Drugs, Biologics, and Medical Devices: A Compendium

This Compendium includes a wealth of reports on drugs, biologics and medical devices. The reports included consist of the authority to regulate drug compounding; the law and intellectual property rights of biologics; federal drug discovery and pricing; the FDA’s Safety and Innovation ACT (P.L. 112-114); effects on pharmaceutical innovation and effects of generic brands; infringement and experimental use under the Hatch-Waxman Act. Furthermore, the reauthorization of the Prescription Drug User Fee Act (PDUFA); and how the FDA approves drugs and regulates their safety and effectiveness.


Date of Report: October 17, 2012
Number of Pages: 268
Order Number: C-12010
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Health Insurance Exchanges Under the Patient Protection and Affordable Care Act (ACA)

Bernadette Fernandez
Specialist in Health Care Financing

Annie L. Mach
Analyst in Health Care Financing

The fundamental purpose of a health insurance exchange is to provide a structured marketplace for the sale and purchase of health insurance. The authority and responsibilities of an exchange may vary, depending on statutory or other requirements for its establishment and structure. The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) requires health insurance exchanges to be established in every state by January 1, 2014. ACA provides certain requirements for the establishment of exchanges, while leaving other choices to be made by the states.

Qualified individuals and small businesses will be able to purchase private health insurance through exchanges. Issuers selling health insurance plans through an exchange will have to follow certain rules, such as meeting the private market reform requirements in ACA. While the fundamental purpose of the exchanges will be to facilitate the offer and purchase of health insurance, nothing in the law prohibits qualified individuals, qualified employers, and insurance carriers from participating in the health insurance market outside of exchanges. Moreover, ACA explicitly states that enrollment in exchanges is voluntary and no individual may be compelled to enroll in exchange coverage.

Exchanges may be established either by the state itself as a “state exchange” or by the Secretary of Health and Human Services (HHS) as a “federally-facilitated exchange.” A federally-facilitated exchange may be operated solely by the federal government, or it may be operated by the federal government in conjunction with the state, as a “partnership” exchange. All exchanges are required to carry out many of the same functions and adhere to many of the same standards, although there are important differences between the types of exchanges. States will need to declare their intentions to establish their own exchanges by no later than December 14, 2012; states interested in pursuing a partnership exchange must declare their intentions no later than February 15, 2013.

ACA and regulations require exchanges to carry out a number of different functions. The primary functions relate to determining eligibility and enrolling individuals in appropriate plans, plan management, consumer assistance and accountability, and financial management. ACA gives various federal agencies, primarily HHS, responsibilities relating to the general operation of exchanges. Federal agencies are generally responsible for promulgating regulations, creating criteria and systems, and awarding grants to states to help them create and implement exchanges.

A state that is approved to operate its own exchange has a number of operational decisions to make, including decisions related to organizational structure (governmental agency or a nonprofit entity); types of exchanges (separate individual and Small Business Health Options Program (SHOP) exchanges, or a merged exchange); collaboration (a state may independently operate an exchange or enter into contracts with other states); service area (a state may establish one or more subsidiary exchanges in the state if each exchange serves a geographically distinct area and meets certain size requirements); contracted services (an exchange may contract with certain entities to carry out one or more responsibilities of the exchange); and governance (governing board and standards of conduct).

In general, health plans offered through exchanges will provide comprehensive coverage and meet all applicable private market reforms specified in ACA. Most exchange plans will provide coverage for “essential health benefits,” at minimum; be subject to certain limits on cost-sharing, including out-of-pocket costs; and meet one of four levels of plan generosity based on actuarial value. To make exchange coverage more affordable, certain individuals will receive premium assistance in the form of federal tax credits. Moreover, some recipients of premium credits may also receive subsidies toward cost-sharing expenses.

This report outlines the required minimum functions of exchanges, and explains how exchanges are expected to be established and administered under ACA. The coverage offered through exchanges is discussed, and the report concludes with a discussion of how exchanges will interact with selected other ACA provisions.


Date of Report: November 16, 2012
Number of Pages: 38
Order Number: R42663
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Federal Employees Health Benefits Program (FEHBP): Available Health Insurance Options

Annie L. Mach
Analyst in Health Care Financing

FEHBP is generally available to employees, annuitants, and their dependents. Eligible individuals may elect coverage in an approved health benefits plan for either individual or family coverage. For the 2013 plan year, there are about 230 different plan choices, including all regionally available options. As a practical matter, an individual’s choice of plans is often limited to 10 to 15 different plans, depending on where the individual resides. While enrollees have a range of choices, they typically decide which options best match their needs, the amount of their wages they will contribute to health insurance, and how risk-averse they are to potential out-of-pocket costs.

While most federal employees or annuitants reaching age 65 are automatically entitled to Medicare Part A, Medicare-eligible employees may also voluntarily choose to enroll in Medicare Part B and Part D. For individuals covered under a FEHBP plan as an annuitant, Medicare is the primary payer and FEHBP is the secondary payer. As a secondary payer, FEHBP could cover a share of Medicare deductibles and coinsurance for any services that are covered by both plans, and FEHBP would continue to reimburse for its covered services that are not covered by Medicare.

