made for the first five consecutive fiscal years (and would
include prior fiscal years if an antimicrobial drug qualified as a new technology add-on payment).
The provision defines “eligible hospital” to mean an acute care hospital in the 50 states and
Washington, DC, that is reimbursed by Medicare under the IPPS and that reports its antimicrobial
drug use data to the CDC’s National Healthcare Safety Network or similar surveillance system.
Additional payment for an eligible DISARM drug would be in the amount provided for such drug
under SSA Section 1847A, which establishes Medicare’s reimbursement methodology for drugs
covered under Medicare Part B. The total amount of add-on payments for DISARM drugs during
a fiscal year would be capped at 0.02% of the estimated total Medicare program payments made
under SSA Section 1886(d) during such fiscal year. The Secretary would be allowed to reduce the
reimbursement rates pro rata for DISARM drugs to ensure add-on payments do not exceed the
0.02% cap.
Conforming amendments would ensure no duplication under the new medical services and
technology add-on payment policy for an eligible drug. In addition, this provision would require
manufacturers participating in the Medicaid drug rebate program (under SSA Section 1927) to
report to the Secretary within 30 days of the end of each rebate period the manufacturer’s
wholesale acquisition cost and information on sales at a nominal price. These data, like other drug
price data required under the Medicaid rebate program for Medicare drugs (under SSA Section
1847A), would have to be reported by National Drug Code and package size.
Subsection (b) of this provision would require the Comptroller General to study and report within
one year of enactment on barriers to the development of DISARM drugs, and make
recommendations to overcome such barriers.
Subsection (c) of this provision would require the CDC Director to study and report within three
years of enactment on the impact of additional Medicare payment for DISARM drugs on usage
practices and the development of resistance by individuals to such drugs.110
Subtitle H—Vaccine Access, Certainty, and Innovation
Background
Authority for the National Vaccine Program (NVP), in Title XXI of the PHSA, establishes
responsibilities for the Secretary of HHS to coordinate a variety of vaccine activities across the
federal government. The Advisory Committee on Immunization Practices (ACIP) advises the
Director of the Centers for Disease Control and Prevention regarding the use of vaccines that are
licensed by the Food and Drug Administration for use in the United States.111 ACIP is not
explicitly authorized in the PHSA or elsewhere in federal law. Rather, its authority is based in
general authority of the HHS Secretary to establish advisory committees.112 However, ACIP has
110
Amendment 5 (Slaughter) to H.R. 6 added subsection (c) regarding the CDC report; it was approved by voice vote.
The FDA evaluates the safety and effectiveness of individual vaccine products in making its licensure decisions.
The ACIP recommends how licensed vaccines should be used for specific public health purposes, for example, the
routine immunization of infants, or use among selected groups for outbreak control.
112
PHSA Section 222; 42 U.S.C. §217a.
111
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been given explicit statutory roles under the PHSA and the Social Security Act (SSA), and ACIP’s
actions pursuant to these roles affect the market for vaccine products. These roles are as follows:


PHSA Section 2713 requires most private health insurance plans, unless
grandfathered, to cover, without any cost-sharing, immunizations recommended
by ACIP.113 Pursuant to regulations, this requirement is effective for a vaccine if
and when an ACIP recommendation for use of that vaccine has been adopted by
CDC and published on CDC’s Immunization Schedules.114
SSA Section 1928 establishes the Vaccines for Children (VFC) program, which
provides federally purchased vaccines free of charge to eligible children.115 VFC
vaccines are those for which ACIP has issued a recommendation for use in
children.
ACIP is subject to requirements of the Federal Advisory Committee Act, which is intended to
improve the transparency of executive branch advisory committees.116 It typically meets three
times per year to discuss and vote on recommendations. Vaccine-specific work groups within
ACIP carry out their work during and between full committee meetings.117
Section 2141. Timely Review of Vaccines by the Advisory Committee on
Immunization Practices
Provision
The provision would add a 10th item to the statutory list of responsibilities of the Director of the
National Vaccine Program, pursuant to PHSA Section 2102(a). It would require the NVP Director
to direct ACIP to consider the use of any vaccine newly licensed or licensed for a new indication
by FDA at the committee’s next regularly scheduled meeting. It would require ACIP to make
recommendations on an expedited basis in two circumstances: (1) if ACIP does not issue
recommendations regarding a licensed vaccine at its next regularly scheduled meeting, and is then
asked by the vaccine’s sponsor to make such recommendations on an expedited basis; or (2) when
FDA licenses a vaccine that is designated as a breakthrough therapy to treat a serious or lifethreatening disease or condition (pursuant to Section 506 of the Federal Food, Drug, and
Cosmetic Act [FFDCA]).
Section 2142. Review of Processes and Consistency of ACIP Recommendations
Provision
The provision would require the CDC Director to review ACIP processes, evaluation criteria, and
consistency in issuing recommendations, and to publish a report on such review not later than 18
113
42 U.S.C. § 300gg-13(a)(2). Regulations are at 45 C.F.R. §147.130.
An immunization schedule is the series of immunizations recommended for an individual over time, depending on
age and other characteristics. CDC, “Immunization Schedules,” http://www.cdc.gov/vaccines/schedules/index.html.
115
SSA subsections 1928(c) (2)(B)(i) and 1928(e); 42 U.S.C. §§1396s(c)(2)(B)(i) and 1396s(e). For more information,
see CDC VFC home page, http://www.cdc.gov/vaccines/programs/vfc/index.html.
116
For more information, see CRS Report 97-71, Access to Government Information In the United States: A Primer.
117
For more information about the ACIP, see CDC ACIP home page, http://www.cdc.gov/vaccines/acip/index.html.
114
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months after enactment, including recommendations to improve the consistency of ACIP’s
processes.
Section 2143. Meetings Between CDC and Vaccine Developers
Provision
The provision would require CDC personnel to meet with vaccine developers regarding their
vaccine products that are either licensed by FDA, or for which a developer intends to seek
licensure. The stated purpose is for CDC to share with developers information about
epidemiology and related matters that could inform the sponsor’s vaccine research and
development plan. The section specifies types of information that may be shared, deadlines,
representation at meetings, and other administrative matters.
Subtitle I—Orphan Product Extensions Now; Incentives for Certain
Products for Limited Populations
Section 2151. Extension of Exclusivity Periods for a Drug Approved for a New
Indication for a Rare Disease or Condition
Background
Through various statutory authorities and regulatory actions, FDA provides incentives to those
who would develop certain categories of drugs. The main set of incentives is the granting of
market exclusivity. The FFDCA has provisions to grant market exclusivity for statutorily defined
time periods (in months or years) to the holder of the NDA for a product that is, for example, the
first generic version of a drug to come to market, a drug used in the treatment of a rare disease or
condition, certain pediatric uses of approved drugs, and new qualified infectious disease products.
During the period of exclusivity, FDA does not grant marketing approval to another
manufacturer’s product.
Provision
This provision would add a new Section 505I to the FFDCA that would add six months to the
exclusivity period of an approved drug already on the market when FDA approves a supplemental
application for that drug for a new indication to prevent, diagnose, or treat a rare disease or
condition. The sponsor of a drug that receives the extended exclusivity under this provision
would be required to notify the Secretary “of any discontinuance of the production of the drug for
solely commercial reasons at least one year before such discontinuance.” The six-month
extension would not be available for a drug that had already received a six-month extension under
this provision.
Section 2152. Reauthorization of Rare Pediatric Disease Priority Review
Voucher Incentive Program
Background
The Food and Drug Administration Safety and Innovation Act (P.L. 112-144) added FFDCA
Section 529 to create a new program, funded by user fees, to provide a transferable voucher,
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under specified conditions, to a sponsor of an approved new drug or biological product for a rare
pediatric disease to be used for the priority review of another application. In addition, FDASIA
terminated the authority to award such vouchers one year after the Secretary awards the third
priority voucher and required the GAO, beginning on the date of the third voucher award, to
study and then report on the effectiveness of the voucher program in the development of products
that prevent or treat rare pediatric diseases. FDA awarded the third voucher in March 2015,
triggering the March 2016 sunset of this authority.
Provision
This provision would extend the authority to award such priority review vouchers until December
31, 2018. A new drug application or a biologics license application that was submitted to FDA
after the enactment of H.R. 6 and before December 31, 2018, would remain eligible to receive a
priority review voucher even if approval comes after December 31, 2018. It also would amend
the definition of “rare pediatric disease” by adding the words shown here in italics: “The disease
is a serious or life-threatening disease in which the serious or life-threatening manifestations
primarily affect individuals aged from birth to 18 years, including age groups often called
neonates, infants, children, and adolescents.” The provision would add to the list of
characteristics of a rare disease product application that the product not have received a tropical
disease priority review voucher.118
This provision would require that GAO study the voucher program and report to Congress on its
effectiveness as an incentive for developing drugs that treat or prevent rare pediatric diseases and
that would not otherwise have been developed.
Subtitle J—Domestic Manufacturing and Export Efficiencies
Section 2161. Grants for Studying the Process of Continuous Drug
Manufacturing
Background
In March 2015 congressional testimony, the then Commissioner of Food and Drugs spoke of new
manufacturing technologies that could eventually “lower costs, limit drug shortages, and reduce
supply chain vulnerabilities.”119 Continuous manufacturing, for example, could produce a drug in
a “continuous stream” rather than in a “series of sequential and discrete” operations. She noted
the need for “academic research in this area and expanding opportunities for collaboration,
possibly through public-private partnerships or consortia.”
Provision
The provision would authorize the Commissioner of Food and Drugs to “award grants to
institutions of higher education and nonprofit organizations for the purpose of studying and
recommending improvements to the process of continuous manufacturing of drugs and biological
118
FFDCA Section 524. Priority review to encourage treatments for tropical diseases.
Statement of Margaret A. Hamburg, M.D., Commissioner of Food and Drugs, Food and Drug Administration,
Department of Health and Human Services, before the Committee on Health, Education, Labor and Pensions, United
States Senate, March 10, 2015, http://www.fda.gov/newsevents/testimony/ucm437481.htm.
119
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products and similar innovative monitoring and control techniques.” To do so, it would authorize
$5 million to be appropriated for each of fiscal years FY2016 through FY2020.
Section 2162. Re-Exportation Among Members of the European Economic Area
Background
Section 1003(f) of the Controlled Substances Import and Export Act allows the Attorney General
to authorize “any controlled substance that is in schedule I or II, or is a narcotic drug in schedule
III or IV, to be exported from the United States to a country for subsequent export from that
country to another country” under certain conditions. One condition is that the controlled
substance is not exported from the second country.
Provision
The provision would amend Section 1003(f) of the Controlled Substances Import and Export Act
to modify the prohibition on exporting a controlled substance from a second country to allow
exporting from the second country to a member of the European Economic Area. It would allow
the continued re-exportation of the controlled substance among members of the European
Economic Area, provided certain conditions are met. This provision would require the person
who exported the controlled substance from the United States to provide documentation to the
Attorney General after each re-exportation. A new subsection (g) would prohibit the Attorney
General from promulgating or enforcing any regulation, guidance, or policy that impedes reexportation of controlled substances among European Economic Area countries.
Subtitle K—Enhancing Combination Products Review
Section 2181. Enhancing Combination Products Review
Background
FDA regulatory authority over medical product safety and effectiveness covers drugs, biological
products, and medical devices. The agency generally divides responsibilities for the review of
marketing applications in its product-centered offices. The Center for Drug Evaluation and
Research reviews new drug applications for approval, the Center for Biologics Evaluation and
Research reviews biologics license applications for licensure, and the Center for Devices and
Radiological Health reviews premarket approval applications for approval and 510(k)
notifications for clearance. In 2002, Congress directed FDA to establish an Office of Combination
Products to facilitate the timely review and regulation of drug-device, drug-biologic, and devicebiologic combination products.120
Provision
The provision would amend FFDCA Section 503(g)(4)(C) to require that the Secretary “issue
final guidance that describes the responsibilities of each agency center regarding its review of
combination products.”
120
Section 2014 of the Medical Device User Fee and Modernization Act of 2002 (MDUFMA, P.L. 107-250).
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Subtitle L—Priority Review for Breakthrough Devices
Background
FDA requires all medical device product manufacturers to register their facilities, list their
devices with the agency, and follow general controls requirements. FDA classifies devices
according to the risk they pose to the patient. Medical devices that present only minimal risk,
such as plastic bandages, can be legally marketed upon registration alone. These low-risk devices
are deemed exempt from premarket review, and manufacturers need not submit an application to
FDA prior to marketing. About two-thirds of medical devices listed with FDA are exempt from
premarket review; therefore, these devices would not have a need for “priority review.”
Most moderate- and high-risk devices must go through premarket review to obtain the agency’s
permission prior to marketing. FDA grants this permission when a manufacturer meets regulatory
premarket requirements and agrees to any necessary postmarket requirements, which vary
according to the risk that a device presents. In general, for moderate-risk and high-risk medical
devices, manufacturers can use two pathways to bring such devices to market with FDA’s
permission: (1) the PMA pathway and (2) the 510(k) pathway. There is a fundamental difference
between the PMA and 510(k) pathways. In a PMA review, FDA determines whether the device is
reasonably safe and effective for its intended use. In a 510(k) review, FDA determines whether
the device is substantially equivalent to another device whose safety and effectiveness may never
have been assessed.
The PMA pathway consists of conducting clinical studies, then submitting a premarket approval
(PMA) application with evidence providing reasonable assurance that the device is safe and
effective. The PMA process is generally used for novel and high-risk devices. It results in a type
of FDA permission called approval. The other pathway involves submitting a premarket
notification—also known as a 510(k), after the section in the FFDCA that authorized this type of
notification. Under the 510(k), the manufacturer demonstrates that the device is substantially
equivalent to a device already on the market (a predicate device) that does not require a PMA.
The 510(k) process is unique to medical devices and if successful results in FDA clearance.
Substantial equivalence is determined by comparing the performance characteristics of a new
device with those of a predicate device; clinical data demonstrating safety and effectiveness are
usually not required. Each year FDA typically evaluates about 40 PMA applications and more
than 4,000 510(k) notifications. In general, FDA has 90 days to review a 510(k) notification and
180 days to review a PMA application.
The time it takes to review a medical device—total review time—is composed of the time FDA
handles the application—FDA time—plus the amount of time the device sponsor or submitter
takes to respond to requests by FDA for additional information about the device. FDA reviewers
frequently need to ask for additional information—called an AI Letter—from the 510(k) device
sponsors due to the incomplete nature or poor quality of the original submission.121 For example,
during 2014, FDA reviewers needed to request additional information from the sponsors of 70%
of 510(k) submissions made to the agency.122 During 2014, FDA data indicate that 59% of PMA
applications had a major deficiency requiring additional information from the device sponsor.123
121
FDA/CDRH, Analysis of Premarket Review Times Under the 510(k) Program, July 2011, at http://www.fda.gov/
downloads/AboutFDA/CentersOffices/OfficeofMedicalProductsandTobacco/CDRH/CDRHReports/UCM263386.pdf.
122
See page 169 of 334 at http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/Overview/
MedicalDeviceUserFeeandModernizationActMDUFMA/UCM446492.pdf.
123
See page 11 of 334 at http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/Overview/
(continued...)
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Average time to review a 510(k) notification in 2014 was 115 total days—71 FDA days plus 45
submitter days.124 Average time to review a PMA application in 2014 was 242 total days—190
FDA days plus 51 submitter days.125
Section 2201. Priority Review for Breakthrough Devices
Background
Under FFDCA Section 515(d)(5), in order to provide for more effective treatment or diagnosis of
life-threatening or irreversibly debilitating human diseases or conditions, the Secretary shall
provide review priority for devices representing breakthrough technologies, for which no
approved alternatives exist, which offer significant advantages over existing approved
alternatives, or the availability of which is in the best interest of the patients.
On April 23, 2014, FDA issued the following draft guidance: Expedited Access for Premarket
Approval Medical Devices Intended for Unmet Medical Need for Life Threatening or Irreversibly
Debilitating Diseases or Conditions - Draft Guidance for Industry and Food and Drug
Administration Staff. As indicated in the title, the FDA draft guidance covered only PMA medical
devices. FDA issued final guidance on April 13, 2015.126
The focus of the guidance is on balancing risks versus benefits for the patient; drafting a Data
Development Plan by the medical device sponsor; and collecting postmarket data on a medical
device that has received a priority review designation. The expedited review process described in
the FDA guidance relies on the use of surrogate endpoints127 and the collection of postmarket data
on the medical device that has received a priority review designation in exchange for lower
requirements in the premarket review process, such as less information in the PMA application.
According to FDA, the “Expedited Access PMA,” or “EAP,” program features “earlier and more
interactive engagement with FDA staff—including the involvement of senior management and a
collaboratively developed plan for collecting the scientific and clinical data to support approval—
features that, taken together, should provide these patients with earlier access to safe and effective
medical devices.”128
(...continued)
MedicalDeviceUserFeeandModernizationActMDUFMA/UCM446492.pdf.
124
See page 171 of 334 at http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/Overview/
MedicalDeviceUserFeeandModernizationActMDUFMA/UCM446492.pdf.
125
See page 12 of 334 at http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/Overview/
MedicalDeviceUserFeeandModernizationActMDUFMA/UCM446492.pdf.
126
See http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/
UCM393978.pdf. Note that the final FDA Guidance added de novo 510(k) devices. A de novo 510(k), though requiring
more data than a traditional 510(k), often requires less information than a PMA application. According to the final
guidance, de novo devices “are not eligible for the full scope of the EAP program.”
127
The FDA guidance on pages 23-24 describes a surrogate endpoint as follows: “a surrogate endpoint is not itself a
measure of clinical benefit, but is used in trials as a substitute which is reasonably likely to predict clinical benefit,
based on epidemiologic, therapeutic, pathophysiologic or other scientific evidence. The types of measurements which
may be used as a surrogate endpoint are in vitro laboratory or medical imaging measurements, or physical signs (e.g.,
blood pressure measurements in trials of antihypertensive therapeutics, as a surrogate for clinical endpoints such as
stroke, myocardial infarction, or mortality).”
128
See http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm394294.htm.
