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WHY BRENDA FITZGERALD HAD TO RESIGN — The now former CDC chief had been grappling with financial conflicts for months that prevented her from working on key health issues and were exactly the kind of distractions that new HHS Secretary Alex Azar vowed to eliminate.
But the report that she had bought tobacco stock after she started at the CDC — scooped by POLITICO on Tuesday night — appeared to be the last straw.
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— Why Fitzgerald's situation was untenable. In recent weeks, Azar specifically told associates that he'd take a hard line on any ethical problems in the department, and pledged to lawmakers and the White House that his agency would be far more businesslike in advancing the GOP’s health priorities than it was during ex-HHS Secretary Tom Price’s era. Fitzgerald’s lingering problem with an ethics recusal — she wouldn’t do work on cancer detection or some aspects of the opioid crisis — posed enough of a problem for the CDC.
And as a former Georgia public health official who was close with Price, Fitzgerald had already lost influence within the department following his ouster. No one came to her defense -- even HHS's early statements didn't completely lay out the case that she made to the Wall Street Journal on Wednesday: that she didn't know her broker had made the purchase on her behalf. It's yet another sign that Fitzgerald didn't have enough allies to help her survive.
Keep reading: More.
— PULSE CHECK: How POLITICO got the story and what's next. Three of the reporters — Sarah Karlin-Smith, Brianna Ehley and Jennifer Haberkorn — share their reporting process and discuss the fallout from Fitzgerald's resignation. Listen here.
— MEANWHILE: How Azar's viewing HHS. It's a turnaround job, according to multiple people familiar with his thinking. The new HHS secretary has tasked his chief of staff, Peter Urbanowicz, and deputy chief of staff Brian Harrison with a top-to-bottom evaluation to identify problem areas.
Urbanowicz specifically has private-sector experience directing the restructurings of troubled health care organizations. “Peter is the kind of person that can really help make the trains run on time,” Federation of American Hospitals President Chip Kahn said.
** A message from PhRMA: How much are hospitals marking up medicine prices? According to new Moran Company analysis, hospitals mark up medicine prices nearly 500 percent. The analysis of 20 medicines also found a hospital is paid 2.5 times what the biopharmaceutical company, who brought the medicine to market, receives. http://onphr.ma/2ncD6qD **
WHAT HAPPENED TO THE MEDICARE ADVANTAGE RATE NOTICE? – Yesterday was the deadline for CMS to release proposed 2019 Medicare Advantage payment policies. Insurers were fully expecting it to drop after the close of business, kicking off a two-month lobbying rush to influence changes to the $200 billion per year program. But nothing materialized from CMS, mystifying insurers, investors and lobbyists.
So what happened? CMS didn't respond to inquiries from POLITICO's Paul Demko seeking answers. But speculation focused on the role of new HHS Secretary Alex Azar, who was just sworn into office on Monday. “Word around the campfire is that Azar is holding it for a day to review,” said insurance consultant John Gorman.
HOSPITALS SPLIT OVER DRUG DISCOUNT PROGRAM — While the largest hospital lobbying group is fighting to protect the 340B program, some systems are breaking rank and telling Congress they want more transparency in how the program's $6 billion in discounts are being used.
— Why one system disagrees with the American Hospital Association: Piedmont Healthcare, an eight-hospital system in Atlanta that doesn't belong to the AHA, is asking lawmakers to ensure discounts from drugmakers go to helping needy patients.
Piedmont's worry: that hospitals already serving needy patients "are not put at a competitive disadvantage" by hospitals that pocket the discounts, according to a Piedmont letter to House Energy and Commerce Committee Chairman Greg Walden obtained by POLITICO's David Pittman. That's a message that a number of other hospitals have quietly shared, too.
