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U.S. deputy secretary of Health and Human Services (HHS) nominee Jim O’Neill, President Donald Trump’s pick and a former HHS official during George W. Bush’s administration, has previously opposed Food and Drug Administration (FDA) oversight of laboratory developed tests (LDTs) that use algorithms. O’Neill also suggested that the FDA should only consider the safety of drugs in approval decisions, and address efficacy after legalization.
As an HHS official under consideration for the position of FDA commissioner in 2017, O’Neill opposed FDA regulation of companies that perform LDTs that use complex algorithms.
“I found that really astonishing…astonishing that someone could claim the ability to shut down companies that were never touching a patient but only accurately matching algorithms,” O’Neill said in a 2014 speech.
During President Trump’s first term, he shared a similar view on LDTs and ended the FDA’s bid to place these tests under duplicative FDA oversight in addition to the regulation they’re already subject to from the Centers for Medicare and Medicaid Services (CMS). Under former President Joe Biden, the FDA finally published a rule asserting its authority over LDTs, but that could be reversed under the new administration.
O’Neill also said, “We should reform FDA so that it’s approving drugs after their sponsors have demonstrated safety and let people start using them at their own risk. Let’s prove efficacy after they’ve been legalized.”
These remarks on drugs raised concerns during President Trump’s first term. O’Neill has no medical training but has had a career as a biotech investor, which included serving as CEO of the science and technology-focused Thiel Foundation.
If his nomination for deputy HHS secretary is approved, O’Neill will oversee the daily operations of HHS’ subagencies, including the FDA and CMS, and will play an integral role in public health emergency preparedness and overseeing the development of federal health regulations.
In a letter addressed to U.S. representatives Aaron Bean and Pete Sessions, the Association for Diagnostics & Laboratory Medicine (ADLM, formerly AACC) expressed support for their efforts as the co-chairs of the new House Delivering Outstanding Government Efficiency (DOGE) Caucus to reduce unnecessary government regulation and improve the delivery of public services. ADLM urged the representatives to revoke a rule issued by the Food and Drug Administration (FDA) that would hinder patient care, particularly for children and those living in rural areas.
The final rule (Docket No. FDA-2023-N-2177), promulgated by the FDA on May 6, would regulate laboratories that develop laboratory developed tests (LDTs) as if they were medical device manufacturers. The rule fails to recognize the difference between the two sectors: Manufacturers develop and sell their devices to anyone, whereas laboratories develop LDTs for their patients only at the request of an ordering physician. LDTs are also already regulated by the Centers for Medicare and Medicaid Services (CMS) and would continue to be regulated by CMS in addition to FDA under the new rule.
ADLM is concerned that, if implemented, the rule will hinder the development of new LDTs, which are critical to advancing care, and significantly increase the administrative and compliance costs associated with LDT testing, thus forcing laboratories to reduce or eliminate LDTs from their test menu. ADLM urged the House DOGE Caucus to seek the revocation of this rule and preserve patient access to vital tests.
In a letter addressed to members of the U.S. House of Representatives and the U.S. Senate, Charlene MacDonald, executive vice president of public affairs of the Federation of American Hospitals (FAH), called on lawmakers to support hospitals and patients by considering the FAH’s legislative priorities, including protecting access to health insurance and patient care and capitalizing on tax reform.
On average, Medicare pays only 82 cents for every dollar of hospital care provided to Medicare beneficiaries, leaving hospitals with nearly $100 billion in Medicare shortfalls in 2022 alone. Cuts to Medicare reduce access to essential healthcare services for seniors, while Medicaid covers more than 79 million individuals, including children, low-wage workers, persons with disabilities, and pregnant people. The letter called on Congress to reject any proposals that would cut the Medicaid or Medicare programs.
The tax reforms enacted in 2017 played a key role in encouraging capital investment, creating jobs, and raising wages, including in the healthcare sector, according to AHA. Allowing these tax cuts to expire would raise the costs of healthcare coverage by 90% for nearly 20 million people, lower workers’ take-home pay, and lead to substantial job losses. The letter urged Congress to extend the enhanced premium tax credits for health insurance, which are set to expire at the end of 2025, and preserve access to affordable healthcare coverage for the millions of Americans who rely on it.