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FDA intends to withdraw approval for a device if the sponsor fails to adhere to the postmarket
requirements, such as data collection, or if the postmarket data proves the device is not safe and
effective:
As part of the EAP program, FDA intends to impose postmarket requirements, including
requiring post-approval studies as a condition of approval for devices subject to a PMA
when applicable.129 The extent to which FDA will accept certain data to be collected for
an EAP Device in the postmarket setting, rather than premarket, is affected by the
Agency’s current authority to mandate completion of post-approval studies and to
withdraw PMA approval for marketed devices for which FDA later determines that there
is a lack of a showing of reasonable assurance that the device is safe or effective under
the conditions of use prescribed, as well as by the current capabilities of FDA’s medical
device surveillance system.130
Comments on the April 2014 FDA draft guidance questioned FDA’s ability to enforce postmarket
study requirements and urged the agency and Congress “to evaluate whether FDA has sufficient
authorities to promptly withdraw product approval if the necessary data are not promptly
collected or suggest that the product benefits do not outweigh risks.”131 One media source stated
that, regarding the EAP program, FDA “estimates that, at least in the early stages, on average,
about six devices a year may qualify for the program, and the [agency] believes it has the
resources available to handle that volume.”132 The estimated six devices would represent about
15% of FDA’s total PMA applications in one year. Other comments on the FDA draft guidance
questioned whether FDA has sufficient resources to dedicate to the EAP program.133
Provision
The provision would add a new Section 515B, “Priority Review for Breakthrough Devices,” to
Chapter V of the FFDCA. It would “establish a program to provide priority review for devices”
representing breakthrough technologies for which no approved alternatives exist, offer significant
advantages over existing approved or cleared alternatives, or the availability of which is in the
best interest of patients. The provision would allow requests from device sponsors for priority
review of not only PMA medical devices, but also 510(k) devices and one other type of
129
21 CFR 814.82 states: “FDA may impose post-approval requirements in a PMA approval order or by regulation at
the time of approval of the PMA or by regulation subsequent to approval.” In addition, under Section 522 of the FD&C
Act and FDA’s implementing regulations at 21 CFR Part 822, FDA may order postmarket surveillance for certain Class
III devices.
130
FDA, Expedited Access for Premarket Approval and De Novo Medical Devices Intended for Unmet Medical Need
for Life Threatening or Irreversibly Debilitating Diseases or Conditions, Guidance for Industry and Food and Drug
Administration Staff, April 13, 2015, pp. 8-9, http://www.fda.gov/downloads/MedicalDevices/
DeviceRegulationandGuidance/GuidanceDocuments/UCM393978.pdf.
Regarding de novo 510(k) devices, the final FDA Guidance on page 9 also stated the following: “FDA would not offer
a greater ability to collect postmarket benefit-risk data otherwise typically collected premarket for a de novo request (as
we may for a PMA device) because once a de novo request is granted, the product can serve as a predicate for a device
that need only demonstrate substantial equivalence for a 510(k) clearance. This would be problematic if we granted a
de novo for a device that subsequently was shown not to be safe or effective based on required postmarket data
collection.”
131
See http://www.pewtrusts.org/en/about/news-room/news/2014/07/22/pew-comments-to-fda.
132
David Filmore, “Leap ahead with EAP? FDA proposes new expedited PMA pathway,” The Gray Sheet, vol. 40, no.
17 (April 28, 2014), pp. 1, 5-6.
133
See http://center4research.org/public-policy/testimony-briefings-statements/comments-on-expedited-access-forpremarket-approval-medical-devices/.
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regulatory decision involving a medical device.134 Under the provision, the Secretary would have
60 days to determine whether the request for priority review would be granted. Such requests
would be evaluated by a team of experienced FDA staff and managers, chaired by a senior
manager. All determinations—either approval or denial of priority review—would require a
“substantive summary of the scientific and regulatory rationale” as a “significant decision” under
FFDCA Section 517A. The provision would allow a denial of priority review to be reconsidered
if a request for reconsideration is made within 30 days of the denial and other specified criteria
are met. If a priority review designation for a device is approved by the Secretary, such
designation would not be able to be withdrawn by the Secretary because of the subsequent
clearance or approval of another “breakthrough” device and therefore specified criteria (i.e., no
approved alternatives exist, offer significant advantages over existing approved or cleared
alternatives, or the availability of which is in the best interest of patients) are no longer met.
Under the provision, each priority review device would be assigned a team of staff “including a
team leader with appropriate subject matter expertise and experience.” Oversight of each team
would be provided by senior FDA personnel to facilitate the efficient development of the device
and the efficient device review. Among other things, FDA would “provide for interactive
communication with the device sponsor during the review process,” expedite “review of
manufacturing and quality systems compliance,” and “disclose to the sponsor in advance the
topics of any consultation concerning the sponsor’s device that [FDA] intends to undertake with
external experts or an advisory committee and provide the sponsor an opportunity to recommend
such external experts.”
FDA would, as appropriate, “coordinate with the sponsor regarding early agreement on a data
development plan”; ensure that clinical trial design is as efficient as practicable “through the
adoption of shorter or smaller clinical trials, application of surrogate endpoints, and use of
adaptive trial designs”; and facilitate “expedited and efficient development and review of the
device through utilization of timely postmarket data collection” with regard to PMA applications.
FDA would be required to issue guidance on the implementation of the new Section 515B of the
FFDCA.
Subtitle M—Medical Device Regulatory Process Improvements
Section 2221. Third-Party Quality System Assessment
Background
Medical device manufacturers must produce their devices in accordance with Good
Manufacturing Practice (GMP) requirements, which are described in the Quality System
Regulation (QSR).135 The QSRs require that manufacturers have a quality system for the design,
manufacture, packaging, labeling, storage, installation, and servicing of non-exempt finished
medical devices intended for commercial distribution in the United States. The regulation
requires that various specifications and controls be established for devices; that devices be
designed and manufactured under a quality system to meet these specifications; that finished
devices meet these specifications; that devices be correctly installed, checked, and serviced; that
134
A petition for classification under Section 513(f)(2) of the FFDCA.
FFDCA §520(f); 21 CFR 820. See also FDA, Medical Devices, Quality System (QS) Regulation/Medical Device
Good Manufacturing Practices, http://www.fda.gov/medicaldevices/deviceregulationandguidance/
postmarketrequirements/qualitysystemsregulations/.
135
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quality data is analyzed to identify and correct quality problems; and that complaints are
processed. Though FDA has identified in QSR the essential elements that a quality system should
have, manufacturers have a great deal of leeway to design quality systems that best cover nuances
of their devices and the means of producing them.
FDA monitors device problem data and inspects the operations and records of device developers
and manufacturers to determine compliance with the GMP/QSR requirements. Establishment
inspections may be conducted by accredited persons (third parties). For currently marketed
devices, a manufacturer is required to notify or submit information to FDA when changes to the
design or technical characteristics of a device may affect the performance characteristics of the
device. Submission of information to FDA would also be required if a manufacturer seeks to use
a device for a new indication, such as to treat a new disease or condition, or a new population,
such as pediatric use. Examples of such submissions include a 30-day notice, used by a
manufacturer to request modifications in manufacturing procedures or methods of manufacture
affecting the safety and effectiveness of a device, and a PMA Supplement, required when a
manufacturer requests approval of a change in aspects of an approved device, such as its design,
specifications, or labeling. FDA collects a user fee from a manufacturer that files such a
submission requesting agency review of a change in the design or performance of a device.
Provision
The provision would add to the FFDCA a new Section 524B, “Third-Party Quality System
Assessment.” The Secretary would be required to establish a third-party quality system
assessment program to accredit persons to assess a manufacturer’s quality system and ensure the
safety and effectiveness of certain specified changes made to an in-scope device. In-scope device
is defined as “a device within the scope of devices agreed to by the requestor [manufacturer] and
the accredited person for purposes of a request for certification.” Under the provision, the
manufacturer has the option to select an accredited person who would be required to assess and, if
applicable, certify that a device maker’s quality system meets criteria to be issued by the
Secretary in a guidance document. The Secretary would be required to rely on such certifications
to determine the safety and effectiveness, or substantial equivalence, of device-related changes
made to in-scope devices. Certification would be in lieu of compliance with certain specified
FDA submission requirements: a 30-day notice;136 a Special PMA supplement;137 and certain
device-related changes that require a 510(k) premarket notification but do not alter the intended
use of the changed device or the fundamental technology of such device.
Under the provision, the process and qualifications for accreditation of persons and accreditation
renewal currently in place would be required to apply to the new FFDCA Section 524A.138
Initiation of assessment services would not begin until after the Secretary issues final guidance.
Compensation for accredited persons would be determined by agreement between the accredited
person and the requestor and paid by the requestor. The requestor would be required to select an
accredited person from a list published by the Secretary.139
The provision would require the Secretary to issue draft guidance on the criteria for certification
of a quality system not later than 12 months after enactment, and final guidance not later than 12
136
A 30-day notice is defined in FFDCA Section 515(d)(6).
A Special PMA supplement is described in 21 CFR §814.39(d).
138
FFDCA Section 704(g).
139
FFDCA Section 704(g)(4).
137
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months after draft guidance is issued. The guidance would be required to contain evaluative
criteria to be used by an accredited person to assess and, as applicable, certify a manufacturer’s
quality system with respect to in-scope devices, as well as criteria for accredited persons to waive
or exempt the certification criteria. An assessment summary would be required to be submitted to
the Secretary within 30 days of the assessment and would include, as applicable, certification that
the requestor has satisfied the Secretary’s guidance criteria for quality system certification for the
in-scope device and any waivers or exemptions applied by the accredited person.
Under the provision, the Secretary would have 30 days to review the assessment summary. The
summary would be required to be deemed accepted by the Secretary on the 30th day unless the
Secretary, by written notice to the accredited person, deems the certification to be provisional
beyond the 30-day period, suspended pending further review by the Secretary, or otherwise
qualified or cancelled. If after, for example, further information is submitted to support the
certification and the Secretary determines that the certification is acceptable, the accredited
person would be notified in writing. Certification would remain in effect for two years and may
be renewed. Certification would be revoked by written notification to the manufacturer if the
Secretary determines the quality system no longer meets the certification criteria with respect to
in-scope devices as specified by the Secretary in final guidance. In this case, the manufacturer
would be required to comply with any necessary submission requirements (e.g., 30-day notice,
Special PMA supplement, 510(k) premarket notification) for any device-related changes. The
manufacturer would be eligible to seek recertification of its quality system.
Manufacturers who have received certification under this new Section 524B—and have made
device-related changes to in-scope devices, without prior submission of a 510(k) notification—
would be required to ensure that an annual summary report is submitted to the Secretary by the
accredited person. The report would describe the changes made to the in-scope device and the
effective dates of such changes. Manufacturers who have received certification under this new
Section 524B—and have made device-related changes to in-scope devices, without prior
submission of a 30-day notice or Special PMA Supplement—would be required to notify the
Secretary of such changes in the manufacturer’s next periodic report.140 The report would
describe the changes made to the in-scope device and the effective dates of such changes. All
these reports would be required to be used by the Secretary for an evaluation of the third-party
quality system assessment program to be completed by January 31, 2021. Within one year of
completing this evaluation, the Secretary would be required to issue on FDA’s website a report of
the evaluation’s findings including recommendations on continuation or expansion of the
program. Section 524B would sunset on October 1, 2022.
Section 2222. Valid Scientific Evidence
Background
Evidence submitted to FDA, in a PMA or a 510(k) notification, regarding the use of a medical
device in the treatment or diagnosis of disease is obtained from clinical trials, which are research
studies involving patients. The design of research studies affects the strength of their evidence,
and ranges from what is often referred to as the gold standard—the randomized controlled clinical
trial—to case reports or case histories, which are observational studies of one or more patients.
“Observational studies are often considered inferior to randomized trials as, in some cases, they
140
21 CFR §814.84(b).
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have been shown to overestimate treatment effects.”141 In a randomized controlled clinical trial,
patients are randomly assigned to two or more groups. One group receives the intervention (such
as a new treatment), while the control group receives current therapy or placebo. Randomization
ensures that any patient characteristics that might affect the outcome will be roughly equal across
each group in the study. Any difference in outcomes between the groups is then due to the
intervention.
Under FFDCA Section 513, the effectiveness of a device is to be determined on the basis of wellcontrolled investigations, including one or more clinical investigations where appropriate.
However, an exception is allowed if the Secretary determines that “valid scientific evidence”
exists, other than a well-controlled clinical trial that is sufficient to determine the effectiveness of
a device.
Provision
The provision would amend FFDCA Section 513(a)(3)(B) and would include as “valid scientific
evidence ... evidence described in well-documented case histories, including registry data, that are
collected and monitored under an acceptable protocol; studies published in peer-reviewed
journals; and, data collected in countries outside the United States.” The Secretary would be
allowed to request the underlying data for a study published in a peer-reviewed journal if that
would be the least burdensome means, to the manufacturer, of evaluating device effectiveness or
substantial equivalence. The Secretary would need to furnish a written rationale for requesting the
underlying data, and if the data are unavailable, the study would be considered “to be a part of the
totality of the evidence with respect to the device, as the Secretary determines appropriate.”
Section 2223. Training and Oversight in Least Burdensome Appropriate
Means Concept
Background
Section 205 of the Food and Drug Administration Modernization Act of 1997 (FDAMA, P.L.
105-115) amended Section 513 of the FFDCA, adding two provisions commonly referred to as
the “Least Burdensome Provisions.” The two provisions stipulate that FDA consider the “least
burdensome” data or information “necessary” to demonstrate a reasonable assurance of device
effectiveness in a PMA application or substantial equivalence to predicate devices with differing
technological characteristics in certain 510(k) notifications. Here are the two provisions:
Section 513(a)(3)(D)(ii) Any clinical data, including one or more well-controlled
investigations, specified in writing by the Secretary for demonstrating a reasonable
assurance of device effectiveness shall be specified as a result of a determination by the
Secretary that such data are necessary to establish device effectiveness. The Secretary
shall consider, in consultation with the applicant, the least burdensome appropriate means
of evaluating device effectiveness that would have a reasonable likelihood of resulting in
approval.
Section 513(i)(1)(D) Whenever the Secretary requests information to demonstrate that
devices with differing technological characteristics are substantially equivalent, the
Secretary shall only request information that is necessary to making substantial
equivalence determinations. In making such requests, the Secretary shall consider the
141
Ravi Thadhani, “Chapter 14: Formal trials versus observational studies,” in Fabry Disease: Perspectives from 5
Years of FOS, ed. A. Mehta, M. Beck, G. Sunder-Plassmann (Oxford: Oxford PharmaGenesis, 2006).
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least burdensome means of demonstrating substantial equivalence and request
information accordingly.
FDA published final guidance on the least burdensome provisions on October 4, 2002.142 The
agency has posted on its website activities related to implementation of the least burdensome
provision, including training for staff and advisory panels.143
Provision
The provision would amend FFDCA Section 513 by adding a new subsection (j), “Training and
Oversight in Least Burdensome Appropriate Means Concept.” Each FDA employee involved in
the review of PMA applications or 510(k) notifications, including supervisors, would be required
to receive training on the “meaning and implementation of the least burdensome appropriate
means concept.” The Secretary would be required to issue draft guidance, no later than 12 months
after enactment, updating the October 4, 2002, final guidance on the least burdensome provisions.
In developing the draft guidance, the Secretary would be required to hold a meeting of
stakeholders “to ensure a full record to support the publication of such document.” Under the
provision, 18 months after the draft guidance is issued, the FDA ombudsman responsible for
device premarket review would be required to conduct an audit of the least burdensome training,
including “interviews with a representative sample of persons from industry regarding their
experience in the device premarket review process.”
Regarding PMA applications, the provision would amend FFDCA Section 515(c), adding a new
paragraph that would require the Secretary to “consider the least burdensome appropriate means
necessary to demonstrate device safety and effectiveness, and request information accordingly.”
The provision defines the term necessary to mean “the minimum required information that would
support a determination by the Secretary that an application provides a reasonable assurance of
the safety and effectiveness of the device.”
Section 2224. Recognition of Standards
Background
Under the Medical Device Amendments of 1976 (MDA, P.L. 94-295), FDA was required to
classify all medical devices into one of three classes. Congress provided definitions for the three
classes—Class I, Class II, Class III—based on the risk (low-, moderate-, and high-risk,
respectively) posed by the device to patients.144 Device classification determines the type of
regulatory requirements that a manufacturer must follow. General controls are the minimum
regulations that apply to all FDA-regulated medical devices.145
142
FDA, The Least Burdensome Provisions of the FDA Modernization Act of 1997: Concept and Principles; Final
Guidance for FDA and Industry, October 4, 2002, http://www.fda.gov/RegulatoryInformation/Guidances/
ucm085994.htm.
143
FDA, Medical Devices, The Least Burdensome Provisions - Activities Related to Implementation,
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/Overview/
MedicalDeviceProvisionsofFDAModernizationAct/ucm136685.htm#7.
144
FFDCA §513(a)(1); see also 21 CFR §860.3(c). The agency has developed classifications for over 1,700 distinct
types of devices and grouped them into 16 classification panels, such as “cardiovascular devices” or “ear, nose, and
throat devices.” FDA, Medical Devices, Classify Your Medical Device, December 3, 2012, http://www.fda.gov/
MedicalDevices/DeviceRegulationandGuidance/Overview/ClassifyYourDevice/default.htm.
145
General controls include five elements: (1) establishment registration—such as manufacturers, distributors,
(continued...)
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Class II devices are those under current law “which cannot be classified as Class I because the
general controls by themselves are insufficient to provide reasonable assurance of safety and
effectiveness of the device.”146 Although Class II includes devices that pose a moderate risk to
patients, only some have information or special controls available to reduce or mitigate risk.