FEHBP is administered by the Office of Personnel Management (OPM), which is statutorily given the authority to contract with qualified carriers offering plans and to prescribe regulations necessary to carry out the statute, among other duties. Some of OPM’s additional duties include coordinating the administration of FEHBP with employing offices, managing contingency reserve funds for the plans, and applying sanctions to health care providers according to the prescribed regulations.


Date of Report: November 6, 2012
Number of Pages: 27
Order Number: RS21974
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U.S. Global Health Initiatives: A Compendium

U.S. funding for global health activities has grown significantly over the past decade. Much of the growth in U.S. global health spending has been motivated by infectious disease outbreaks, including human immunodeficiency virus/acquired immunodeficiency syndrome (HIV/AIDS), severe acute respiratory syndrome, H5N1 avian influenza, and extremely drug-resistant tuberculosis.

Estimates of U.S. global health assistance vary, due in part to fragmented funding streams and a lack of consensus on what should be considered U.S. global health assistance. Congress provides funds for U.S. global health assistance through a number of appropriations vehicles: Foreign Operations; Labor, Education, and Health; and Defense. The greatest proportion of these funds is provided for the President’s Emergency Plan for AIDS Relief, which supports global HIV/AIDS programs implemented by a number of agencies and departments, including the U.S. Agency for International Development, the Department of Health and Human Services and its implementing agencies, the Department of Commerce, the Department of Defense, the Department of Labor, and the Peace Corps. Congress also provides funds to the Centers for Disease Control and Prevention (CDC) for global health activities.

In addition to funds Congress provides directly to U.S. agencies and departments for global health efforts, U.S. agencies and departments also use portions of their budgets for global health programs. For example, CDC regularly allots a part of its tuberculosis budget for international interventions, though Congress does not specify that the funds should be used for those purposes. Agencies and departments might also transfer funds among each other.

In addition to these funding sources, U.S. agencies implement programs that simultaneously address development and health challenges, such as those related to improving access to clean water, addressing the negative consequences of climate change and rapid urbanization, supporting the vulnerable in conflict or post-conflict environments, and responding to natural emergencies. A number of advocacy groups consider some of these activities as part of health assistance. This report defines global health assistance as those activities that Congress funds specifically to address global health challenges, unless otherwise indicated (such as global TB activities implemented by CDC).

Date of Report: October 10, 2012
Number of Pages: 219
Order Number: C-12021
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Medical Marijuana: The Supremacy Clause, Federalism, and the Interplay Between State and Federal Laws

Todd Garvey
Legislative Attorney

As part of a larger scheme to regulate drugs and other controlled substances, federal law prohibits the cultivation, distribution, and possession of marijuana. No exception is made for marijuana used in the course of a recommended medical treatment. Indeed, by categorizing marijuana as a Schedule I drug under the Controlled Substances Act (CSA), the federal government has concluded that marijuana has “no currently accepted medical use in treatment in the United States.” Yet 18 states and the District of Columbia have decriminalized medical marijuana by enacting exceptions to their state drug laws that permit individuals to grow, possess, or use marijuana for medicinal purposes. In contrast to the complete federal prohibition, these 19 jurisdictions see medicinal value in marijuana and permit the drug’s use under certain circumstances.

Although the U.S. Supreme Court has established Congress’s constitutional authority to enact the existing federal prohibition on marijuana, principles of federalism prevent the federal government from mandating that the states actively support or participate in enforcing the federal law. While state resources may be helpful in combating the illegal use of marijuana, Congress’s ability to compel the states to enact similar criminal prohibitions, to repeal medical marijuana exemptions, or to direct state police officers to enforce the federal law remains limited by the Tenth Amendment.

Even if the federal government is prohibited from mandating that the states adopt laws supportive of federal policy, the constitutional doctrine of preemption generally prevents states from enacting laws that are inconsistent with federal law. Under the Supremacy Clause, state laws that conflict with federal law are generally preempted and therefore void. Courts, however, have not viewed the relationship between state and federal marijuana laws in such a manner, nor did Congress intend that the CSA displace all state laws associated with controlled substances. Instead, the relationship between the federal ban on marijuana and state medical marijuana exemptions must be considered in the context of two distinct sovereigns, each enacting separate and independent criminal regimes with separate and independent enforcement mechanisms, in which certain conduct may be prohibited under one sovereign and not the other. Although state and federal marijuana laws may be “logically inconsistent,” a decision not to criminalize—or even to expressly decriminalize—conduct for purposes of the law within one sphere does nothing to alter the legality of that same conduct in the other sphere.

This report will review the federal government’s constitutional authority to enact the federal criminal prohibition on marijuana; highlight certain principles of federalism that prevent the federal government from mandating that states participate in enforcing the federal prohibition; consider unresolved questions relating to the extent to which state authorization and regulation of medical marijuana are preempted by federal law; and assess what obligations, if any, the U.S. Department of Justice (DOJ) has to investigate and prosecute violations of the federal prohibition on marijuana.


Date of Report: November 9, 2012
Number of Pages: 20
Order Number: R42398
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