By Katherine Ellen Foley, Lauren Gardner and David Lim

Presented by 340B Health

FDA Commissioner Robert Califf says the agency's leadership will do their best to "mitigate the impacts of a shutdown." | Jose Luis Magana/AP Photo

SHUTDOWN WATCH — Top HHS officials on Thursday reminded staff to prepare for a government shutdown but noted Congress still has time to pass funding before midnight on Saturday. FDA activities, such as routine inspections, may be delayed, but the agency will continue to review drug and medical device approval applications while user fee carryover funds remain.

“I fully recognize how disconcerting this may be personally as well as professionally,” FDA Commissioner Robert Califf wrote in an email to staff obtained by POLITICO. “You have my commitment that FDA leadership will do our very best to mitigate the impacts of a shutdown, and any burdens to you and your families, should we find ourselves in one.”

Beyond the FDA: Other HHS agencies affected include the National Institutes of Health, whose clinical center would continue to admit new patients but whose research could be stalled. The Administration for Strategic Preparedness and Response would continue some disaster response operations but would halt its preparedness and response capabilities.

HHS Secretary Xavier Becerra and Deputy Secretary Andrea Palm said that if a shutdown occurs, “all employees will receive retroactive pay for the furlough period as soon as possible” once it ends.

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TODAY ON OUR PULSE CHECK PODCAST, your host Katherine talks with POLITICO health care reporter Daniel Payne about key takeaways from POLITICO’s “Mission Update: Inside the Cancer Moonshot” live event.

A message from 340B Health:

340B hospitals put their patients first by serving as a vital safety net for essential health care. 340B hospitals provide 77% of the nation’s Medicaid care and 67% of unpaid hospital care. Protecting 340B is crucial for the health of patients and communities. Learn more.

Merck, along with three other drugmakers, has agreed to participate in drug price negotiations with CMS. | AP Photo

IT’S THE FINAL COUNTDOWN — The drugmakers whose products were chosen by CMS as the first subject to price talks are nearing the Oct. 1 deadline to decide whether to participate.

If they opt out, they must either withdraw all their products from the Medicare and Medicaid markets or pay excise taxes of between 65 and 95 percent.

Who’s in: So far, Merck, Boehringer Ingelheim, AstraZeneca and Bristol Myers Squibb have said they’ll participate in negotiations, despite all having sued the Biden administration over the Inflation Reduction Act program.

Who’s TBD: Johnson & Johnson, Novartis, Amgen and AbbVie subsidiary Pharmacyclics haven’t yet confirmed their plans.

Novo Nordisk spokesperson Allison Schneider said the company continues “to explore our options.”

Legal outlook: The U.S. Chamber of Commerce has asked the U.S. District Court for the Ohio Southern District to decide by Sunday whether to grant its request for a preliminary injunction halting the negotiations as legal challenges play out. Judge Michael J. Newman, the Trump appointee considering the case, has indicated he hopes to make his decision by then.

So far, six drugmakers have challenged the program’s constitutionality, as well as branded drug lobbying giant PhRMA. Novo Nordisk and Amgen haven’t filed lawsuits; the Chamber namechecked AbbVie in its lawsuit as a member that would be harmed by the program, but the Department of Justice has argued that AbbVie wouldn’t be the chief company at the negotiating table over the blood cancer drug Imbruvica.

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COMING DOWN THE FINAL STRAIGHTAWAY — The FDA’s highly anticipated laboratory-developed tests proposed rule cleared the White House Office of Information and Regulatory Affairs earlier this week — the final step before implementation — and agency watchers anticipate the rule will be published today ahead of the potential government shutdown.

The proposed rule, not classified as economically significant, will likely explicitly define laboratory-developed tests as medical devices and bring them under more regulatory scrutiny. It is unclear when it will go into effect.