Special controls include special labeling requirements, premarket data requirements, postmarket
surveillance, patient registries, guidelines, and performance standards.147 Only about “15% of all
device types classified in Class II are subject to special controls.”148 According to a 2011 report
by the Institute of Medicine, this is because “FDA has not promulgated performance standards or
special controls for the vast majority of types of Class II devices.”149 Although “FDA has
procedures for developing, adopting, and implementing guidance and standards,” it has been
“persistently hindered in fully developing those materials by a lack of or limitations on human,
fiscal, and technologic resources and capabilities.”150 According to a 1988 Government
Accountability Office (GAO) report, FDA estimated that “40 staff-years (not staff-hours) would
be required to develop a single performance standard.”151
In response to agency problems with developing performance standards, the Safe Medical
Devices Act of 1990 (P.L. 101-629) simplified the process of establishing performance standards
for Class II devices and authorized the use of alternative restrictions, called special controls, at
the agency’s discretion. The Food and Drug Administration Modernization Act of 1997; (P.L.
105-115) allowed FDA to recognize an appropriate performance standard developed by a U.S. or
international organization involved in standard development.152
Provision
The provision would amend FFDCA Section 514(c) by adding two new subparagraphs and two
new paragraphs. Under the provision, any person would be able to submit to FDA a request for
the agency to recognize “all or part of an appropriate standard established by a nationally or
internationally recognized standard organization.” The Secretary would be required to make a
determination to recognize all, part, or none of the standard within 60 days, with a written
response indicating the rationale for such a determination, “including the scientific, technical,
regulatory, or other basis for such determination.” The response and rationale for recognition
would be required to be made publically available.
(...continued)
repackagers and relabelers, and foreign firms; (2) device listing—listing with FDA of all devices to be marketed; (3)
good manufacturing practices (GMP)—manufacturing of devices in accordance with the Quality Systems Regulation
(QSR); (4) labeling—labeling of devices or in vitro diagnostic products; and (5) premarket notification—submission to
FDA of a premarket notification 510(k).
146
FFDCA §513(a)(1)(B).
147
See FDA, General and Special Controls, last updated on June 26, 2014, http://www.fda.gov/MedicalDevices/
DeviceRegulationandGuidance/Overview/GeneralandSpecialControls/default.htm#special.
148
Institute of Medicine, Medical Devices and the Public’s Health: The FDA 510(k) Clearance Process at 35 Years,
Washington, DC, July 2011, p. 40.
149
Ibid., p. 3.
150
Ibid., p. 5.
151
Ibid., p. 184; and GAO, Medical Devices: FDA’s 510(k) operations could be improved. Report to the chairman,
Subcommittee on Health and the Environment, Committee on Energy and Commerce, House of Representatives
(PEMD-88-14), p. 4.
152
FFDCA §514(c)(1)(A).
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Under the provision, the Secretary would be required to provide to all FDA employees who
review premarket submissions for devices “periodic training on the concept and use of recognized
standards for purposes of meeting a premarket submission requirement or other applicable
requirement.” The provision would require the Secretary to publish draft guidance, identifying the
principles for recognizing standards, not later than 12 months after enactment, and final guidance
not later than 12 months after the public comment period has ended on the draft guidance.
Section 2225. Easing Regulatory Burden with Respect to Certain Class I and
Class II Devices
Background
Under the Medical Device Amendments of 1976 (MDA), the manufacturer of a new product
would submit a notice to the FDA 90 days prior to marketing. This type of premarket review is
known as a 510(k) notification, after the section of the MDA requiring that FDA be notified of the
new product before it is marketed. The Food and Drug Administration Modernization Act of 1997
(P.L. 105-115) eliminated the requirement of a 510(k) submission for most Class I devices and a
small proportion of Class II device types. A 2009 GAO study found that 67% of device types
were exempt from premarket review—Class I devices made up 95% and Class II devices made
up 5% of these exempt devices.153
On July 1, 2015, FDA released guidance that exempts 120 types of medical devices from
premarket notification requirements; draft guidance was issued on August 1, 2014.154 The 120
devices are primarily Class II but also include a few Class I devices and some pre-amendment
(pre-MDA) unclassified devices. The guidance states that until “publication of a final rule or
order exempting these devices from 510(k), FDA does not intend to enforce compliance with
510(k) requirements for these devices. FDA does not expect manufacturers to submit 510(k)s for
these devices during this time period.”155
Provision
The provision would amend FFDCA Section 510(l) and would require the Secretary, within 120
days of enactment, to identify and publish in the Federal Register “any type of class I device that
the Secretary determines no longer requires a report under subsection (k) to provide reasonable
assurance of safety and effectiveness.” Upon publication, each type of Class I device so identified
would be exempt from the 510(k) requirement and the “classification regulation applicable to
each such type of device” would be deemed amended to incorporate the exemption.
Similarly, the provision would amend FFDCA Section 510(m) and would require the Secretary,
within 60 days of enactment, to publish in the Federal Register “a list of each type of class II
device that the Secretary determines no longer requires a report under subsection (k) to provide
reasonable assurance of safety and effectiveness.” The Secretary would be required to provide a
60-day public comment period after publication of such a list.
153
U.S. Government Accountability Office, Medical Devices: FDA Should Take Steps to Ensure That High-Risk
Device Types Are Approved through the Most Stringent Premarket Review Process, GAO-09-190, January 2009, p. 9,
http://www.gao.gov/assets/290/284882.pdf.
154
FDA Center for Devices and Radiological Health, Intent to Exempt Certain Unclassified, Class II, and Class I
Reserved Medical Devices from Premarket Notification Requirements, Guidance for Industry and FDA Staff, July 1,
2015, http://www.fda.gov/ucm/groups/fdagov-public/@fdagov-meddev-gen/documents/document/ucm407292.pdf.
155
Ibid., p. 4-5.
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Not later than 180 days after enactment, the Secretary would be required to publish in the Federal
Register a list representing the final determination on the types of Class II devices that no longer
would require a 510(k) notice prior to marketing. Upon publication of the final list, each type of
Class II device so listed would be exempt from the 510(k) requirement and the “classification
regulation applicable to each such type of device” would be deemed amended to incorporate the
exemption.
Section 2226. Advisory Committee Process
Background
FDA advisory committees “provide independent expert advice to the agency on a range of
complex scientific, technical, and policy issues. An advisory committee meeting also provides a
forum for a public hearing on important matters. Although advisory committees provide
recommendations to FDA, FDA makes the final decisions.”156
In April 2015, FDA issued draft guidance entitled “Procedures for Meetings of the Medical
Devices Advisory Committee.”157 Once final, the draft guidance will replace two earlier FDA
guidance documents.158 The draft guidance provides information on the processes associated with
Medical Devices Advisory Committee panel meetings, such as types of panel meetings,
information exchange for panel meetings, and conduct of panel meetings.159 The Medical Devices
Advisory Committee includes 17 different advisory panels, which address topics in various
specialty areas.160 FDA may refer a matter to a particular device panel for advice on a premarket
submission if the submission is, for example, of significant public interest or is highly
controversial. The agency may also ask a panel to provide advice on regulatory actions, such as
device classification, or general scientific matters “that are related to a device type or a general
topic that is relevant to medical device safety and effectiveness.”161 Under current law, the
advisory panels are composed of
persons who are qualified by training and experience to evaluate the safety and
effectiveness of the devices to be referred to the panel and who, to the extent feasible,
possess skill in the use of, or experience in the development, manufacture, or utilization
of, such devices. The Secretary shall make appointments to each panel so that each panel
shall consist of members with adequately diversified expertise in such fields as clinical
156
FDA, Guidance for the Public and FDA Staff on Convening Advisory Committee Meetings, Draft Guidance, August
2008, http://www.fda.gov/downloads/RegulatoryInformation/Guidances/UCM125651.pdf.
157
FDA, Procedures for Meetings of the Medical Devices Advisory Committee, April 1, 2015, http://www.fda.gov/
downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM440348.pdf.
158
The two documents are Guidance on Amended Procedures for Advisory Panel Meetings, http://www.fda.gov/
MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/ucm073722.htm; and, Panel Review of
Premarket Approval Applications #P91-2 (blue book memo), http://www.fda.gov/MedicalDevices/
DeviceRegulationandGuidance/GuidanceDocuments/ucm081363.htm.
159
The draft guidance does not cover meetings of the Medical Device Dispute Resolution Panel.
160
The advisory panels are (1) Anesthesiology and Respiratory Therapy Devices; (2) Circulatory System Devices; (3)
Clinical Chemistry and Clinical Toxicology Devices; (4) Dental Products; (5) Ear, Nose, and Throat Devices; (6)
Gastroenterology and Urology Devices; (7) General and Plastic Surgery Devices; (8) General Hospital and Personal
Use Devices; (9) Hematology and Pathology Devices; (10) Immunology Devices; (11) Microbiology Devices; (12)
Molecular and Clinical Genetics; (13) Neurological Devices; (14) Obstetrics and Gynecology Devices; (15)
Ophthalmic Devices; (16) Orthopedic and Rehabilitation Devices; and (17) Radiological Devices.
161
FDA, Procedures for Meetings of the Medical Devices Advisory Committee, April 1, 2015, p. 3, http://www.fda.gov/
downloads/MedicalDevices/DeviceRegulationandGuidance/GuidanceDocuments/UCM440348.pdf.
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and administrative medicine, engineering, biological and physical sciences, and other
related professions. In addition, each panel shall include as nonvoting members a
representative of consumer interests and a representative of interests of the device
manufacturing industry. Scientific, trade, and consumer organizations shall be afforded
an opportunity to nominate individuals for appointment to the panels. 162
Provision
The provision would amend FFDCA Section 513(b)(5) by adding two new subparagraphs that
would require the Secretary to ensure that there is “adequate expertise” on a device classification
panel including by giving “due consideration to the recommendations” of the device
manufacturer “on the expertise needed among the voting members of the panel,” among other
things. The Secretary would be required to ensure this when “a device is specifically the subject
of review by a classification panel.” The provision would define “adequate expertise” to mean
that the classification panel reviewing a premarket submission would include “two or more voting
members, with a specialty or other expertise clinically relevant to the device under review, and at
least one voting member who is knowledgeable about the technology of the device.”
The provision would amend FFDCA Section 513(b)(6) regarding the panel review process and
participation in the panel meeting, adding that the device manufacturer, or its representative,
would be allowed time during a panel meeting to correct misstatements of fact or provide
clarifying information, subject to the discretion of the panel chairperson.
The provision would strike subparagraph (B) in FFDCA Section 513(b)(6) and replace it with a
similar subparagraph, delineating that adequate time for presentations would be required to be
provided to the device manufacturer and the Secretary, and would add that the panel would be
allowed to pose questions to the representative of the manufacturer and consider the responses in
the panel’s review of the device.
Section 2227. Humanitarian Device Exemption Application
Background
The Humanitarian Device Exemption (HDE) was intended to encourage the development of
devices that aid in the treatment and diagnosis of diseases or conditions that affect fewer than
4,000 individuals in the United States per year.163 An HDE application is similar to a PMA but is
exempt from the effectiveness requirements to encourage manufacturers to develop devices for
these small markets.
Provision
The provision would amend FFDCA Section 520(m) and would allow an HDE to be granted to
treat and diagnose diseases or conditions that affect not more than 8,000 individuals in the United
States. Within 18 months of enactment, the Secretary, acting through the Commissioner of the
FDA, would be required to publish draft guidance that “defines the criteria for establishing
‘probable benefit’” when evaluating whether the health benefit of an HDE device outweighs the
risk of injury or illness from using such a device.
162
163
FFDCA Section 513(b)(2).
The Humanitarian Device Exemption was authorized by the Safe Medical Devices Act of 1990 (P.L. 101-629).
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Section 2228. CLIA Waiver Study Design Guidance for In Vitro Diagnostics
Background
The Clinical Laboratory Improvement Amendments (CLIA) of 1988 provide CMS with authority
to regulate clinical laboratories to ensure the accuracy of test results, given that these results drive
clinical decisionmaking.164 CLIA requires laboratories to receive certification before they are
allowed to carry out clinical laboratory testing on a human sample. CLIA certification is based on
the level of complexity of testing that a laboratory is performing, graded as low, moderate, or
high. FDA is responsible for categorizing clinical laboratory tests according to their level of
complexity.165 Laboratories that perform only low-complexity tests (called waived tests) receive a
certificate of waiver (COW) from CMS. Conversely, only laboratories certified to do so may
perform moderate- and high-complexity tests.
FDA determines whether a test is waived (i.e., low-complexity) or not based on information
submitted about the test by the manufacturer, and has issued guidance to support the
manufacturer’s submission of this information.166 Under current law, waived tests are those “that
have been approved by FDA for home use or that, as determined by the Secretary, are simple
laboratory examinations and procedures that have an insignificant risk of an erroneous result.”167
The guidance recommends approaches for demonstrating that a test is both “simple” and has “an
insignificant risk of an erroneous result.” Demonstrating the latter includes showing that a test’s
accuracy is comparable to a method whose accuracy has already been established and
documented. (Section V of the guidance document addresses approaches to demonstrating
accuracy.)
Provision
The provision would require the Secretary, not later than 12 months after enactment, to publish
draft guidance that revises Section V of the current guidance, including providing guidance on the
appropriate use of comparable performance between a waived user and a moderately complex
laboratory user to demonstrate accuracy. Not later than 12 months after the comment period
closes for the draft guidance, the Secretary would be required to publish final revised guidance.
Subtitle N—Sensible Oversight for Technology Which Advances
Regulatory Efficiency
Background
The Food and Drug Administration Safety and Innovation Act directed FDA, the Federal
Communications Commission (FCC), and the Office of the National Coordinator for Health
Information Technology (ONC) to recommend a “risk-based regulatory framework pertaining to
164
PHSA §353; 42 U.S.C. §263a.
See FDA, “CLIA Categorizations,” http://www.fda.gov/medicaldevices/deviceregulationandguidance/
ivdregulatoryassistance/ucm393229.htm.
166
FDA, “Guidance for Industry and FDA Staff: Recommendations for Clinical Laboratory Improvement Amendments
of 1988 (CLIA) Waiver Applications for Manufacturers of In Vitro Diagnostic Devices,” Center for Devices and
Radiological Health, January 30, 2008, http://www.fda.gov/downloads/MedicalDevices/
DeviceRegulationandGuidance/GuidanceDocuments/ucm070890.pdf.
167
PHSA §353(d)(3), “Requirements for Certificate of Waiver”; 42 U.S.C. §263a(d)(3).
165
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health information technology, including mobile medical applications, that promotes innovation,
protects patient safety, and avoids regulatory duplication.”168 The recommendations, published in
an April 2014 report, proposed separating products into three categories: (1) products that
perform administrative functions, such as billing and practice-management software; (2) products
that perform health management functions, such as medication management and most clinical
decision support; and (3) products that perform medical device functions, such as disease
detection and diagnosis software, and applications that control the operation of other devices.169
The report recommended limiting FDA oversight to products in the third category.
In a separate action, FDA in February 2015 released updated guidance on a risk-based approach
to regulating mobile medical applications.170 First, the agency provided examples of mobile
applications that do not meet the statutory definition of a medical device and so are not subject to
its regulatory authority. They include applications used to automate general office operations, and
applications intended for general patient education. Second, FDA gave examples of mobile
applications that may meet the definition of a medical device but for which the agency intends to
exercise enforcement discretion—meaning that it does not intend to enforce the FFDCA’s
requirements—because the applications pose a lower risk to the public. This category includes
clinical decision support software and applications that use patient characteristics to provide
patient-specific screening and counseling recommendations.
Finally, FDA provided examples of mobile applications that are the focus of the agency’s
regulatory oversight. These applications meet the definition of a medical device, and they pose a
risk to patient safety if they do not function as intended. Examples include applications that
connect to an existing device to control its operation, function, or energy source, and applications
used in active patient monitoring or analyzing patient-specific medical data from a connected
device.
Section 2241. Health Software
Provision
The provision would amend Section 201 of the FFDCA (“Definitions”) to define “health
software” as software that is intended for use (1) in administrative or operational support or the
processing and maintenance of financial records; (2) in workflow and related recordkeeping; (3)
in the transfer, aggregation, conversion, storage, management, or transmission of data—provided
the software is not used in active patient monitoring or in controlling the functions of a device to
which it is connected; (4) to organize and present health and wellness information; and (5) to
analyze information and provide recommended options, both general and patient-specific, for the
prevention, diagnosis, treatment, cure, or mitigation of a particular disease or condition (i.e.,
clinical decision support).
Health software does not include software that (1) through use of an in vitro diagnostic device,
acquires, processes, or analyzes an image or physiological signal; (2) is intended for use with, or
to support, supplement, or augment, one or more parent devices; (3) is an integral part of a device
168
P.L. 112-144, §618, July 9, 2012.
Food and Drug Administration, FDASIA Health IT Report, Proposed Strategy and Recommendations for a RiskBased Framework, April 2014, http://www.fda.gov/downloads/AboutFDA/CentersOffices/
OfficeofMedicalProductsandTobacco/CDRH/CDRHReports/UCM391521.pdf.
170
Food and Drug Administration, Mobile Medical Applications: Guidance for Industry and Food and Drug
Administration Staff, February 9, 2015, http://www.fda.gov/downloads/MedicalDevices/UCM263366.pdf.
169
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necessary to support the use of a device; or (4) is used in the manufacture and transfusion of
blood products.
Section 2242. Applicability and Inapplicability of Regulation
Provision
The provision would add a new Section 524B of the FFDCA (“Health Software”) to prohibit FDA
from regulating health software. The prohibition would not apply to health software that provides
patient-specific clinical decision support and that poses a significant risk to patient safety, based
on a determination of the Secretary made according to certain specified criteria.
The Secretary would be required to review existing health software regulations and guidance, and
would have the authority to implement a new regulatory framework by modifying existing
regulations and guidance or by issuing new regulations or guidance. The Secretary would be
permitted to take such actions by administrative order published in the Federal Register
following publication of a proposed order. The Secretary would be required to consult with
stakeholders before issuing regulations, an administrative order, or guidance.
Section 2243. Exclusion from Definition of Device
Provision
The provision would amend the definition of “device” in Section 201(h) of the FFDCA
(“Definitions”) to exclude health software, other than software that provides patient-specific
clinical decision support and that poses a significant risk to patient safety.
