Coronavirus Notebook: BARDA Contracting Scrutiny; Part D Cost Sharing

Dispatches from a world turned upside down covering a possible US government investigation into BARDA contracting practices and Medicare Part D plans waiving cost sharing for COVID-19 treatments.

HHS Inspector General Weighing Review Of BARDA Contract Awards

The US Health and Human Services Office of Inspector General is considering whether to move ahead with a review of BARDA's procedures for rewarding research and development contracts, OIG Principal Deputy Inspector General Christi Grimm told lawmakers this week at a House Committee on Oversight and Reform briefing on OIG’s coronavirus oversight work.

Grimm said the OIG is “discussing internally” whether to move ahead with this work in response to questions from Rep. Katie Porter, D-CA, Porter raised concerns that the agency’s funding decisions were influenced by political connections and drug industry lobbying at the expense of scientific merit, given recently ousted head Rick Bright’s whistleblower complaint. (Also see "Beyond COVID-19: Ousted BARDA Chief’s Whistleblower Complaint Suggests Widespread Politicization of HHS Funding Decisions" - Pink Sheet, 5 May, 2020.)

Grimm explained the project currently in discussion would look at the award procedures for research and development contracts that used BARDA appropriations from fiscal year 2017 through May 2020. An HHS OIG spokesperson told the Pink Sheet there is no specific timeline by which OIG must decide whether to move ahead with this work, but that it would publicly update its work plan when it made its final determination.

Such a review would likely lead to oversight of much of the government’s coronavirus therapeutics and vaccine funding, given the large amount of resources already given out by BARDA for COVID-19.

Bright’s whistleblower complaint filed in early May contains accusations of political interference in BARDA’s scientific process dating back to 2017 and points to HHS Assistant Secretary for Preparedness and Response Robert Kadlec, the direct supervisor of the BARDA director, as creating an environment that let this interference take place.

Bright also raised concerns that other ASPR funding programs, including one called ASPR Next, were being used “to circumvent” BARDAs funding criteria, but then contracts were being transferred to BARDA. At the House Oversight briefing, Rep. Porter pressed the HHS OIG to look at the role of ASPR Next and other funding streams that may have created “lower barriers for entry,” and may be wasting taxpayer dollars.

Medicare Part D Plans May Waive Cost Sharing For COVID-19 Drugs

Medicare Part D plans will be permitted to waive beneficiary cost sharing for covered drugs that they determine have medically accepted indications for fighting COVID-19 during the public health emergency, the Centers for Medicare and Medicaid Services told plan sponsors in guidance released 22 May.

“Sponsors may fully or partly waive enrollee copays, deductibles, and coinsurance for covered Part D drugs that are determined to have a medically accepted indication for COVID-19…and may choose to waive cost sharing only for those beneficiaries taking such a covered Part D drug for the COVID-19 indication,” the guidance states.

Drugs with medically accepted indications for COVID-19 would include those with FDA approved indications or those with off-label indications that are supported by one of three Medicare-recognized medical compendia, the guidance notes. The cost sharing waiver does not have to be applied uniformly for all drugs with COVID-19 uses but must apply equally to similarly situated beneficiaries.

It’s unclear what drugs the new flexibility would apply to because some of the higher profile candidates like Gilead Sciences Inc.’s remdesivir are infused agents and not covered by the outpatient drug benefit. Hydroxychloroquine is one drug that could benefit. (Also see "Building A Bridge To A COVID-19 Vaccine: Hydroxychloroquine And BCG Lead Prevention Pipeline" - Pink Sheet, 17 May, 2020.)

A number of other currently marketed Part D drugs are being evaluated for treatment of COVID-19, such as Novartis AG’s Jakafi (ruxolitinib), AstraZeneca PLC's Farxiga (dapagliflozin), AbbVie Inc.’s Kaletra (lopinavir/ritonavir), Eli Lilly & Co.’s Olumiant (baracitinib), Karyopharm Therapeutics Inc.'s Xpovio (selinexor), Pfizer Inc.’s Xeljanz (tofacitinib) and AstraZeneca’s Calquence (acalbrutinib).

Plans can waive cost sharing during the balance of 2020 even though the concession would be inconsistent with approved 2020 bids and plan benefit packages, the agency said. Normally, plans are not allowed to make mid-year changes to cost sharing requirements. Plans may also opt to waive cost sharing for some or all of 2021 if the public health emergency is still in place when the 2021 bids are due on 1 June, CMS said.