“This policy effort should have been implemented through legislation, Congress had [a] chance with [the] VALID Act,” former FDA Commissioner Scott Gottlieb — who sits on the boards of Illumina, Tempus, Pfizer and Aetion — posted on X, formerly known as Twitter.

CASSIDY INVESTIGATING 340B DRUG PROGRAM — The top Republican on the Senate HELP Committee on Thursday announced he is requesting information from Bon Secours Mercy Health and the Cleveland Clinic on how they spend 340B-tied revenue.

“The intent behind the program is for covered entities to pass on the revenue generated from the 340B Program to improve health care services for eligible patients,” Sen. Bill Cassidy (R-La.) wrote. “However, federal law imposes few requirements with respect to how covered entities may spend the revenue they generate from the 340B Program.”

Despite recent bipartisan scrutiny of the program, Health, Education, Labor and Pensions Committee Chair Bernie Sanders (I-Vt.) did not join Cassidy’s request.

Bon Secours Mercy Health responded: "At this time, we are in receipt of the letter; we are cooperating and reviewing its contents." The Cleveland Clinic has not responded to our request for comment.

A message from 340B Health:

MAJOR FINES FOR ILLEGAL VAPE RETAILERS — The FDA issued on Thursday its first fines for 22 retailers across 13 states selling unauthorized flavored vapes from Elf Bar. The retailers, often gas station convenience stores, had been previously warned by the FDA to stop selling the vapes, which have sweet, fruity flavors appealing to minors.

Each store was fined more than $19,000. They have 30 days to pay the fine, enter a settlement agreement or respond to the agency. They may also request a hearing.

BRAINSTORM RESPONDS TO AD COMM — Despite a strong push from patient advocacy groups, the FDA’s advisory committee on neurological drugs voted 17-1 with one abstention on Wednesday against approving BrainStorm Cell Therapeutics’ NurOwn, a candidate intended to treat ALS. BrainStorm had asked the agency for traditional approval despite a late-stage clinical trial that did not show direct benefits to patients.

“The discussion in today’s Advisory Committee meeting … underscores not only the need for regulatory flexibility but also for continuing research in the field,” Chaim Lebovits, BrainStorm’s president and CEO, said in a statement.

The company maintained that it was frustrated, but declined to specify what it would do next. The FDA doesn’t have to follow its advisory committees’ recommendations, though it often does, and is expected to decide on NurOwn by Dec. 8.

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Tom Miller, the former Iowa attorney general, will serve as a consultant to tobacco giant Altria on tobacco harm-reduction policies.

Medical device company Philips Respironics kept complaints about contamination in their respiratory devices quiet for years, an investigation from ProPublica’s Debbie Cenziper; the Pittsburgh Post-Gazette’s Michael Sallah, Michael Korsh and Evan Robinson-Johnson; and Northwestern University’s Monica Sager found.

Many nursing homes won’t be able to provide the latest Covid-19 vaccination to residents until October or even November, Jordan Rau and Tony Leys report for The New York Times.

A message from 340B Health:

340B hospitals are the backbone of the nation’s health care safety net, providing essential services to patients with low incomes and those living in rural America. 340B hospitals use savings from drug discounts to provide most of the nation’s unpaid and Medicaid hospital care, and they deliver vital services where access is often limited in rural communities. 340B savings enable hospitals to stay open for the patients and communities they serve. 340B lowers health care costs; supports doctors, nurses, and pharmacists; and expands care for the benefit of patients – all without using any taxpayer dollars. Protecting 340B is the best way forward for patients and communities. Learn more.

The FDA published final guidance containing recommendations for medical device firms creating devices that automatically adjust to maintain constant levels of various metrics, like drug or oxygen levels.

The FDA published draft guidance on developing prevention and treatment for graft-versus-host disease.

Seven public health groups concerned with lowering youth vaping rates, including the American Academy of Pediatrics and the Truth Initiative, wrote to the FDA this week to recommend that Juul’s second e-cigarette product appear before the agency’s tobacco product advisory committee.

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