Subtitle O—Streamlining Clinical Trials
Background
The HHS Human Subject Regulations are a core set of federal standards for protecting human
subjects in HHS-sponsored research.171 These regulations are commonly referred to as the
Common Rule because the same requirements have been adopted by many other federal
departments and agencies, who are to apply the regulations to the research they fund. Under the
Common Rule, research protocols must be approved by an Institutional Review Board (IRB) to
ensure that the rights and welfare of the research subjects are protected.172 The rule lists several
criteria for IRB approval, including the requirement that researchers obtain the informed consent
of their research subjects.173 In addition, it sets out the types of information that must be provided
to prospective research subjects during the informed consent process, including an explanation of
the purpose of the research, a description of the research procedures, and a description of the risks
and benefits of the research.174 An IRB may decide to waive the informed consent requirement if
it determines that (1) the research poses no more than minimal risk to the subjects, (2) the waiver
171
45 C.F.R. Part 46, Subpart A.
45 C.F.R. §46.109.
173
45 C.F.R. §46.111(a)(4).
174
45 C.F.R. §46.116(a).
172
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will not adversely affect the rights and welfare of the subjects, and (3) the research is not
practicable without a waiver.175
HHS has promulgated additional protections for certain vulnerable populations involved in
research. Those groups include pregnant women, human fetuses, and neonates; prisoners; and
children.176
FDA has issued its own set of Human Subject Regulations, which are similar, but not identical, to
the Common Rule.177 FDA applies these regulations to all the research it regulates, including
clinical trials of new drugs and medical devices, regardless of the source of funding for the
research. Humanitarian use devices, which are approved by FDA for diagnosing or treating
diseases or conditions that affect fewer than 4,000 individuals in the United States each year, can
be used in a facility only after a local IRB has approved their use in that facility, except in certain
emergency situations.178
In July 2011, HHS published an advance notice of proposed rulemaking (ANPRM) requesting
public comment on a broad range of amendments to the Common Rule, with the goal of
“enhancing the effectiveness of the research oversight system by improving the protections for
human subjects while also reducing burdens, delays, and ambiguity for investigators and human
subjects.”179 HHS sought comments on such changes as refining the current risk-based regulatory
framework, coordinating IRB review of multisite studies, and harmonizing the regulations and
guidance of different agencies. HHS has yet to publish a proposed rule based on the extensive
comments it received on the ANPRM.
Section 2261. Protection of Human Subjects in Research; Applicability of Rules
Provision
The provision instructs the Secretary, to the extent possible, to harmonize differences between the
HHS Human Subject Regulations and the FDA Human Subject Regulations. The Secretary would
be required to modify the HHS and FDA regulations and associated rules for vulnerable
populations to reduce regulatory duplications and unnecessary delays; accommodate multisite and
cooperative research projects; incorporate local consideration, community values, and
mechanisms to protect vulnerable populations; and ensure that human research that is subject to
the HHS regulations or to the FDA regulations may use joint or shared IRB review, an
independent IRB, or some other IRB arrangement to avoid duplication of effort.
Within 36 months of enactment, the Secretary, in consultation with stakeholders, would be
required to issue regulations and guidance as necessary to implement this provision and help
facilitate the broader use of single, central, or lead IRBs. Such regulations and guidance must
address arrangements to avoid regulatory duplication and unnecessary delays; for example, by
delineating the roles of IRBs in multisite or cooperative studies and by standardizing informed
consent and other processes and legal documents. Concerns about regulatory and legal liability
175
45 C.F.R. §46.116(d).
45 C.F.R. Part 46, Subparts B (pregnant women, fetuses, neonates), C (prisoners), and D (children).
177
21 C.F.R. Parts 50, 56, 312, and 812.
178
FFDCA §520(m)(4).
179
Department of Health and Human Services, Food and Drug Administration, “Human Subject Research Protections:
Enhancing Protections for Research Subjects and Reducing Burden, Delay, and Ambiguity for Investigators,” 76
Federal Register 44512, July 25, 2011.
176
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contributing to research sponsors’ decisions to rely on local IRBs must also be addressed. The
Secretary would be required to complete the harmonization process not later than 36 months after
enactment, and would have to submit a progress report to Congress within 24 months of
enactment. In addition, within 12 months of enactment, the Secretary would be required to
finalize the Draft NIH Policy on Use of a Single Institutional Review Board for Multi-Site
Research.180
Section 2262. Use of Non-Local Institutional Review Boards for Review of
Investigational Device Exemptions and Human Device Exemptions
Provision
The provision would amend Section 520 of the FFDCA by removing the word “local” in all
references to local IRBs, including in the stipulation that an approved humanitarian use device
can be used in a facility only after a local IRB has approved such use, except in certain
emergency situations. Within 12 months of enactment, the Secretary would be required to revise
or issue regulations or guidance, as necessary, to carry out these amendments.
Section 2263. Alteration or Waiver of Informed Consent for Clinical
Investigations
Provision
The provision would amend Section 520(g) of the FFDCA (“Exemption for Devices for
Investigational Use”) to waive the informed consent requirement for individuals participating in
the clinical trial of a medical device if the trial poses no more than minimal risk to the participants
and includes appropriate safeguards to protect their rights, safety, and welfare.
The provision also would amend Section 505(i) of the FFDCA (regarding the investigational use
of drugs) to waive the informed consent requirement for individuals participating in the clinical
trial of a drug if the trial poses no more than minimal risk to the participants and includes
appropriate safeguards to protect their rights, safety, and welfare.
Subtitle P—Improving Scientific Expertise and Outreach at FDA
Section 2281. Silvio O. Conte Senior Biomedical Research Service
Background
The Commissioned Corps of the U.S. Public Health Service (USPHS) is a uniformed service with
the mission “to protect, promote, and advance the health and safety of our Nation.”181 The Ready
Reserve Corps of the USPHS was authorized by the ACA to assist full-time Commissioned Corps
personnel on short notice as needed. The Silvio O. Conte Senior Biomedical Research Service
(the Service), established by PHSA Section 228, may include up to 500 members who are
180
Department of Health and Human Services, National Institutes of Health, “Announcement of a Draft NIH Policy on
the Use of a Single Institutional Review Board for Multi-Site Research,” 80 Federal Register 511, January 6, 2015.
181
Commissioned Corps of the U.S. Public Health Service, Mission and Core Values, http://www.usphs.gov/aboutus/
mission.aspx.
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authorized in addition to members of the commissioned Regular Corps, the Reserve Corps, and in
the Senior Executive Service otherwise authorized. The authority does not require that the
number of members in those three entities be reduced to offset the number of Service members.
The Secretary appoints as Service members doctoral-level individuals who are outstanding in the
fields of biomedical research or clinical research evaluation. The appointments are made “without
regard to the provisions of title 5 regarding appointment.” Rate of pay may not exceed that for
Level I of the Executive Schedule unless approved by the President. The Secretary may
contribute an amount up to 10% of a Service member’s pay to that person’s already established
retirement system at the institution of higher education at which the member had been employed.
Provision
The provision would rename the Service as the Silvio O. Conte Senior Biomedical Research and
Biomedical Product Assessment Service. It would specify that the purpose of the Service “is to
recruit and retain competitive and qualified scientific and technical experts outstanding in the
field of biomedical research, clinical research evaluation, and biomedical product assessment.”
The provision would eliminate mention of a specified number of authorized service members (up
to 500 members in current law). It would also eliminate the requirement that the Service members
be authorized in addition to those in the three entities specified in current law. It would not be
construed to require the Secretary to reduce the number of employees serving in other
employment systems (instead of, as currently, the three specified entities) to offset the number of
employees in the Service.
The provision would authorize the Secretary to appoint a member who holds “a master’s level
degree in engineering, bioinformatics, or a related or emerging field,” expanding the current
requirement for doctoral-level members. It would change the pay rate limit to that of the President
and would eliminate the Secretary’s authority to contribute to a member’s retirement system at an
institution of higher education.
The provision would require that the Secretary publish a report on the HHS website regarding the
changes to the Service and whether they “have improved the ability of the Food and Drug
Administration to hire and retain qualified experts to fulfill obligations specified under user fee
agreements.”
Section 2282. Enabling FDA Scientific Engagement
Provision
The provision would express the sense of Congress that participation in or sponsorship of
scientific conferences and meetings is essential to the mission of FDA.
Section 2283. Reagan-Udall Foundation for the Food and Drug Administration
Background
FFDCA Section 770, as added by the Food and Drug Administration Amendments Act of 2007
(FDAAA, P.L. 110-85), created the Reagan-Udall Foundation for the Food and Drug
Administration, a nonprofit organization “to advance the mission” of FDA. Its duties cover
activities such as identifying and then prioritizing unmet needs; awarding grants or entering into
other agreements with scientists, academic consortia, public-private partnerships, nonprofit
organizations, and industry; holding meetings and publishing information and data for use by
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FDA and others; and taking action to obtain patents and licensing of inventions; among others. It
is led by a Board of Directors, four of whom are ex officio members, nine from candidates
provided by the National Academy of Sciences, and five from candidates provided by “patient
and consumer advocacy groups, professional scientific and medical societies, and trade
organizations.” The section specifies the number of members to be appointed representing each
type of group and requires that the ex officio members ensure specific expertise among the
members.
Provision
The provision would change the membership of the Board of Directors to allow the voting
members of the board to increase the size of the board and appoint new members by majority
vote, without regard to the balance of expertise and affiliation required by current law. It would
limit to 30% of the membership “representatives of the general pharmaceutical, device, food,
cosmetic, and biotechnology industries.” The obligation to ensure specific expertise among the
members would be broadened to rest with all members of the board, not only ex officio
appointees. That broader group would also decide other administrative matters.
The provision would remove the salary cap of the foundation’s Executive Director, which is now
set at the compensation of the Commissioner. Also amended would be the language regarding
separation of funds. The current requirement is that funds received from the Treasury be held in
separate accounts from funds received from other sources, including private entities. The
provision would change the requirement, so that funds received from the Treasury would be
“managed as individual programmatic funds, according to best accounting practices.”
Section 2284. Collection of Certain Voluntary Information Exempted from
Paperwork Reduction Act
Background
The Paperwork Reduction Act (PRA, 44 U.S.C. Chapter 35), enacted in 1980 and amended in
1995, established the Office of Information and Regulatory Affairs (OIRA) in the Office of
Management and Budget (OMB). Congress required that agencies seek OIRA permission before
collecting information from the public. The first of 11 stated purposes was to “minimize the
paperwork burden for individuals ... and other persons resulting from the collection of
information by and for the Federal Government.”182 The PRA requires that federal agencies
receive clearance from OIRA before requesting most types of information from the public.183
PRA clearance is required when standardized information is collected from 10 or more
respondents within a 12-month period.184 The PRA does not apply to certain types of scientific
research, including collections that are neither sponsored nor conducted by the agency and those
that are subject to a clinical exception.185
182
44 U.S.C. §3501.
For further information about the PRA, see CRS Report RL30590, Paperwork Reduction Act Reauthorization and
Government Information Management Issues, and CRS Report RL32397, Federal Rulemaking: The Role of the Office
of Information and Regulatory Affairs.
184
See NIH, Office of Science Policy, Genetics, Health and Society, What is the Paperwork Reduction Act?, at
http://osp.od.nih.gov/faq/what-paperwork-reduction-act; and, HHS, Frequently Asked Questions About PRA /
Information Collection, at http://www.hhs.gov/ocio/policy/collection/infocollectfaq.html.
185
Cass R. Sunstein, Facilitating Scientific Research by Streamlining the Paperwork Reduction Act Process, Executive
(continued...)
183
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Provision
This provision would add a new Section 708A to the FFDCA, which would exempt from the PRA
Secretary-initiated collection, such as through surveys or questionnaires, of voluntary information
from patients, industry, academia, and other stakeholders.
Section 2285. Hiring Authority for Scientific, Technical, and Professional
Personnel
Background
Title 5 of the United States Code provides the broad framework of requirements under which
many federal employees are hired; however, some subsets of employees are hired under
alternative government-wide or agency-specific authorities. Numerous hiring authorities target
scientists and other technical workers, for whom federal agencies such as FDA compete with the
private sector and nonfederal public employers.186 For example, FFDCA Section 714 authorizes
the Secretary to appoint employees to positions in FDA to perform, administer, or support
activities related to review of medical device applications and human generic drugs “without
regard to the provisions of title 5, United States Code, governing appointments in the competitive
service.”
Provision
The provision would add to the FFDCA a new Section 714A allowing the Secretary to “appoint
qualified candidates to scientific, technical, or professional positions” in the competitive service
within FDA’s Center for Drug Evaluation and Research, Center for Biologics Evaluation and
Research, and Center for Devices and Radiological Health “without regard to the provisions of
title 5, United States Code, governing appointments in the competitive service.” The Secretary
would be allowed to determine pay (not to exceed the annual rate of pay of the President) for the
purposes of retaining qualified employees, notwithstanding certain General Schedule pay rate
requirements. The Secretary would be required to submit a report to Congress (1) examining how
this authority enhanced FDA’s ability to recruit and retain highly qualified individuals and (2)
providing recommendations on whether the authority should be reauthorized (although the
authorization would not expire) and other personnel authorities that might help the FDA recruit
and retain highly qualified personnel.
(...continued)
Office of the President, Office of Management and Budget, December 9, 2010, https://www.whitehouse.gov/sites/
default/files/omb/memoranda/2011/m11-07.pdf.
186
CRS Report R40604, Hiring and Pay Authorities for Federal Scientific and Technical (S&T) Personnel.
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Subtitle Q—Exempting From Sequestration Certain User Fees
Section 2301. Exempting From Sequestration Certain User Fees of Food and
Drug Administration
Background
Sequestration is a budgetary enforcement process involving automatic, largely across-the-board
spending reductions that are triggered under certain conditions.187 It was first authorized by the
Balanced Budget and Emergency Deficit Control Act of 1985 (BBEDCA, Title II of P.L. 99-177).
Certain federal programs are exempt from sequestration under BBEDCA Section 255. Others are
subject to special rules, such as partial sequestration, under BBEDCA Section 256. Under current
law, FDA user fees, paid by industry to support FDA’s review or regulation of medical products,
have been interpreted as being subject to sequestration.188
Provision
The provision would add user fees for the following FDA-regulated medical products to the list in
BBEDCA Section 255(g), exempting these fees189 from future sequestrations:




brand human drugs and biologics and generic human drugs, under FFDCA
Sections 736 and 744B, respectively;
human devices under FFDCA Section 738;
biosimilar biological products under FFDCA Section 744H; and
brand and generic animal drugs under FFDCA Sections 740 and 741,
respectively.
The provision also would amend BBEDCA Section 256(h) to clarify that administrative expenses
funded by the user fees listed above would be exempt from sequestrations that would otherwise
apply to agency administrative expenses.
187
See CRS Report R42050, Budget “Sequestration” and Selected Program Exemptions and Special Rules,
coordinated by Karen Spar .
188
See Stephanie Beasley, “FDA Funding Advocates Push ‘Permanent Fix’ For User Fee Sequestration,” FDA Week,
January 23, 2014. OMB determined that FDA user fees were fully sequestrable in FY2013. Congressional
appropriators subsequently released those sequestered funds and made them available to the FDA in the FY2014
Agriculture appropriations act (Section 747 in Division A of the Consolidated Appropriations Act, 2014 (P.L. 113-76)).
189
This provision would not exempt from sequestration authorized user fees that support FDA activities in its Foods
and Tobacco Products programs or various smaller user fees, such as those relating to mammography quality or color
certification.
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Subtitle R—Other Provisions190
Section 2321. Sense of Congress
Background
FFDCA section 519(f) directed the Secretary of HHS to publish regulations establishing a unique
device identification (UDI) system for medical devices.191 The final rule, published in 2013,
requires that device manufacturers include a UDI on the device label and package except when
the rule provides an exemption or alternative. A UDI is also required to be on the device itself if
the device is intended for more than one use and is reprocessed before each use. FDA has
identified a number of benefits to be expected following full implementation of the UDI system
including, for example: more accurate reporting, reviewing and analyzing of device adverse event
reports; more effective management of device recalls; and a more robust postmarket surveillance
system, allowing for the premarket approval or clearance of new devices and new uses of
currently marketed devices.192 However, these benefits will only be realized if UDI is
incorporated at the point-of-care in electronic health records and in health claims data.193
Provision
Provision states that it is “the sense of Congress that recording unique device identifiers at the
point-of-care in electronic health record systems could significantly enhance the availability of
medical device data for postmarket surveillance purposes.”
Title III—Delivery
Subtitle A—Interoperability
Section 3001. Ensuring Interoperability of Health Information Technology
Background
The Health Information Technology for Economic and Clinical Health (HITECH) Act was
enacted in 2009 to support the development of a nationwide health information technology (HIT)
190
Amendment 6 (Fitzpatrick) to H.R. 6 added Subtitle R and Section 2321; it was approved by voice vote.
Amendment 7 (Polis) to H.R. 6 was withdrawn. It would have added an alternative Subtitle R and Section 2321
regarding a report, submitted to Congress by the Secretary of HHS, assessing the feasibility, benefits and risks of
establishing an expedited two-tiered FDA approval process for medical devices to be lawfully marketed as of the date
the device was shown to be safe, regardless of whether the device was shown to be effective.
191
Section 226 of FDAAA added section 519(f) to the FFDCA. Section 614 of FDASIA required the Secretary to issue
proposed regulations for the UDI system no later than December 31, 2012; these were published July 10, 2012, and the
final rule was published on September 24, 2013.
192
For additional benefits, see FDA, Medical Devices, Benefits of a UDI System, at:
http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/UniqueDeviceIdentification/BenefitsofaUDIsyste
m/default.htm
193
Gregory Daniel, Mark McClellan, and Siromi Gardina, et al., Unique Device Identifiers (UDIs): A Raodmap for
Effective Implementation., The Engelberg Center for Health Care Reform at Brookings, December 2014, p. p. 5,
http://www.fda.gov/downloads/MedicalDevices/DeviceRegulationandGuidance/UniqueDeviceIdentification/Benefitsof
aUDIsystem/UCM445330.pdf.