The AHA's top lobbyist, Tom Nickels, told the House E&C Committee in December he’d be open to further transparency in 340B. “However, transparency requirements should not place an excessive burden on already over-regulated hospitals, should not result in harm to any 340B hospitals or the communities they serve, and should correlate with additional transparency from drug manufacturers,” an AHA spokesperson added this week.
THIS IS PULSE — Tips to ddiamond@politico.com or @ddiamond on Twitter.
With help from Renuka Rayasam (@RenuRayasam), Paul Demko (@PaulDemko), Sarah Karlin-Smith (@SarahKarlin), Adam Cancryn (@AdamCancryn), Luis Sanchez (@_luissanchez1), Brianna Ehley (@briannaehley), David Pittman (@David_Pittman) and Jennifer Haberkorn (@JenHab).
New! Pulse: State Health Care Newsletter — Starting Feb. 9, 2018, Pulse: State Health Care is a weekly newsletter for POLITICO Pro customers with a focus on health policy in the states. Our newsletter expands coverage to include critical policy intelligence on waivers, and decision-making in state capitols. Sign up today.
HHS officials considered dangerous method to reverse undocumented teen’s abortion. Scott Lloyd, who heads the HHS’ Office of Refugee Resettlement, told the ACLU during a December deposition that he and other HHS officials had considered forcing a 17-year old girl from El Salvador to take progesterone after learning she was midway through the two-step process, VICE News reported.
— What happened: The girl, who was being held in San Antonio, had taken the first dose of medicine used to induce abortion when officials from ORR, responsible for the care of undocumented minors that arrive without their parents, learned about the procedure, according to an internal March 6 memo obtained by POLITICO last year. She was scheduled to take the second and final dose of the medication the next day to complete the abortion, but ORR officials intervened to confirm that the fetus still had a heartbeat, according to the memo. It was then that Lloyd and other officials discussed whether she should take progesterone to reverse the abortion.
— What outside organizations say: The American Congress of Obstetricians and Gynecologists has called the practice “unethical” and “dangerous,” saying there’s no scientific evidence that administering progesterone in the midst of a two-step non-surgical abortion can reverse the outcome.
The ACLU tells POLITICO that ultimately ORR did not force the girl to take progesterone and she was allowed to continue with the abortion. ORR officials have tried to stop other undocumented girls from getting abortions, but this is the only case ACLU is aware of in which they considered using the method to halt a procedure already under way.
Senate Democrats ask GAO to probe Trump's opioid response. A group of Senate Democrats are asking the GAO to investigate actions the Trump administration has taken under its public health emergency declaration for the opioids crisis. POLITICO's Brianna Ehley reported last month that very little has been accomplished three months into the declaration, which the administration extended last week -- one day before it would have expired.
The president hasn’t proposed new funding to fight the crisis and has left vacant key leadership positions at the White House's drug policy office and DEA. The Democrats, in a letter, asked the GAO to review what authority the administration was given under the declaration and whether or not that authority was used and to what scale. They also want to know how much of the Public Health Emergency Fund had been accessed for opioids. An HHS spokesperson told POLITICO the fund has about $57,000 and the president has not asked Congress to replenish it. Read the letter.
Sessions announces DEA 'surge' to fight prescription drug diversion. The DEA will further empower three of its divisions to go after pharmacies and prescribers dispensing unusual amounts of prescription drugs, Attorney General Jeff Sessions announced on Tuesday.
The DEA will collect and analyze data from the approximately 80 million transaction reports it collects every year — which include distribution figures and prescription drug inventories — to identify any patterns or outliers the agency can use to go after offenders. The surge will take place over the next 45 days and will help make more arrests and convictions that will reduce the number of opioids available for Americans to get addicted to, Sessions said.
FIRST IN PULSE: Generics lobby's message to Trump: Follow through on your State of Union pledge. The Association of Accessible Medicines sent a letter to the president on Wednesday praising his commitment to lower drug prices and urging him to help pass the bipartisan CREATES Act — H.R. 2212 (115) and S. 974 (115) — POLITICO's Sarah Karlin-Smith scoops.
