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21st Century Cures Act Brings Changes for Many Health-Related Industries

by Anne Law | Dun & Bradstreet Editor

December 14, 2016 | No Comments »

The 21st Century Cures Act (CCA) creates a wave of change touching a number of health-related industries. Provisions of the law — which was passed by Congress last week and signed into law by President Obama this week — impact the drug, device, hospital, ambulatory care, mental health, and technology industries, among others.

Perhaps the most talked-about boon comes to the pharmaceutical and medical device industries, which will benefit from FDA process modifications designed to speed up approvals of new treatments. It will also be easier for drug companies to market and gain approval for new indications on existing medicines.

Also benefiting drug researchers is the $4.8 billion in funding allotted to the National Institutes of Health for development of new medicines. The program will focus on cancer, neurobiology, and genetic medicine, including Alzheimer’s treatment and cancer “moonshot” drugs. While the money must be approved each year by Congress, it will benefit not only pharma companies but also the many universities and medical centers that conduct biomedical research.

Mental health and substance-abuse service providers will finally get a major boost in funding to address the surge in opioid addiction. Funding will primarily go to treatment clinics, but some research programs will also be granted assistance. Other provisions improve suicide-prevention and pediatric mental health programs.

Hospitals benefit from added mental health funding, as emergency rooms are often ill-equipped to channel patients towards adequate substance-abuse and psychological treatment. In addition, safety net hospitals, which treat vulnerable and underserved populations, gain risk protections against unfair readmission penalties for factors outside their control.

The CCA supports information technology initiatives such as the improvement of interoperability, data privacy, and security of electronic heath record (EHR) systems. It also includes the creation of a public website to allow Medicare patients to compare procedure costs at various ambulatory surgery centers (ASC) to the cost of hospital procedures. ASC surgeons gained protection against certain Medicare meaningful-use penalties.

The bill’s positive impact on health care, pharmaceutical, medical device, and technology industries is vast. However, the act comes with some perceived ill effects as well.

To redirect funds towards new programs, the CCA cuts about 30% of allocations (some $3.5 billion) to the Prevention and Public Health Fund, which was established under the Affordable Care Act to promote prevention of hospital infections, Alzheimer’s disease, chronic illnesses, and other ailments.

Some legislators, as well as consumer and patient safety groups, opposed the bill on concerns that it will reduce FDA oversight and allow unsafe approvals of drugs and devices. While $500 million is allotted to new hires at the FDA over the next 10 years, critics say the bill’s funding isn’t enough to cover the added workload and does little to address existing FDA shortcomings in areas including postapproval oversight, food safety oversight, and deteriorating labs. The CCA also doesn’t include any price control rules, despite legislative efforts to include them.

Anne Law has been a member of the D&B editorial department for more than a decade, providing content for the Hoover’s and First Research products. She currently covers the health care and insurance industries for First Research. For industry news, follow Anne on Twitter.

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Photo by Michael J. Ermarth, courtesy of the US Food and Drug Administration.

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