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infrastructure for the exchange of electronic health information.194 The HITECH Act authorized
Medicare and Medicaid incentive payments to promote the use of electronic health record (EHR)
technology by hospitals and physicians. To date, the EHR incentive programs have provided more
than $30 billion in incentive payments and resulted in a dramatic increase in the adoption of EHR
systems among health care providers.195
Hospitals and physicians qualify for incentive payments under the HITECH Act if they become
meaningful users of certified EHR technology. In order to demonstrate meaningful EHR use,
providers must attest to using their EHR systems to perform certain functions; for example,
capturing patient data, electronic prescribing, and exchanging summary of care information with
other health care providers. These meaningful use objectives (and associated metrics) are
developed by CMS based on recommendations from the HIT Policy Committee, which was
established by the HITECH Act.
The vendors who develop EHR systems must incorporate various technical standards into the
technology so that different systems can share information. Those standards are adopted by the
HHS Office of the National Coordinator for Health Information Technology (ONC) based on
recommendations it receives from the HIT Standards Committee, established by the HITECH
Act. The HIT Standards Committee works closely with standards development organizations
(SDOs) to create the recommendations. ONC also issues certification criteria, which are used to
test and certify that EHR technology has the required capabilities and meets all the standards to
support meaningful use.
While the incentive programs have had an enormous impact on EHR adoption rates, many
providers that use EHR technology have difficulty exchanging information. Many of the
challenges and barriers to EHR interoperability—the ability of EHR systems to exchange and use
electronic health information—are well understood and are being addressed. For example, ONC
is working with stakeholders on a Shared Nationwide Interoperability Roadmap to identify shortand long-term goals for the next 10 years, with 2017 set as a deadline to achieve basic EHR
interoperability (i.e., the ability of EHR systems to send, receive, find, and use a common set of
clinical information).196 In April 2015, ONC released a report to Congress on health information
blocking by HIT vendors, health care providers, and health care systems.197 The report
summarizes the evidence for information blocking (i.e., deliberate and unreasonable conduct that
interferes with the ability of authorized persons to access, exchange, or use electronic health
information); describes the various actions being taken by ONC and other agencies to address
information blocking; and outlines the gaps in current knowledge, programs, and authorities that
limit the ability of ONC and others to address information blocking.
The Medicare Access and CHIP Reauthorization Act of 2015 included several provisions to
address EHR interoperability and information blocking.198 It requires the Secretary to establish
interoperability metrics by July 1, 2016, and sets a goal of widespread EHR interoperability by
194
P.L. 111-5, Division A, Title XIII, and Division B, Title IV.
CMS maintains an extensive website on the Medicare and Medicaid EHR incentive programs at
http://www.cms.gov/ehrincentiveprograms.
196
Office of the National Coordinator for Health Information Technology, Connecting Health and Care for the Nation:
A Shared Nationwide Interoperability Roadmap, Draft Version 1.0, February 2015, http://www.healthit.gov/sites/
default/files/nationwide-interoperability-roadmap-draft-version-1.0.pdf.
197
Office of the National Coordinator for Health Information Technology, Report on Health Information Blocking,
Report to Congress, April 2015, http://www.healthit.gov/sites/default/files/reports/info_blocking_040915.pdf.
198
P.L. 114-10, §106(b), 129 Stat. 87.
195
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December 31, 2018, based on those measures. The Secretary must report to Congress by
December 31, 2019, with recommendations if the goal is not met. In addition, beginning April 16,
2016, health care providers attesting to EHR meaningful use must indicate that they have not
knowingly or willfully taken any action to interfere with the interoperability of their EHR
technology.
Provision
The provision would make a series of amendments to Title XXX of the PHSA (“Health
Information Technology and Quality”) to promote the adoption of new interoperability standards;
strengthen the existing certification process to ensure that EHR systems and other HIT meet those
standards; and establish new enforcement authority and penalties to discourage HIT vendors,
health care providers, and health care systems from blocking the exchange and use of electronic
health information.
First, the provision would establish interoperability criteria for HIT. To be considered
interoperable, the technology would have to allow for the complete access, exchange, and use,
and the secure transfer, of all electronically accessible health information under applicable state
or federal law. Moreover, the technology must not be configured or implemented to permit
information blocking, which is broadly defined to include business, technical, and organizational
practices that impede electronic health information access, exchange, or use. Not later than
January 1, 2017, the Secretary, in consultation with ONC, would be required to issue guidance on,
and provide examples of, HIT interoperability.
Second, the provision would limit the HIT Policy Committee’s role to providing policy and
priority recommendations to the Secretary and prohibit it from otherwise affecting the
development or modification of standards, implementation specifications, and certification
criteria. It would terminate the HIT Standards Committee and, in its place, require the Secretary
to enter into one or more contracts with accredited SDOs in order to obtain recommendations for
an initial set of interoperability standards and accompanying implementation specifications. The
Secretary would be required periodically to evaluate and review existing standards,
implementation specifications, and certification criteria to determine if modifications or additions
to such standards, specifications, and criteria are needed. If that is the case, the Secretary would
be required to enter into subsequent contracts with SDOs to obtain additional recommendations.
Each SDO under contract also would be required to submit its recommendations to the National
Institute of Standards and Technology (NIST). The provision would authorize the appropriation
of $10 million, to remain available until expended, for SDO contracts.
Third, the provision would establish rules and a timetable for the Secretary by regulation to adopt
recommended interoperability standards. If no standard, implementation specification, or
certification criterion were recommended by an SDO, the Secretary would be permitted by
regulation to adopt a standard, implementation specification, or certification criterion
recommended by the HHS National Committee on Vital and Health Statistics. The Secretary may
not adopt any policies, standards, implementation specifications, or certification criteria that are
inconsistent with or duplicative of an interoperability standard adopted under this provision.
Fourth, the provision would require the Secretary, by July 1, 2017, to submit to Congress and
make publicly available a report on (1) the initial set of adopted interoperability standards, (2)
barriers preventing widespread interoperability, and (3) strategies (including specific steps and
milestones) for achieving widespread interoperability.
Fifth, beginning January 1, 2018, EHR technology would have to comply with the new
interoperability standards in order to obtain certification. In addition, vendors of such technology
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would have to attest to a series of requirements as a condition of certification, and maintenance of
certification. They include (1) not taking any action (including business, technical, and
organizational practices) that constitutes information blocking; (2) making publicly available
detailed pricing information on any additional types of costs or fees (or other contractual
limitations) associated with using any function or capability for which the EHR technology is to
be certified; (3) publishing, and demonstrating the use of, application programming interfaces
(APIs) that allow health information maintained by a vendor’s EHR technology to be exchanged,
accessed, and used without special effort. Beginning January 1, 2019, EHR technology that did
not comply with the new interoperability standards, or whose vendor violated the terms of the
attestation, would be decertified.
Sixth, the provision would give the HHS Inspector General new enforcement authority to
investigate claims of EHR vendors being in violation of the attestation requirements, or EHR
vendors and users engaging in information blocking. ONC would be required to establish a
standardized process for the public to submit reports of EHR technology that was not
interoperable, EHR technology that resulted in information blocking, or actions taken by vendors
or users of EHR technology that impeded interoperability or resulted in information blocking.
Any individual or entity engaged in such activity, with respect to items or services provided under
the Medicare or Medicaid programs, would be subject to civil monetary penalties (CMPs) that the
Secretary by rulemaking determined appropriate. The provision would authorize the
appropriation of $10 million for FY2017, to remain available until expended, for enforcement
activities. And it would allow the Inspector General to retain and use any CMP amounts it
collected for such activities. It also would extend the privilege and confidentiality protections
under Title IX, Part C, of the PHSA to claims of information blocking and reports related to the
vendor attestation requirements.
Seventh, the provision would require the Secretary, within 12 months of enactment, to implement
all the requirements of the provision through rulemaking. The Secretary also would be required to
clarify that health care providers would not be penalized for the actions of vendors of EHR
technology that failed to meet the certification requirements. Not later than January 1, 2017, ONC
would be required to publish guidance on the relationship of the HIPAA privacy and security
standards to information blocking.
Eighth, the provision would require ONC, by January 1, 2019, to post online information that
allows purchasers of EHR technology to compare the functionality, price, and other features of
the different products. Beginning in 2019, and each year thereafter, the Secretary would be
required to post online a list of decertified EHR technology. The Secretary also would be required
periodically to review and confirm that vendors have published APIs, as required for certification.
Ninth, beginning with the 2020 reporting period, eligible professionals and hospitals
demonstrating meaningful use of certified EHR technology under the Medicare EHR incentive
program would have to attest that they had not engaged in information blocking. Medicareeligible professionals and hospitals determined not to be meaningful EHR users because their
EHR technology was decertified would be eligible for a hardship exemption from the payment
adjustment, subject to annual renewal. Similarly, beginning with the 2020 reporting period,
eligible professionals and hospitals would not qualify for the Medicaid EHR incentive payments
unless they attested that they had not engaged in information blocking. Not later than January 1,
2018, the Secretary would be required to issue guidance to help providers who voluntarily
transition between different certified EHR technology by removing disincentives to such
transitions.
Finally, the provision would instruct NIST, beginning January 1, 2018, to test the new
interoperability standards in order to ensure their efficient implementation and use. It would
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authorize the appropriation of $15 million, to remain available until expended, for NIST testing.
The provision also would eliminate the interoperability language in the Medicare Access and
CHIP Reauthorization Act of 2015 (i.e., Section 106(b) of P.L. 114-10).
The provision concludes by stating that it is the sense of Congress that, among other things (1)
interoperability is best achieved if individuals and their authorized representatives (e.g., family
members, caregivers) have equal access to the electronic health information of such individuals;
(2) individuals and their authorized representatives have the right to the entire medical record; (3)
health care providers should not be able to deny a patient’s request for access to the entire record;
and (4) health care providers should not need the consent of their patients to share patient
information with other HIPAA-covered entities as permitted under the privacy rule.
Subtitle B—Telehealth
Section 3021. Telehealth Services under the Medicare Program
Background
Telehealth is the use of electronic information and telecommunications technologies to support
remote clinical health care, patient and professional health-related education, and other health
care delivery functions. Telemedicine is the use of advanced telecommunications mainly to
support clinical care. Live videoconferencing, telemonitoring, and the use of web-based
technologies are examples of telecommunications that support telehealth under some parts of
Medicare.
The Medicare program is structured in four parts: Part A (hospital insurance), Part B (physician
services), Part C (managed care), and Part D (prescription drugs). CMS makes payments to
providers for telehealth services under all parts, except Part A. Medicare Part B pays for
medically necessary services and preventive services, such as those that are needed to diagnose or
treat a medical condition and that meet accepted standards of medical practice.199 Telehealth
services must be provided through live videoconferencing, and there are two payments: (1) to
physicians or other professionals at the distant site, for the telehealth consultation, and (2) to the
facility where the patient is located, which is the originating site.200 Medicare Part C (Medicare
Advantage, or MA) private health insurance plans may provide basic telehealth benefits as part of
the standard benefit; telemonitoring and web-based and phone technologies may be used to
provide telehealth services.201 Under Medicare Part D, Medicare Advantage Prescription Drug
(MAPD) plans or Prescription Drug Plans (PDPs) may choose to include telehealth services as
part of their plan benefits, for instance, in providing medication therapy management (MTM).202
199
SSA, Section 1862(a)(1)(A).
SSA, Section 1839(m)(2).
201
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA) (P.L. 108-173), enacted on
December 8, 2003, added a new ‘‘Part D’’ to Sections 1860D-1 through 42 of the Social Security Act, and made
significant changes to the existing Part C program, which it named the Medicare Advantage (MA) Program.
202
Part D Medication Therapy Management (ACA Section 10328); and Durable Medical Equipment (DME) Face to
Face (ACA Section 6407). The regulations governing the Part D program are set forth in 42 C.F.R. Part 423—
Voluntary Medicare Prescription Drug Benefit. See also CMS, Medicare Managed Care Manual, Chapter 4, Benefits
and Beneficiary Protections, Section 30.3—Examples of Eligible Supplemental Benefits, which includes (for example)
telemonitoring services, remote access technologies, interactive web- and/or telephone-based coaching (available at
http://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/mc86c04.pdf).
200
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Barriers to increased use of telehealth services under the Medicare program include, but are not
limited to, the lack of specific telehealth payments in circumstances other than those specified
under current law (Section 1834(m)), uneven broadband access, and current licensure
requirements for health professionals. Having evidence-based models that support telehealth as a
safe, effective, and appropriate use of technology in health care delivery would help support the
expansion of telehealth services. Telehealth or telemedicine services are not appropriate for all
conditions and illnesses,203 and evidence is needed to establish appropriate quality standards in
additional areas of health care delivery.204
Provision
The provision would require, within a year of enactment, the CMS Administrator and MedPAC to
submit information to Congress on telehealth. The CMS Administrator would be required to
provide information on subpopulations of Medicare beneficiaries that might benefit from
telehealth services; CMMI activities that examine the use of telehealth services in models,
projects, or initiatives; the types of high-volume services under the Medicare program that might
be suitable for telehealth reimbursement; and barriers to telehealth expansion. MedPAC would be
required to identify telehealth services that are reimbursable under Medicare Parts A and B;
telehealth services that are reimbursable by private health insurance plans; and potential ways to
incorporate into Medicare Parts A and B those telehealth services for which they do not currently
reimburse but for which private health insurance plans do reimburse.
The provision would express the sense of Congress that eligibility for telehealth coverage under
the Medicare program should be expanded. Any such expansion should recognize that
telemedicine is the delivery of safe, effective, quality health care services by a health care
provider, using technology as the mode of care delivery; should meet or exceed conditions for
Medicare coverage and payment; and should involve clinically appropriate means for delivering
telehealth services.
Subtitle C—Encouraging Continuing Medical Education for
Physicians
Section 3041. Exempting From Manufacturer Transparency Reporting Certain
Transfers Used for Educational Purposes
Background
In recent years, questions have been raised about certain financial relationships between health
care professionals, such as physicians, and the pharmaceutical and other medical industries. As
part of these relationships, companies may give gifts or make payments to health care
professionals as part of their marketing efforts or for other purposes. In an effort to promote
203
HHS, Telemedicine for the Medicare Population: Update, Prepared for Agency for Healthcare Research and
Quality (Contract Number: 290-02-0024), February 2006, Prepared by Oregon Evidence-based Practice Center; and
MedPAC, Report to the Congress: Medicare and the Health Care Delivery System (June 2012).
204
Institute of Medicine, The Role of Telehealth in an Evolving Health Care Environment: Workshop Summary,
Washington, DC, 2012, p. 15, http://www.iom.edu/Reports/2012/The-Role-of-Telehealth-in-an-Evolving-Health-CareEnvironment.aspx.
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transparency and prevent inappropriate relationships, Section 1128G of the Social Security Act205
generally requires applicable drug, device, biological, or medical supply manufacturers that make
a payment or other transfer of value to a “covered recipient” (i.e., a physician or a teaching
hospital) to annually report information on such transactions to the Secretary of HHS. Categories
of payments and transfers of value that must be reported include amounts for research, gifts,
entertainment, consulting fees, grants, meals, and travel. Certain items are exempt from
disclosure, including payments or transfers of $10 or less, unless the aggregate annual payments
or transfers to a recipient exceeds $100 (which is indexed for inflation); samples intended for
patient use; loans of a covered device for a short-term time period; and “educational materials
that directly benefit patients or are intended for patient use.”206 Civil monetary penalties may be
imposed for noncompliance with this section.
In addressing the scope of the exclusion for educational materials, CMS has stated that while
certain items provided to covered recipients, such as medical text books and journal reprints, are
important for physicians, they are not directly beneficial to patients or intended for patient use,
and thus are reportable under this section.207 In addition, pursuant to regulations and CMS
guidance, applicable manufacturers that contribute funding to a continuing medical education
program may be required to report the payments provided to physician speakers.208 An exception
to this reporting exists for indirect payments or other transfers of value where the applicable
manufacturer is unaware of the identity of the recipient during the reporting year or by the end of
the second quarter of the following reporting year.209
Provision
The provision would broaden the exclusions from the reporting requirement under Section 1128G
for certain education-related payments or transfers of value. It would specify that items such as
peer-reviewed journals, journal reprints, journal supplements, medical conference reports, and
medical textbooks may be considered patient educational materials, and therefore exempt from
reporting under this section. In addition, in cases where the recipient is a physician, the provision
would exclude indirect payments or transfers of value that (1) come from speaking at, or
preparing educational materials for, an educational event for health care professionals, so long as
the event does not commercially promote a covered drug, device, biological, or medical supply;
or (2) are solely for the purpose of providing medical education to the physician. The
amendments made by this section would apply to transfers of value made on or after the date of
enactment of the act.
205
42 U.S.C. §1320a–7h.
42 U.S.C. §1320a-7h(e)(10)(B).
207
Medicare, Medicaid, Children’s Health Insurance Programs; Transparency Reports and Reporting of Physician
Ownership or Investment Interests, 78 Fed. Reg. 9458, 9486 (February 8, 2013).
208
See 42 C.F.R. § 403.904; Centers for Medicare and Medicaid Services, Frequently Asked Questions, available at
https://questions.cms.gov/faq.php?id=5005&faqId=11600. An “indirect payment” is defined as a payment or other
transfer of value made by an applicable manufacturer to a covered recipient through a third party, where the applicable
manufacturer requires, instructs, directs, or otherwise causes the third party to provide the payment or transfer of value,
in whole or in part, to a covered recipient. 42 C.F.R. § 403.902.
209
42 C.F.R. § 403.904(h)(1).
206
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Subtitle D—Disposable Medical Technologies
Section 3061. Treatment of Certain Items and Devices
Background
The Medicare Supplementary Medical Insurance Program (Part B) currently covers a wide
variety of durable medical equipment (DME) if they are medically necessary and are prescribed
by a physician.
Durable medical equipment is equipment that (1) can withstand repeated use, (2) has an expected
life of at least three years (effective for items classified as DME after January 1, 2012), (3) is used
to serve a medical purpose, (4) generally is not useful in the absence of an illness or injury, and
(5) is appropriate for use in the home. DME also includes the drugs necessary for the proper
function of certain DME, and supplies, such as surgical dressings, used in conjunction with the
DME.