The bill would make it harder for branded and generic drug companies to use FDA safety programs known as REMS to block cheaper competition from generic and biosimilar medicines. It has been floated as a pay-for if Congress can get a deal to pass a new spending bill. The branded drug lobby opposes the bill. Both FDA Commissioner Scott Gottlieb and HHS Secretary Alex Azar have criticized the use of REMS to block generic drug competition. Read the letter.
FIRST IN PULSE: Patient advocacy groups call for hearings on biosimilars. Patients for Biologics Safety & Access — a coalition that includes the Arthritis Foundation, the Crohn’s & Colitis Foundation of America and 18 other groups — is calling for Congress to convene oversight hearings on biosimilar drugs for the first time under the Trump administration.
“As more biosimilars come to market, it is critical that Congress ensure that the FDA is prioritizing patient safety through its guidance, approvals, education and post-market surveillance,” Larry LaMotte of the Immune Deficiency Foundation and lead coordinator of PBSA said in a statement.
See the group's letter to the Senate HELP Committee: More for Pros. The letter to the House E&C Committee: More for Pros.
Threading the needle on requiring health workers to get flu vaccines. A pediatrician and two lawyers write in the New England Journal that while flu-vaccination mandates for health care workers represent good policy, hospitals should avoid “heavy-handed, context-free implementation” of them.
The authors, University of Washington pediatrician Douglas Opel and Stanford attorneys James Sonne and Michelle Mello, were writing in response to a series of cases brought to the Equal Employment Opportunity Commission. The EEOC in January settled a lawsuit it brought against Mission Hospital system in North Carolina over its denial of employee requests for religious exemptions from the flu shot.
— The legal wrinkles: While the definition of “religion” as opposed to “philosophical” beliefs is muddy in some of the cases, health care systems should tread lightly, taking into account legality and also the potential for harm, the authors argue. They cite another case brought by an unvaccinated staff member who had been required to wear a mask at all times—although the employee was neither sick nor in direct contact with patients.
“Hospitals that pursue an inflexible approach to minimize religious exemptions are likely to find that the juice isn’t worth the squeeze,” the authors write. “In contrast, well-drafted and reasonably applied policies should avoid or withstand legal challenge, while also protecting patients.”
Tanisha Carino now running Milken Institute's FasterCures. Carino recently joined the institute after leading U.S. policy initiatives for GlaxoSmithKline and previously spent more than a decade with Avalere Health.
By Paul Demko
New research suggests that the Zika virus may not be alone in spreading from mother to fetus, reports STAT’s Andrew Joseph. More.
The Trump administration’s efforts to torpedo critical programs that help women avoid unwanted pregnancies are cruel and stupid, argues New York Times columnist Gail Collins. More.
Kansas added work requirements to its welfare program in 2011, similar to what many states are proposing for their Medicaid programs. What happened? People dropped out of welfare, but remained in deep poverty, reports Governing’s J.B. Wogan. More.
Reducing health care costs doesn’t require help from a trio of billionaires, argues Los Angeles Times columnist Michael Hiltzik. Instead, look at how other countries have achieved better outcomes at a lower cost. More.
Studies suggest there’s been an increase in pregnant women using marijuana, but the drug poses a significant risk to fetuses, reports Sarah Varney for Kaiser Health News. More.
** A message from PhRMA: According to new analysis from the Moran Company, hospitals mark up medicine prices, on average, nearly 500 percent. The analysis of 20 medicines also found a hospital is paid 2.5 times what the biopharmaceutical company, who brought the medicine to market, receives. While hospital markups lead to higher costs for patients, employers and payers, these markups are often overlooked in conversations about medicine costs. As the provider market continues to become more concentrated and the number of medicines being administered in hospital-owned facilities is growing, the amount hospitals mark up medicine prices needs greater scrutiny. http://onphr.ma/2ncD6qD **