News in brief - Apr 25, 2011

House votes to repeal public health fund

The House on April 13 voted 236-183 to repeal the health system reform law's Prevention and Public Health Fund, with four Democrats supporting the repeal. The fund was created by the reform law to support a variety of health efforts, including local tobacco cessation programs, information technology upgrades for public health departments and research to monitor the impact of health reform.

Republicans object to the fund because it allows the Health and Human Services secretary to provide grants to a variety of projects without the need to seek annual appropriations from Congress.

"Prevention does work, and I support efforts to reduce obesity, diabetes and other preventable health conditions," Rep. Joe Pitts (R, Pa.), the bill's sponsor, said April 13. "The question before us today was whether Congress should determine how we spend public funds." Pitts chairs the House Energy and Commerce health subcommittee.

HHS has awarded $1.25 billion from the fund so far. If enacted by September, the bill would repeal $16 billion in funding by 2021, according to the Congressional Budget Office. However, the Democratic-controlled Senate is not expected to act on the measure, and Obama promised on April 13 to veto any legislation that repeals the fund.

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Oklahoma to decline $54 million health exchange grant

Officials in Oklahoma will not accept a $54 million grant to develop a health insurance exchange, Gov. Mary Fallin said April 14. Instead, the state will use local and private funding to build the exchange.

The national health system reform law requires all states to have an exchange in place by 2014. The Dept. of Health and Human Services would run an exchange in any state that fails to establish a marketplace for health consumers to purchase coverage by the law's deadline.

Oklahoma was one of six states to which HHS awarded an early innovator grant in February. However, state politicians did not want to be perceived as capitulating to the national health reform law and the Obama administration, said Wes Glinsmann, director of state legislation and political affairs for the Oklahoma State Medical Assn. The state is one of several seeking to overturn the health reform law.

"There's no policy behind it," Glinsmann said of the state's decision to decline the grant. "It's just politics."

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Drugmakers to pay $4.2 million in Wisconsin Medicaid case

Three drug manufacturers accused of defrauding the Wisconsin Medicaid program will pay the state more than $4.2 million, according to a settlement announced March 28 by state Attorney General J.B. Van Hollen.

Merck & Co., Schering Corp. and Warrick Pharmaceuticals Corp. were among 36 drugmakers charged with fraud in 2004 by the Dept. of Justice. The drug companies were accused of publishing false average wholesale drug prices, knowing that the state would rely on the numbers to set its Medicaid payment formulas, Van Hollen said. The inflated prices resulted in Medicaid paying more for drugs than was appropriate, he said.

The three drugmakers did not admit any wrongdoing in the settlement.

In 2009, a jury verdict against manufacturer Pharmacia awarded the state $9 million in damages. Pharmacia appealed, and lawsuits against several other manufacturers have been stayed pending the appeal's outcome. Eleven drugmakers have settled with the state, agreeing to pay about $15 million in combined settlements.

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