Historically, Medicare has paid for most DME on the basis of fee schedules. Medicare pays 80%
of the lesser of the amount charged or the fee schedule amount, while the beneficiary is
responsible for the remaining 20%, plus any unmet deductible. Unless otherwise specified by
Congress, fee schedule amounts are updated each year by a measure of price inflation. However,
studies by federal agencies have shown that Medicare pays above-market prices for certain items
of DME. The Medicare Prescription Drug, Improvement, and Modernization Act (MMA, P.L.
108-173) established a Medicare-competitive acquisition program (i.e., competitive bidding),
under which prices for selected DME sold in specified areas are determined not by a fee schedule
but by the bids of winning suppliers. Prices for DME established through competitive bidding
thus far have been lower than prices established through fee schedules.
The Health Care Common Procedure Coding System (HCPCS) is a standard coding system used
to identify medical services and procedures furnished by a physician or other provider (HCPCS
Level I Codes) and products, supplies, and services not included in the Level I codes (HCPCS
Level II Codes). Some HCPCS Level I codes for physician services would include payment for a
medical device, such as when a therapeutic or diagnostic infusion is administered in a physician’s
office using a pump. Durable medical equipment used in a beneficiary’s home is identified using
HCPCS Level II Codes.210
Medicare provides coverage for home health services to beneficiaries (1) who are homebound;
(2) who require part-time or intermittent skilled nursing care and/or skilled rehabilitation, or, after
establishing prior eligibility, a continuing need for occupational therapy; and (3) for whom the
services have been established in a plan of care that has been ordered, certified, and periodically
reviewed by a physician. Medicare home health services include a variety of items and services
such as nursing visits, home health aide visits, medical supplies, and DME. While most home
health services are paid for under a single reimbursement amount, DME is excluded and
reimbursed separately. Home health agencies may provide DME directly or under arrangement
with a DME supplier.
210
http://www.cms.gov/Medicare/Coding/MedHCPCSGenInfo/HCPCS_Coding_Questions.html.
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Provision
The provision would establish a separate payment for certain disposable devices when those
items are furnished during a home health episode and paid directly to the home health agency.
The devices to be paid for by Medicare under this provision would be those items, as of January
1, 2015, for which (1) there is a Level I HCPCS code for which the description for a professional
service includes furnishing the device, and (2) there is a separate Level I code for a professional
service that uses DME instead of such device. The payment for the disposable devices could not
exceed the payment that would be made for the HCPCS Level I code for professional services,
including such a device when paid for in a hospital outpatient department. The disposable devices
added by this section of the bill would be included in the Medicare home health benefit. These
provisions would be effective for devices furnished on or after January 1, 2017.
Subtitle E—Local Coverage Decision Reforms
Section 3081. Improvements in the Medicare Local Coverage Determination
(LCD) Process
Background
CMS administers the Medicare program through contracts with private entities, such as Medicare
Administrative Contractors (MACs). MACs assist CMS in administering Medicare’s day-to-day
operations, such as paying fee-for-service (FFS) claims, enrolling providers, coordinating
provider customer service, and other activities. MACs also conduct program integrity activities,
including prepayment and postpayment claims review, provider audits, and overpayment
recoupment. In addition, MACs develop and implement local coverage determinations (LCD) for
their jurisdictions.
Medicare covers a broad range of medical treatments, services, and equipment needed by
beneficiaries, but there are limitations to Medicare’s coverage. To be covered by Medicare, items
or services must be considered reasonable and necessary for the diagnosis or treatment of an
illness or injury, or to improve the functioning of a body part.211 Medicare law defines categories
of services and items that Medicare routinely covers, but the law does not specify which services
or under what conditions these items and services are covered. Under the reasonable and
necessary provision, the Secretary has discretion to determine what specific items and services
will be covered and under what conditions.
The Secretary has authority to make Medicare coverage policy decisions both nationally and
locally.212 LCDs are MAC decisions on whether, and under what circumstances, to cover a
particular item or service on a contractor-wide basis.213 National coverage decisions (NCDs) are
made by CMS to describe the circumstances under which Medicare will cover an item or service
on a nationwide basis. The vast majority of coverage policy is determined on a local level by
MACs. MACs initiate LCDs and may develop them in the absence of relevant NCDs or as a
211
Social Security Act Section 1862(a)(1).
CMS maintains an online database of all coverage decisions at http://www.cms.gov/medicare-coverage-database/.
213
Medicare Program Integrity Manual, Chapter 13, Section 13.1.3, Local Coverage Determinations.
212
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supplement to an NCD, as long as the LCD policy does not conflict with national Medicare
policy.214
CMS’s Medicare Program Integrity Manual instructs MACs on how to develop LCDs.215 The
process includes several mechanisms for local stakeholder input, including notice and comment
periods for new LCDs and state-based physician advisory committees, referred to as Carrier
Advisory Committees (CACs), to provide formal LCD input. In developing LCDs, MACs use
medical literature, the advice of local medical societies and medical consultants, public
comments, and comments from their provider community. MACs are responsible for ensuring
that LCDs are consistent with all statutes, rulings, regulations, and national coverage decisions.
Provision
The provision would require the Secretary to require MACs to display on their websites and on
the Medicare website at least 45 days prior to the effective date the following information for
each LCD developed by a MAC for its jurisdiction:





the entire LCD;
where and when the proposed LCD was first made public;
hyperlinks to the proposed LCD and responses to comments submitted to the
MAC on the proposed LCD;
a summary of evidence considered by the contractor during the LCD
development, as well as a list of sources of evidence; and
an explanation of the rationale in support of the proposed LCD.
The provision would be effective for LCDs proposed or revised 180 days after the enactment
date.
Subtitle F—Medicare Pharmaceutical and Technology Ombudsman
Section 3101. Medicare Pharmaceutical and Technology Ombudsman
Background
Under current Medicare law, the Secretary is not required to offer ombudsman services to entities
that manufacture pharmaceutical, biotechnology, medical device, or diagnostic products for
which these entities are seeking Medicare coverage.216
Medicare law requires the Secretary to conduct a satisfaction survey at least every five years of
beneficiaries, as well as providers and suppliers who submitted appeals (SSA §1869(e)) and to
submit a report to Congress on the results of the survey. In addition, SSA Section 1808(c) requires
the Secretary to appoint a Medicare Beneficiary Ombudsman. The Office of Medicare
Ombudsman (OMO) was created to identify and address systemic issues that affect Medicare
beneficiaries, but OMO does not help pharmaceutical, biotechnology, medical device, or
214
Section 522 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA, P.L.
P.L. 106-554).
215
Medicare Program Integrity Manual, Chapter 13, Section 13.1.3, Local Coverage Determinations.
216
According to CMS’s annual beneficiary publication, Medicare & You, an ombudsman is someone who reviews
complaints and helps to resolve those complaints.
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diagnostic product manufacturers resolve complaints, grievances, or requests about Medicare
coverage. The Medicare Beneficiary Ombudsman is prohibited from serving “as an advocate for
any increases in payments or new coverage of services,” but is authorized to “identify issues and
problems in payment or coverage policies.”217
Provision
The provision would require the Secretary to provide within 12 months of enactment a pharmacy
and technology ombudsman within CMS. The pharmacy and technology ombudsman would
receive and respond to complaints, grievances, and requests (regarding coverage, coding, or
payment) from pharmaceutical, biotechnology, medical device, or diagnostic product
manufacturers whose products are covered by Medicare or for which coverage was sought. The
pharmaceutical and technology ombudsman would be subject to the same prohibition on
advocacy and authority to identify issues as the Medicare Beneficiary Ombudsman.
Subtitle G—Medicare Site-of-Service Price Transparency
Section 3121. Medicare Site-of-Service Price Transparency
Background
Some Medicare-covered items and services can be provided either in a physician’s office, in a
hospital outpatient department, or in freestanding or hospital-operated ambulatory surgical
centers (ASCs); the payments would be determined by the Medicare physician fee schedule
(MPFS), the Medicare hospital outpatient prospective payment system (OPPS) fee schedule, or
the Medicare ASC payment system, respectively. The Medicare Payment Advisory Commission
(MedPAC) has recommended (for instance, in its March and June 2013 reports to Congress) that
Medicare implement “site-neutral” policies, for instance, those that would equalize outpatient
payment rates at hospitals to those of free-standing physician offices.
Provision
The provision would establish new requirements “to facilitate price transparency with respect to
items and services for which payment may be made either to a hospital outpatient department or
to an ambulatory surgery center.” Beginning in 2017 and in each year thereafter, the Secretary
would make information available to the public via a searchable website on (1) the estimated
Medicare payment amount for the items and services provided under both the hospital outpatient
prospective payment (OPPS) fee schedule and the ambulatory surgical center payment system,
and (2) the estimated amount of the beneficiary’s liability (for the item or service). The estimated
amount of beneficiary liability would be calculated based on the amount for which an individual
who does not have any Medicare supplemental coverage is responsible. The Secretary would
include the information described above in the annual explanation of Medicare benefits sent to all
beneficiaries. The Secretary could also use existing mechanisms, such as the CMS Physician
Compare website, to make this information available to beneficiaries. To implement this
subsection, the Secretary would transfer $6 million from the Supplemental Medical Insurance
Trust Fund to the CMS Program Management Account for FY2015; these funds would remain
available until expended.
217
SSA §1808(c)(2).
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Subtitle H—Medicare Part D Patient Safety and Drug Abuse
Prevention
Section 3141. Programs to Prevent Prescription Drug Abuse Under Medicare
Parts C and D
Background
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA, P.L. 108173) established Medicare Part D as a voluntary, outpatient prescription drug benefit. Part D
coverage is provided through private insurers, known as plan sponsors, that offer drug-only plans
(PDPs) or Medicare Advantage (MA or Part C) managed care plans that include a Part D benefit
(MA-PDs). According to recent government studies, some Part D beneficiaries have obtained
overlapping prescriptions from multiple prescribers for frequently abused prescription drugs.218
CMS has taken several steps to address the issue, including implementing an Overutilization
Monitoring System (OMS) to more closely track whether Part D sponsors have adequate systems
in place to track potential drug abuse.219
Provision
The provision would allow Part D plan sponsors to institute a drug management program limiting
the number of prescribers and pharmacies that could provide frequently abused drugs to Part D
beneficiaries at risk for drug abuse, require Part D plans to implement drug utilization
management tools, and expand the authority of Medicare Drug Integrity Contractors
(MEDICs).220 The changes would take effect for Part D plan years beginning more than one year
after the date of enactment.
Drug Management Program—The provision would amend Section 1860D-4(c) of the Social
Security Act (42 USC 1395w-10(c)) to allow Part D sponsors to designate certain enrollees as at
risk for prescription drug abuse based on clinical guidelines developed by the Secretary in
consultation with sponsors and other stakeholders and limit them to specific prescribers and
pharmacies. Individuals in hospice and certain long-term care settings would be exempt from the
at-risk designation. A frequently abused drug would be defined as a controlled substance that the
Secretary determined to be frequently abused or diverted.
Sponsors that chose to implement the drug management program would be required to provide
identified beneficiaries with an initial and a second notice explaining the at-risk designation, the
right to appeal the designation, information about public health programs to combat drug abuse,
and an explanation of the drug management program. The notices would also ask the beneficiary
for a list of preferred prescribers or pharmacies. Sponsors would assign at-risk beneficiaries to
218
Government Accountability Office, “Medicare Part D: Instances of Questionable Access to Prescription Drugs,”
September 2011, http://www.gao.gov/assets/590/585424.pdf; and CMS, “Supplemental Guidance Related to Improving
Drug Utilization Review Controls in Part D,” September 6, 2012, p. 30. Available at http://www.cms.gov/Medicare/
Prescription-Drug-Coverage/PrescriptionDrugCovContra/RxUtilization.html.
219
CMS, Final Call Letter 2013, “Improving Drug Utilization Review Controls in Part D.” Available at
http://www.cms.gov/Medicare/Health-Plans/MedicareAdvtgSpecRateStats/Announcements-and-Documents.html.
220
CMS contracts with regional MEDICs to help manage audit, oversight, and anti-fraud and abuse efforts in the Part
D program. The MEDICS identify cases of suspected fraud, and take action to prevent improper payment Medicare
Trust Fund monies and to help recoup inappropriate payments.
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pharmacies and prescribers based on the beneficiary preferences. However, if preferred
prescribers or pharmacies were found to be contributing to drug abuse or diversion, a sponsor
could alter the selections.
A beneficiary’s at-risk identification would terminate at the earlier of (1) the date the individual
demonstrated that he or she was no longer likely to be at risk, or (2) the end of a maximum period
that the Secretary would specify. A sponsor could identify an individual as at risk after
termination if new information became available.
By January 1, 2016, the Secretary would be required to hold a meeting of stakeholders, including
Medicare beneficiaries, advocacy groups, physicians, pharmacists and other clinicians, plan
sponsors, and drug manufacturers, for input on issues such as the impact of drug management
programs on cost-sharing and drug accessibility, an expedited appeals process, the types of
enrollees to be exempted, and the responsibilities of Part D sponsors that offer drug management
programs. The Secretary would be required to provide educational materials to Part D enrollees
describing the drug management program.
Utilization Management Tools—The provision would amend Section 1860D-4(c) of the Social
Security Act to require Part D plans to have a drug utilization tool to prevent drug abuse. The tool
could be either (1) a utilization management tool to prevent abuse of frequently used drugs and
diversion of drugs at pharmacies, (2) a retrospective review of drug use to identify individuals
that receive frequently abused drugs at a frequency or in amounts that are not clinically
appropriate and to identify providers of services or suppliers that may facilitate the abuse or
diversion of frequently abused drugs, or (3) a consultation process with MEDICs to verify
whether an individual enrolling in a Part D plan has been previously identified by another Part D
sponsor as an at-risk beneficiary. Sponsors would be required to provide monthly reports to the
Secretary and the MEDICs regarding providers and at-risk beneficiaries.
MEDICs—The provision would amend Section 1893 of the Social Security Act (42 U.S.C.
1395ddd) to provide that the Secretary, as part of contracts, authorize MEDICs to directly accept
prescription and necessary medical records from pharmacies, prescription drug plans, and other
entities to provide information relevant to determining whether a beneficiary is at risk of
prescription drug abuse. MEDICs would be required to acknowledge referrals and inform plan
sponsors or organizations within 15 days whether an individual was determined to be at risk.
MEDIC would be allowed to respond to requests for information from sponsors and other entities
in order to prevent fraud and abuse, in compliance with federal privacy laws.221 The HHS Office
of the Inspector General (HHS OIG) would be required to submit a study to Congress, no later
than a year after enactment, on the effectiveness of MEDICS in identifying, combatting, and
preventing fraud.
221
See CRS Report R43991, HIPAA Privacy, Security, Enforcement, and Breach Notification Standards.
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Title IV—Medicaid, Medicare, and Other Reforms
Subtitle A—Medicaid and Medicare Reforms
Section 4001. Limiting Federal Medicaid Reimbursement to States for Durable
Medical Equipment (DME) to Medicare Payment Rates
Background
States generally are free to set payment rates for items and services provided under Medicaid as
they see fit, subject to certain exceptions and a general requirement that payment policies are
consistent with efficiency, economy, and quality of care and are sufficient to provide access
equivalent to the general population’s access. However, there are federal upper payment limits on
fee-for-service reimbursement of certain Medicaid providers—particularly hospitals and nursing
facilities. Federal upper payment limit regulations specify that states cannot pay more in the
aggregate for inpatient hospital services or nursing facility services than the amount that would be
paid for the services under the Medicare principles of reimbursement. No upper payment limit
currently applies to durable medical equipment (DME) under Medicaid.
Historically, Medicare has paid for most DME on the basis of fee schedules. Unless otherwise
specified by Congress, fee schedule amounts are updated each year by a measure of price
inflation. However, studies by federal agencies have shown that Medicare pays above-market
prices for certain items of DME. Such overpayments may be due partly to the fee schedule
mechanism of payment, which does not reflect market changes. Examples of such market
changes include new and less-expensive technologies, changes in production or supplier costs,
and geographic price variations.
The Medicare Prescription Drug, Improvement, and Modernization Act (MMA, P.L. 108-173)
established a Medicare competitive acquisition program (i.e., competitive bidding) under which
prices for selected DME sold in specified areas are determined not by a fee schedule but by the
bids of winning suppliers. Payments based on the bids of winning suppliers went into effect in the
first nine metropolitan areas on January 1, 2011. The program has since expanded to 100
metropolitan areas. Starting in 2016, the Secretary is required to either expand competitive
bidding into additional areas, or apply information gained from competitive bidding to adjust fee
schedule amounts in areas where competitive bidding is not taking place. The authorizing
legislation also required the Secretary to establish a Competitive Acquisition Ombudsman (CAO)
to respond to complaints and inquiries made by suppliers and individuals, and submit to Congress
an annual report on the competitive bidding program.222 The CAO is organized within the Office
of the Medicare Ombudsman at CMS.
Provision
The provision would establish, for the first time, an upper payment limit for durable medical
equipment under the Medicaid program. Each state that pays for DME on a fee schedule basis
would not be able to pay more in the aggregate for DME than would be paid for such items under
222
See the most recent report CAO report: Tangita Daramola, Medicare Competitive Acquisition Ombudsman, Centers
for Medicare & Medicaid Services, 2011 Report to Congress, https://www.cms.gov/Medicare/Medicare-Fee-forService-Payment/DMEPOSCompetitiveBid/Downloads/CAO-2011-Report-to-Congress.pdf.
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Part B of the Medicare program (including what would be paid under the Medicare competitive
bidding program). Though the provision would specify an aggregate upper payment limit for
Medicaid DME spending in a state, as with other Medicaid upper payment limit restrictions, it
does not specify the actual amount paid by the state for the individual items, or whether those
payments would vary geographically within the state. The upper payment limit would be effective
for payments for items furnished on or after January 1, 2020. This provision would also require
the Medicare Ombudsman to evaluate the impact of the competitive acquisition program on
beneficiary health status and health outcomes, including its application to the Medicaid program.
Section 4002. Excluding Authorized Generics from Calculation of Average
Manufacturer Price
Background
Prescription drugs are an optional Medicaid benefit, but all states cover outpatient drugs.
Pharmaceutical manufacturers that voluntarily participate in Medicaid are required to pay rebates
to states on covered outpatient drugs, which help Medicaid receive manufacturers’ lowest or best
price.223 States then share the rebate they receive from pharmaceutical manufacturers with the
federal government.
Under the federal Medicaid law, Medicaid rebate calculations for brand name drugs have two
components, a basic rebate and an additional rebate. The basic rebate is the higher of a drug’s best
price compared to its quarterly AMP or 23.1% of the average manufacturer price (AMP).224 The
additional rebate is calculated by determining whether a drug’s price has increased faster than
inflation since it was first introduced to the market. The additional rebate is added to the basic
rebate to get a brand drug’s total rebate. Medicaid rebates for generic drugs have only a basic
rebate without an additional adjustment when prices rise faster than inflation.
Authorized generics are drugs that the original patent holder has licensed to a generic drug
manufacturer to sell at a negotiated, reduced price.225 It is argued that authorized generics raise
prices for consumers and reduce incentives for generic manufacturers to challenge brand name
drug patents. Including authorized generic sales with brand name drug sales has the effect of
lowering a product’s average manufacturer price (AMP), thereby decreasing manufacturers’
Medicaid rebate obligations for those products (both the basic and the additional rebate might be
decreased).226
223
For more information on Medicaid prescription drugs, see CRS Report R43778, Medicaid Prescription Drug
Pricing and Policy.
224
Average manufacturer price for a Medicaid-covered outpatient drug for a rebate period (calendar quarter) is the
average price paid to the manufacturer for the drug in the United States by (i) wholesalers for drugs distributed to retail
community pharmacies (RCPs); and (ii) RCPs that purchase drugs directly from drug manufacturers (SSA
§1927(k)(1)).
225
Code of Federal Regulations (CFR) 42 CFR §447.506, an authorized generic drug means any drug sold, licensed, or
marketed under an New Drug Application approved by the FDA under Section 505(c) of the Federal Food Drug and
Cosmetics Act; and marketed, sold, or distributed under a different labeler code, product code, trade name, trademark,
or packaging (other than repackaging the listed drug for use in institutions) than the brand drug.
226
The additional rebates also would increase if sales of authorized generics are excluded from the calculation of
brand-name drug AMPs.
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Provision
This proposal would require drug manufacturers to exclude sales of authorized generics from the
calculation of average manufacturer price for brand name drug products. By removing authorized
generic sales from the single source product’s AMP calculation, the AMP would be higher thus
increasing the amount of rebate owed by manufacturers on brand name drugs provided to
Medicaid beneficiaries. This provision would take effect on October 1, 2015.
Section 4003. Medicare Payment Incentive for the Transition from Traditional
X-Ray Imaging to Digital Radiography and Other Medicare Imaging Payment
Provision
Background
Currently, Medicare payments for services of physicians and certain non-physician practitioners,
including many imaging services, are made on the basis of a fee schedule. The Medicare
physician fee schedule (MPFS) assigns relative values to each of the approximately 7,500 service
codes that reflect physician work (i.e., the time, skill, and intensity it takes to provide the service),
practice expenses, and malpractice costs. The relative value for a service compares the relative
work involved in performing one service with the work involved in providing other physicians’
services. The scale used to compare the value of one service with another is known as a resourcebased relative value scale (RBRVS). The relative values are adjusted for geographic variation in
input costs. The adjusted relative values are then converted into a dollar payment amount by a
conversion factor.
The Centers for Medicare & Medicaid Services (CMS), which is responsible for maintaining and
updating the fee schedule, continually modifies and refines the methodology for estimating
relative value units (RVUs). The American Medical Association/Specialty Society Relative Value
Scale Update Committee (RUC) historically has provided advice and recommendations to CMS
to assist in these assessments. CMS is required to review the RVUs no less than every five years;
the ACA added the requirement that the Secretary periodically identify physician services as
being potentially misvalued, and make appropriate adjustments to the relative values of such
services under the Medicare physician fee schedule.
In determining adjustments to RVUs used as the basis for calculating Medicare physician
reimbursement under the fee schedule, the Secretary of Health and Human Services has authority
to adjust the number of RVUs for any service code to take into account changes in medical
practice, coding changes, new data on relative value components, or the addition of new
procedures. The Secretary of HHS is required to publish an explanation of the basis for such
adjustments. These adjustments are subject to a budget neutrality condition. With the exception of
certain expenditures that are exempt by statute, the adjustments may not cause the amount of
expenditures made under the MPFS to differ from year to year by more than $20 million from the
expenditures that would have been incurred without such an adjustment.
Following recommendations from the GAO and MedPAC, CMS established and implemented
multiple procedure payment reduction (MPPR) policies to adjust payment to more appropriately
reflect efficiencies gained when certain services are provided together, for example, when
multiple similar services are performed on the same patient during the same visit. These payment
reductions reflect efficiencies that typically occur in either the practice expense (PE) or
professional work component of the MPFS (or both) when services are furnished together.
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The MPPR amounts have varied across services and over time. For instance, in 2011, CMS
established a MPPR to the PE component of payment of select therapy services paid under the
MPFS, with payment for the second and subsequent services to be reduced 25%, similar to the
reduction applied to multiple surgical procedures and to diagnostic imaging procedures. The
American Taxpayer Relief Act (ATRA) increased that reduction from 25% to 50% beginning
April 1, 2013.
Provision
To incentivize the transition from traditional X-ray imaging to digital radiography in both
physicians’ offices as well as hospital outpatient departments, this provision would modify
Section 1848(b) of the Social Security Act (42 U.S.C. 1395w–4(b)) by adding special rules to (1)
limit the payment for film X-ray imaging services, and (2) provide incentives for the transition to
digital radiography.
Beginning in 2017 and in subsequent years, for both the technical component of the Medicare
physician fee schedule (MPFS) payment as well as the payment under the hospital outpatient
prospective payment system (OPPS), the Medicare payment for imaging services that are X-rays
taken using film would be reduced by 20%. For imaging services that are X-rays taken using
computed radiography technology (cassette-based imaging that uses an imaging plate to create
the image involved), the payment for the technical component would be reduced by 7% in the
years 2018–2022, and by 10% beginning in 2023 and in subsequent years. The Secretary could
use modifiers to implement this requirement under the MPFS. Payment reductions resulting from
the application of this provision would be exempt from the budget neutrality condition described
above relating to the MPFS.
The provision would eliminate the application of the multiple procedure payment reduction
policy to the professional component of imaging services for services provided on or after
January 1, 2016, and until the year in which the Secretary conducts and publishes, as part of the
MPFS Proposed Rule, the following empirical analysis. The Secretary would conduct and publish
an empirical analysis of the Resource-Based Relative Value Scale (RBRVS) Data Manager
information to determine what, if any, efficiencies exist within the professional component of
imaging services when two or more studies are performed on the same patient on the same day.
The empirical analysis would include the following: (1) work sheets and other information
detailing which physician work activities performed given the typical vignettes were assigned
reduction percentages of 0%, 25%, 50%, 75% and 100%; (2) a discussion of the clinical aspects
that informed the assignment of the reduction percentages; (3) an explanation of how the
percentage reductions for pre-, intra- and postservice work were determined and calculated; and
(4) a demonstration that CMS has consulted with practicing radiologists to gain knowledge of
how radiologists interpret studies of multiple body parts on the same individual on the same day.
Section 4004. Treatment of Infusion Drugs Furnished Through Durable
Medical Equipment
Background
Although most outpatient prescription drugs and biologics are covered under Medicare Part D,
Medicare covers certain drugs and biologics under Part B.227 Part B drugs and biologics include
227
Biologics generally are derived from living organisms rather than inorganic chemical compounds.
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drugs furnished incident to physician services, immunosuppressive drugs following a Medicarecovered organ transplant, erythropoietin for treatment of anemia for persons with ESRD, oral
anti-cancer drugs under certain conditions, and drugs furnished through DME. Generally,
Medicare reimburses physicians and other providers, such as hospital outpatient clinics, for Part
B drugs and biologics at 106% of the volume weighted average of the average sales price for all
drugs billed under the same billing code. Health care providers also receive a separate payment
for the administration of Part B drugs and biologics. Some Part B drugs and biologics such as
blood products, vaccines, and drugs and biologics furnished through an item of DME are
reimbursed differently. Drugs furnished through an item of DME, such as an infusion pump, are
reimbursed at 95% of the average wholesale price (AWP) of the drug in effect on October 1,
2003.228 Several reports have shown that AWP reimbursement methodology exceeds acquisition
costs for many drugs administered through DME.229 However, for infused insulin (furnished
through an infusion pump) the acquisition cost exceeded the Medicare payment by 50% during
the six quarters included in a recent OIG study.230
Provision
This provision would require CMS to reimburse DME suppliers for Medicare Part B infusion
drugs and biologicals furnished through DME on the basis of 95% of the current AWP beginning
on January 1, 2017 (rather than using the 2003 AWP as in current law).
Section 4005. Extension and Expansion of Prior Authorization for Power
Mobility Devices (PMDs) and Accessories and Prior Authorization Audit
Limitations
Background
The Medicare Supplementary Medical Insurance Program (Part B) currently covers a wide
variety of durable medical equipment (DME), including power wheelchairs and other power
mobility devices, if they are medically necessary and are prescribed by a physician. There is a
history of fraud and abuse associated with DME and particularly power mobility devices,231
wherein beneficiaries receive power mobility devices that are not medically necessary or
Medicare is charged for equipment that is never delivered. The Secretary has the authority to
require prior authorization for certain items of DME, or for DME sold by suppliers who, for
example, have a pattern of denied claims. In some cases, a supplier or a beneficiary may request
an advanced determination of coverage be made prior to delivery of the item and Medicare being
billed for the item.
228
SSA Sec. 1842(o)(1)(D). The average wholesale price of a drug is a commercially published reference price but not
an average price paid by purchasers or charged by wholesalers. AWP is considered a manufacturer’s suggested
wholesale price to retailers as listed in published drug industry compendia (not defined in statute or regulations).
229
HHS Office of the Inspector General, Part B Payments for Drugs Infused through Durable Medical Equipment
(OEI-12-12-00310), February 2013.
230
HHS Office of the Inspector General, Implementing OIG Recommendations Could Have Reduced Payments for
DME Infusion Drugs by Hundreds of Millions of Dollars (OEI-12-15-00110), April 2015.
231
Centers for Medicare & Medicaid Services (CMS), “Medicare Announces New Initiatives on Power Wheelchair
Coverage and Payment Policy,” press release, April 28, 2004, https://www.cms.gov/Newsroom/
MediaReleaseDatabase/Press-releases/2004-Press-releases-items/2004-04-28.html.
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Using demonstration authority, the Secretary established the Prior Authorization of Power
Mobility Devices (PMDs) Demonstration in 2012. The demonstration requires power mobility
devices in seven states232 to receive Medicare prior authorization before beneficiaries receive
equipment. The demonstration was extended to an additional 12 states233 in 2014.
CMS has indicated that it will end the demonstration on August 31, 2015.234 It includes all power
operated vehicles (scooters), the wheelchair bases (without accessories) for standard power
wheelchairs, and certain complex rehabilitative power wheelchairs. However, certain complex
rehabilitative power wheelchairs are excluded from the demonstration, specifically, chairs
categorized as Group 3, and which support the use of additional accessories requiring a power
source to operate.235
CMS administers the Medicare program through contracts with private entities that help CMS run
the day-to-day activities of Medicare, such as paying reimbursement claims, processing provider
and supplier enrollment applications. CMS contracts with several private organizations to assist
specifically with protecting the trust funds from making improper payments and to identify,
recover, and where appropriate prosecute, waste, fraud, and abuse. Recovery Audit Contractors
(RACs) are one such entity; RACs help CMS to identify and collect improper payments made in
Medicare’s fee-for-service (FFS) program. Other entities that assist CMS with waste, fraud, and
abuse oversight include Zone Program Integrity Contractors (ZPICs), Medicare Drug Integrity
Contractors (MEDICs), Comprehensive Error Rate Testing (CERT) contractors, and the
Supplemental Medical Review Contractor.
Provision
The provision would prohibit a DME claim from being subject to a RAC audit if the claim had
received either (a) a provisional affirmation under the Secretary’s advanced determination
authority, or (b) prior authorization under the Power Mobility Devices Prior Authorization
Demonstration. The DME claim would, however, still be subject to audits for potential fraud,
inappropriate utilization, changes in billing patterns, or for information that could have been
considered during an advanced determination.
Not later than 90 days after the date of enactment, the Secretary would be required to extend the
Power Mobility Device Prior Authorization Demonstration at least through August 31, 2018, and
begin to expand the demonstration, as appropriate, to include additional power mobility devices
and accessories, and expand the demonstration to additional states or geographic areas, as
appropriate.
The Secretary would be authorized to use Medicare Trust Funds and other funds available to the
Secretary as appropriate to fund the continuation and expansion of the Power Mobility Device
and Accessories Prior Authorization Demonstration.
232
The original seven states include California, Illinois, Michigan, New York, North Carolina, Florida, and Texas.
The 12 additional states include Maryland, New Jersey, Pennsylvania, Indiana, Kentucky, Ohio, Georgia,
Tennessee, Louisiana, Missouri, Washington, and Arizona.
234
For more information, see https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/
Medicare-FFS-Compliance-Programs/Medical-Review/PADemo.html.
235
For more information about the specific mobility devices included and excluded from the demonstration, see
https://www.cms.gov/Research-Statistics-Data-and-Systems/Monitoring-Programs/Medicare-FFS-CompliancePrograms/CERT/Downloads/Fact-Sheet-new-8112.pdf.
233
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Section 4006. Civil Monetary Penalties for Violations Related to Grants,
Contracts, and Other Agreements
Background
Title XI of the Social Security Act (SSA) identifies Medicare- and Medicaid-related anti-fraud
provisions, which impose penalties and exclusions from federal health care programs on
individuals and other entities that engage in certain types of misconduct.236 Under SSA Section
1128A, the Department of Health and Human Services Office of Inspector General (OIG) is
authorized to impose civil penalties and assessments on a person, including an organization,
agency, or other entity, who engages in various types of improper conduct with respect to federal
health care programs, including the imposition of penalties against a person who knowingly
presents or causes to be presented to a federal or state employee or agent certain false or
fraudulent claims.237 For example, penalties apply to services that were not provided as claimed,
or claims that were part of a pattern of providing items or services that a person knows or should
know are not medically necessary. In addition, certain payments made to physicians to reduce or
limit services are also prohibited. SSA Section 1128A provides for monetary penalties of up to
$10,000 for each item or service claimed, up to $50,000 under certain additional circumstances,
as well as treble damages.
Under SSA Section 1128, exclusion from federal health programs is mandatory under certain
circumstances, and permissive in others. Exclusions are mandatory for those convicted of certain
offenses, including (1) a criminal offense related to the delivery of an item or service under
Medicare, Medicaid, or a state health care program; (2) a criminal offense relating to neglect or
abuse of patients in connection with the delivery of a health care item or service; and (3) a felony
relating to the unlawful manufacture, distribution, prescription, or dispensing of a controlled
substance. OIG has permissive authority to exclude an entity or an individual from a federal
health program under a number of circumstances, including conviction of certain misdemeanors
relating to fraud, theft, embezzlement, breach of fiduciary duty, or other financial misconduct; a
conviction based on an interference with or obstruction of an investigation into a criminal
offense; and revocation or suspension of a health care practitioner’s license for reasons bearing on
the individual’s or entity’s professional competence, professional performance, or financial
integrity.
Provision
This provision would make any person (including an organization, agency, or other entity, but
excluding beneficiaries) who knowingly commits the following improper conduct related to
grants, contracts, or other agreements funded by the Department of Health and Human Services
subject to civil monetary penalties (CMPs):
1. knowingly presents or causes to be presented a specified claim that the individual knows
or should know was false would be subject, in addition to other penalties prescribed by
236
“Federal health care program” is defined as (1) any plan or program that provides health benefits, whether directly,
through insurance, or otherwise, which is funded directly, in whole or in part, by the United States Government [not
including health insurance provided to federal government employees] or (2) any state health care program, as defined
in Section 1128(h). Federal health care programs include Medicare and Medicaid.
237
Civil penalties do not apply to beneficiaries under SSA Section 1128A; a beneficiary is defined as an individual who
is eligible to receive items or services for which payment may be made under a federal health care program, but
excludes any providers, suppliers, or practitioners.
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law, to CMPs of up to $10,000 for each specified claim (in addition, individuals
determined to have presented these specified claims would also be subject to assessments
of up to three times the amount of the specified claim in lieu of damages sustained by the
United States or a specified state agency);
2. knowingly makes, uses or causes to be made or used a false statement, omission, or
misrepresentation of a material fact in an application, proposal, bid, progress report, or
other document required to receive or retain funding for HHS funded grants, contracts, or
other agreements would be subject, in addition to other penalties prescribed by law, to
CMPs of up to $50,000 for each false statement, omission, or misrepresentation of
material fact (in addition, individuals determined to have made, used, or caused to be
made these false or fraudulent specified claims would also be subject to assessments of
up to three times the total amount of the funds or property obligated to the Secretary in
lieu of damages sustained by the United States or a specified state agency);
3. knowingly makes, uses, or causes to be made or used a false record or statement material
to a false or fraudulent specified claim under an HHS funded grant, contract, or other
agreement would be subject, in addition to other penalties prescribed by law, to CMPs of
up to $50,000 for each false record or statement (in addition, individuals determined to
have made, used, or caused to be made these false or fraudulent specified claims would
also be subject to assessments of up to three times the amount of the specified claim in
lieu of damages sustained by the United States or a specified state agency);
4. knowingly makes, uses, or causes to be made or used, a false record or statement material
to an obligation to pay or transmit funds or property to the HHS Secretary (the Secretary)
or knowingly conceals or knowingly and improperly avoids or decreases an obligation to
pay or transmit funds or property related to an HHS funded grant, contract, or other
agreement would be subject, in addition to other penalties prescribed by law, to CMPs of
up to $50,000 for each false record or statement or $10,000 for each day that the
individual knowingly conceals or knowingly and improperly avoids or decreases an
obligation to pay (in addition, individuals determined to have made, used, or caused to be
made these false or fraudulent specified claims would also be subject to assessments of
up to three times the total amount of the funds or property obligated to the Secretary in
lieu of damages sustained by the United States or a specified state agency); and
5. fails to grant timely access, upon reasonable request (as defined in regulations
promulgated by the Secretary), to the OIG for conducting audits, investigations,
evaluations, or other statutory functions related to grants, contracts, and other agreements
with HHS would be subject, in addition to other penalties prescribed by law, to CMPs of
up to $15,000 for each day of the failure to grant timely access.
In addition to CMPs, this provision would authorize the Secretary to exclude individuals found to
have knowingly committed the improper conduct related to HHS-funded grants, contracts, and
other agreements from participation in federal health care programs and to direct state agencies
also to exclude these individuals from state health programs. Under this provision the Secretary
would be subject to SSA Section 1128A(c), (d), and (g) provisions.
This provision would also authorize the Secretary to retain the CMPs and assessments recovered
as a result of this provision and to use those amounts to reimburse the cost of conducting
investigations and audits of individuals with HHS-funded grants, contracts, or other agreements
and also to monitor related compliance plans that result when CMPs or assessments under this
provision are ordered by courts, voluntarily agreed to by the payer, or otherwise. The Secretary
would be required under this provision to deposit funds from CMPs and assessments as credits to
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the appropriations from which they were originally paid or to appropriations for similar purposes
currently available. These appropriations would be available for obligation for one year from the
date of deposit.
This provision would identify the following terms applicable to SSA Section 1128A(o), (p), (q)
and (r):
1. Department would mean the Department of Health and Human Services.
2. Material would mean having a natural tendency to influence, or be capable of
influencing, the payment or receipt of money or property.
3. Other agreement would include a cooperative agreement, scholarship, fellowship, loan,
subsidy, payment for a specified use, donation agreement, award, or sub-award
(regardless of whether one or more of the persons entering into the agreement was a
contractor or subcontractor).
4. Program beneficiary would mean, in the case of grant, contract, or other agreement
designed to accomplish the objective of awarding or otherwise furnishing benefits or
assistance to individuals and for which the Secretary provides funding, an individual who
applies for, or who receives, such benefits or assistance from a grant, contract, or
agreement. Program beneficiary would not include, with respect to a grant, contract, or
other agreement, an officer, employee, or agent of an individual or entity that receives an
HHS-funded grant or enters into a contract or other agreement.
5. Recipient includes a sub-recipient or subcontractor.
6. Specified claim means any application, request, or demand under a grant, contract, or
other agreement for money or property, whether or not the United States or a specified
state agency has title to the money or property, that is not a claim [under SSA Section
1128A(i)(2), claim is defined as an application for payments for items and services under
a federal health care program] and that (A) was presented or caused to be presented to an
officer, employee, or agent of HHS or any specified state agency; or (B) was made to a
contractor, grantee, or any other recipient if the money or property was to be spent or
used on HHS’s behalf or to advance an HHS program or interest, and if HHS provides or
has provided any portion of the money or property requested or demanded; or will
reimburse the contractor, grantee, or other recipient for any portion of the money or
property which is requested or demanded.
7. Specified state agency means an agency of state government established or designated to
administer or supervise the administration of a grant, contract, or other agreement funded
in whole or in part by the Secretary.
In addition, the term obligation as used in this provision would mean an established duty, whether
fixed or not fixed, arising from an express or implied contractual, grantor-grantee, or licensurelicensee relationship, for a fee-based or similar relationship, from statute to regulation, or from
the retention of any overpayment.
This provision also would contain the following conforming amendments:
1. by (A) adding “specified claims” to “claims” in SSA Section 1128A(d), and (B) by
adding “specified claims” to “claims” in SSA Sec. 1128A(e),
2. by inserting in SSA Section 1128A(f), “or specified claims”, “or, with respect to a person
described in subsection (o), the person”, and “that are not received by OIG under
subsection (q) as reimbursement.” As well as by inserting “(or, in the case of a penalty or
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assessment under subsection (o), by a specified State agency (as defined in subsection
(r)(7))”.
Subtitle B—Other Reforms
Section 4041. SPR Drawdown
Background
The Strategic Petroleum Reserve (SPR) was authorized by Congress as part of the Energy Policy
and Conservation Act of 1975 (42 U.S.C. 6241) (EPCA). Congress authorized the SPR as a
response to rising oil prices and petroleum product shortages related to the oil embargo
established against the United States, the Netherlands, and Canada by the Organization of the
Arab Petroleum Exporting Countries (OAPEC). The SPR is authorized to hold up to 1 billion
barrels of oil, although it currently holds 691 million barrels.
The OAPEC embargo also fostered the creation of the International Energy Agency (IEA). The
IEA was established to enable oil-importing nations to develop plans and measures for emergency
responses to energy crises. IEA member countries, including the United States, are committed to
maintaining oil stocks (inventories) equivalent to 90 days of their prior year’s net imports,
developing programs for demand restraint in the event of emergencies, and agreeing to participate
in the allocation of oil deliveries to a shortage among IEA members.238
The President may authorize an SPR drawdown upon determining that a severe oil supply
interruption exists nationally, or internationally, or is imminent. Under this criterion, drawdowns
took place after Hurricane Katrina in 2005, and after the rebellion in Libya in 2011. The Secretary
of Energy also has limited authority to release oil from the SPR for a test drawdown, most
recently in 2014.
Provision
The provision calls upon the Secretary of Energy to drawdown and sell 4 million barrels of oil in
FY2018, 5 million barrels in FY2019, 8 million barrels in FY2020 and FY2021, 10 million
barrels in FY2022, and 15 million barrels in each of FY2023 through FY2025. The SPR sales are
to occur unless the drawdowns would result in remaining stocks of less than 90 days of
emergency reserves. While this requirement ensures a flow of funds to the U.S. Treasury, the
actual amount is not predictable. The revenue earned from a drawdown is the product of the
quantity of oil times the price of that oil. Oil in the reserve is of many types and quality levels, as
determined by viscosity and sulfur content. It is difficult to specify in advance what grade of oil
would actually be drawn down under the provision, or in an emergency. Maintaining different
grades of crude oil in the SPR allows for flexibility in meeting emergency requirements. Also,
each grade of crude oil has its own price based on the relative demand for each type of crude oil
based on market conditions. These prices cannot be accurately forecasted.
Using the IEA criterion of 90 days of net import replacement, today the United States exceeds the
requirement. In 2014, the United States had net imports of crude oil and petroleum products of 5
million barrels per day. With the SPR holding 691 million barrels, this implies the equivalent of
138 days of import replacement is currently held. However, if the term net imports is limited to
238
See CRS Report R42460, The Strategic Petroleum Reserve: Authorization, Operation, and Drawdown Policy.
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only crude oil, U.S. imports in 2014 were 7 million barrels per day, yielding 98 days of import
replacement.239
Whether these import replacement levels will be greater, or lesser, from FY2018 to FY2025 is
unknown. It is uncertain how high domestic production of crude oil, as well as consumption, will
be from FY2018 through FY2025. Domestic crude oil production depends on the longevity of
light tight oil fields, which have accounted for all the growth in U.S. production, and the price of
oil, which determines the financial viability of oil development and production. Domestic oil
consumption depends on consumer income levels, petroleum product prices, and regulations on
fuel economy standards, as well as other factors.
Subtitle C—Miscellaneous
Section 4061. Lyme Disease and Other Tick-Borne Diseases
Backround
The Secretary is given broad and general authority to conduct research related to disease under
Title III of the PHSA. Specifically, the Secretary is required to conduct research, investigations,
experiments, demonstrations, and studies relating to the causes, diagnosis, treatment, control, and
prevention of disease.240
Provision
The provision would add to Title III of the PHSA a new Part W, Lyme Disease and Other TickBorne Diseases, with new Sections 399OO (Research), 399OO-1 (Working Group), and 399OO-2
(Strategic Plan). No additional funds would be authorized to carry out Section 4081; the section
would have to be carried out using funds otherwise available for this purpose.
New PHSA Section 399OO would require the Secretary to conduct epidemiological, basic,
clinical, and translational research on Lyme and other tick-borne diseases. It would also require
the Secretary to include information about this research, and progress in improving the outcomes
of Lyme and other tick-borne diseases, in the biennial report of the Director of the National
Institutes of Health.241
New PHSA Section 399OO-1 would require the Secretary to establish a permanent interagency
working group (the Working Group) to review all efforts within HHS that relate to Lyme and
other tick-borne diseases in order to coordinate and minimize overlap of the efforts, and look at
research priorities. The section describes requirements related to the Working Group’s
membership, responsibilities, meeting frequency, and reporting. The Working Group would be
subject to the Federal Advisory Committee Act (FACA).
New PHSA Section 399OO-2 would require the Secretary, not later than three years after
enactment and every five years thereafter, to submit to Congress a strategic plan for Lyme and
other tick-borne disease research. This strategic plan would be informed by the Working Group’s
239
The United States imports crude oil, which is refined into petroleum products and exported, leading to a lower value
for net imports of crude oil and petroleum products.
240
PHSA Section 301 et seq.; 42 U.S.C. §241 et seq.
241
The biennial report of the NIH Director is required by PHSA Section 403, “Biennial Reports of Director of NIH”
(42 U.S.C. §283).
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summary of research in this area and would include, among other things, a plan to improve
outcomes, diagnosis, treatment, and prevention of Lyme and other tick-borne diseases.
Section 4062. Outreach to Historically Black Colleges and Universities
Provision
The provision would require the Secretary of HHS to ensure that health professionals from
underrepresented populations—such as those at historically black colleges and universities,
Hispanic-serving institutions, Native American colleges and rural colleges—are aware of research
opportunities under this legislation.242
242
Amendment 8 (Jackson Lee) to H.R. 6 added Sec. 4062; it was approved by voice vote.
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Appendix A. Guidance, Reports, and
Regulations/Rulemaking That H.R. 6
Would Require
Table A-1. Guidance, Reports, and Regulations/Rulemaking That H.R. 6
Would Require
(H.R. 6, as passed by the House on July 10, 2015.)
Section
Guidance
Sec. 1002. Prize Competitions
Reporta
X
Sec. 1022. Increasing accountability at the National Institutes of Health.
IOM
Sec. 1023. Reducing administrative burdens of researchers.
X
Sec. 1042. Report.
X
Sec. 1121. Clinical trial data system.
GAO
Sec. 1122. National Neurological Diseases Surveillance System.
X
Sec. 1124. Accessing, sharing, and using health data for research purposes.
X
Sec. 1141. Council for 21st Century Cures.
X
Sec. 2001. Development and use of patient experience data to enhance structured
risk benefit assessment framework.
X
Sec. 2021. Qualification of drug development tools.
X
Sec. 2041. Precision medicine guidance and other programs of Food and Drug
Administration.
X
Sec. 2061. Broader application of Bayesian statistics and adaptive trial designs.
X
Sec. 2062. Utilizing evidence from clinical experience.
X
Sec. 2063. Streamlined data review program.
X
Sec. 2083. Finalizing draft guidance on expanded access.
X
Sec. 2102. Facilitating responsible communication of scientific and medical
developments.
X
Sec. 2121. Approval of certain drugs for use in a limited population of patients.
X
Sec. 2122. Susceptibility test interpretive criteria for microorganisms.
X
X
Sec. 2123. Encouraging the development and use of new antimicrobial drugs.
X, GAO
Sec. 2142. Review of processes and consistency of ACIP recommendations.
X
Sec. 2152. Reauthorization of rare pediatric disease priority review voucher
incentive program.
GAO
Sec. 2181. Enhancing combination products review.
X
Sec. 2201. Priority review for breakthrough devices.
X
Sec. 2221. Third-party quality system assessment.
X
Sec. 2223. Training and oversight in least burdensome appropriate means concept.
X
Sec. 2224. Recognition of standards.
X
Sec. 2227. Humanitarian device exemption application.
X
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X
X
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Section
Sec. 2228. CLIA waiver study design guidance for in vitro diagnostics.
Guidance
Reporta
X
Sec. 2242. Applicability and inapplicability of regulation.
X
Sec. 2261. Protection of human subjects in research; applicability of rules.
X
Sec. 2262. Use of non-local institutional review boards for review of investigational
device exemptions and human device exemptions.
X
X
X
Sec. 2285. Hiring authority for scientific, technical, and professional personnel.
X
X
X
X
Sec. 2281. Silvio O. Conte Senior Biomedical Research Service.
Sec. 3001. Ensuring interoperability of health information technology.
Rule
X
X
Sec. 3141. Programs to prevent prescription drug abuse under Medicare parts C
and D.
X
X
Sec. 4081. Lyme disease and other tick-borne diseases.
X
Source: Compiled by CRS from H.R. 6, the 21st Century Cures Act, House Committee on Rules Committee
Print 114-22.
a. Unless otherwise noted, the Department of Health and Human Services would be responsible for these
reports. In some cases, such as Sec. 1002, multiple reports would be required.
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Appendix B. List of Abbreviations
ACA
Patient Protection and Affordable Care Act (P.L. 111-148)
ACIP
Advisory Committee on Immunization Practices
ASC
Ambulatory Surgical Centers
ATRA
American Taxpayer Relief Act of 2012 (P.L. 112-240)
AWP
Average Wholesale Price
BBEDCA
Balanced Budget and Emergency Deficit Control Act of 1985 (P.L. 99-177)
CAC
Carrier Advisory Committees
CAN
Cures Acceleration Networks
CAO
Competitive Acquisition Ombudsman
CDC
Centers for Disease Control and Prevention
CFR
Code of Federal Regulations
CLIA
Clinical Laboratory Improvement Amendments
CMS
Centers for Medicare & Medicaid Services
COW
Certificate of Waiver
DME
Durable Medical Equipment
EPCA
Energy Policy and Conservation Act of 1975 (P.L. 94-163)
FACA
Federal Advisory Committee Act (P.L. 92-463)
FDA
Food and Drug Administration
FDAAA
Food and Drug Administration Amendments Act of 2007 (P.L. 110-85)
FDASIA
The Food and Drug Administration Safety and Innovation Act of 2012 (P.L. 112-144)
FDP
Federal Demonstration Partnership
FFDCA
Federal Food, Drug, and Cosmetic Act (P.L. 75-717)
FFS
Fee for Service
GAO
Government Accountability Office
GSA
General Services Administration
HCPCS
The Health Care Common Procedure Coding System
HDE
Humanitarian Device Exemption
HHS
Department of Health and Human Services
HIPAA
Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191)
HITECH
Health Information Technology for Economic and Clinical Health (P.L. 111-5, Division A, Title XIII
and Division B, Title IV)
IACUC
Institutional Animal Care and Use Committee
IC
Institutes and Centers
IEA
International Energy Agency
IND
Investigational New Drug
IRB
Institutional Review Board
LCD
Local Coverage Determinations
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LPAD
Limited Population Antibacterial Drug
MA
Medicare Advantage
MAC
Medicare Administrative Contractors
MAPD
Medicare Advantage Prescription Drug
MDIC
Medicare Drug Integrity Contractors
MedPAC
Medicare Payment Advisory Commission
MMA
Medicare Prescription Drug, Improvement, and Modernization Act (P.L. 108-173)
MPFS
Medicare Physician Fee Schedule
MPPR
Multiple Procedure Payment Reduction
MTM
Medication Therapy Management
NCATS
National Center for Advancing Translational Sciences
NCD
National Coverage Decisions
NDA
New Drug Application
NIH
National Institutes of Health
NPRN
National Pediatric Research Network
NVP
National Vaccine Program
OAPEC
Organization of the Arab Petroleum Exporting Countries
OECD
Organisation for Economic Co-operation and Development
OIG
Office of Inspector General
OIRA
Office of Information and Regulatory Affairs
OMB
Office of Management and Budget
OMO
Office of Medicare Ombudsman
OMS
Overutilization Monitoring System
ONC
Office of the National Coordinator for Health Information Technology
OPPS
Outpatient Prospective Payments
OT
Other Transaction
PDP
Prescription Drug Plans
PE
Practice Expense
PHSA
Public Health Service Act (P.L. 78-410)
PRA
Paperwork Reduction Act of 1980 (P.L. 104-13)
RBRVS
Resource-Based Relative Value Scale
RUC
American Medical Association/Specialty Society Relative Value Scale Update Committee
RVU
Relative Value Units
SPR
Strategic Petroleum Reserve
SSA
Social Security Act (P.L. 74-271)
USC
United States Code
VCF
Vaccines for Children Program
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Author Contact Information
Judith A. Johnson, Coordinator
Specialist in Biomedical Policy
[email protected], 7-7077
Sarah A. Lister
Specialist in Public Health and Epidemiology
[email protected], 7-7320
Susan Thaul, Coordinator
Specialist in Drug Safety and Effectiveness
[email protected], 7-0562
Paulette C. Morgan
Specialist in Health Care Financing
[email protected], 7-7317
Erin Bagalman, Coordinator
Analyst in Health Policy
[email protected], 7-5345
Robert Pirog
Specialist in Energy Economics
[email protected], 7-6847
Matthew B. Barry
Section Research Manager
[email protected], 7-0556
C. Stephen Redhead
Specialist in Health Policy
[email protected], 7-2261
Cliff Binder
Analyst in Health Care Financing
[email protected], 7-7965
Bernice Reyes-Akinbileje
Analyst in Health Resources and Services
[email protected], 7-2260
Jim Hahn
Specialist in Health Care Financing
[email protected], 7-4914
Amanda K. Sarata
Specialist in Health Policy
[email protected], 7-7641
Elayne J. Heisler
Specialist in Health Services
[email protected], 7-4453
Jennifer A. Staman
Legislative Attorney
[email protected], 7-2610
Suzanne M. Kirchhoff
Analyst in Health Care Financing
[email protected], 7-0658
Scott R. Talaga
Analyst in Health Care Financing
[email protected], 7-5956
Acknowledgments
Kirsten Colello, Specialist in Health and Aging Policy; Agata Dabrowska, Analyst in Health Policy; and
LaTiesha Cooper, Research Assistant, in the Domestic Social Policy Division of CRS, provided support for
this report.
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