Capitol Hill Healthcare Update

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YEAR-END LEGISLATIVE OVERDRIVE

This week is crunch time on a host of legislative priorities, and various health-related provisions hang in the balance.

Lawmakers and staff worked all weekend negotiating on legislation to fund the government beyond next Friday’s deadline, when current funding expires. As the only true must-pass legislative vehicle before the end of the year, it’s the last best hope for the policy priorities of many stakeholders, including the medical device industry, which is seeking relief from the Affordable Care Act device tax before it comes back into effect Jan. 1.

With spending negotiations now at the leadership level, Speaker Nancy Pelosi is the primary obstacle for device manufacturers. Device tax repeal or suspension enjoys broad bipartisan support, including from Senate Democratic Leader Chuck Schumer, D-N.Y. Many House Democrats in competitive districts represent significant clusters of industry employees, and those members are continuing to weigh in with Pelosi in opposition to the tax.

Any device tax relief is likely to be tied to relief for other ACA taxes on insurers and expensive employer-based plans. Device companies may know as soon as today whether they will have to begin paying the 2.3 percent excise tax next month.

Meanwhile, the White House and House Democrats appear to be close to agreement on the new U.S.-Mexico-Canada (USMCA) trade deal. Democrats are desperate to show voters they can accomplish more than impeaching President Donald Trump, and the trade agreement would be a victory for both sides.

The original agreement included a provision requiring the countries to provide 10 years of intellectual property protection to biologic drugs. That is shorter that the 12 years the U.S. provides but longer than either Canada or Mexico.

As negotiators worked toward a legislative deal last week, the 10-year provision was apparently dropped from the agreement, as Trump was unwilling to push back against Democratic demands to remove it. Congressional Republicans strongly support requiring the longer exclusivity period, but it does not appear they will block the larger trade agreement to try to force its inclusion.

If the USMCA is approved, the three countries would continue to determine their own market protections.

DEMOCRATS’ DRUG PRICING BILL TO THE HOUSE FLOOR

This week, the House will hold a long-awaited vote on H.R. 3, the Lower Drug Costs Now Act.

The broad overhaul of prescription drug pricing includes as its centerpiece a requirement that pharmaceutical manufacturers negotiate prices with the government on 250 drugs; it also would apply those negotiated prices to private health plans nationwide.

Speaker Nancy Pelosi, who is largely responsible for crafting the bill, is working to quell ongoing liberal angst that the bill is too limited. The left flank of Pelosi’s caucus has pushed for months to further expand the legislation, including fully repealing the prohibition on government negotiation on drug prices in Medicare. Reports emerged late Friday that the Congressional Progressive Caucus might attempt to block the bill on the House floor in order to demand changes.

Still, leadership plans to move forward with the vote later this week. The bill is likely to pass largely along party lines, with few if any Republicans in support. Republican leaders in the House, meanwhile, will roll out their alternative proposal today.

COMMITTEE LEADERS ANNOUNCE AGREEMENT ON SURPRISE BILLING LEGISLATION

Bipartisan, bicameral committee leaders on Sunday announced agreement on legislation to “lower what Americans pay out of pocket for their health care,” including addressing surprise medical bills.

Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander, R-Tenn., and House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., and Ranking Member Greg Walden, R-Ore., together announced the Lower Health Care Costs Act. The lawmakers say the legislation “would end surprise billing of patients and include a new system for independent dispute resolution often called arbitration,” and also “increases prescription drug competition and creates price transparency, funds critical public health programs, including Community Health Centers for five years, and increases the purchasing age of tobacco to 21.”

Congress has worked for months to address unexpected bills for out-of-network medical care, as the need to address surprise medical billing is a rare area of bipartisan agreement where Trump has also urged action. But an actual solution has been challenging, as physicians, hospitals and insurers lobby to not bear a disproportionate burden of solving the issue.

Alexander, Pallone and Walden appear to believe they have found that solution. But the House Ways and Means Committee and Senate Finance Committee also have done significant work on the surprise billing issue, and it’s not immediately clear where they stand on this proposal. It’s also not yet known which provisions on drug pricing are included in the Lower Health Care Costs Act.

A timeline for consideration of the legislation has not yet been announced.

HEALTH PANEL TO REVIEW ‘MEDICARE FOR ALL’ PROPOSALS

The House Energy and Commerce Health Subcommittee on Tuesday will hold a legislative hearing on a variety of different proposals from lawmakers to achieve universal health insurance coverage.

Healthcare has been the top issue for Democratic campaigns for most of the past decade, and several of the party’s leading presidential contenders have embraced some form of “Medicare for All.” So have most of the more liberal members of the House, as Democrats’ electoral success in 2018 was in large part driven by the energy of the party’s base on healthcare.

This week’s hearing is an opportunity for lawmakers to give voice to that energy in a more formal setting. For example, Rep. Pramila Jayapal, D-Wash., who introduced the Medicare for All Act in the House, will testify at the hearing along with five of her Democratic colleagues.

A second panel of witnesses will also testify on the various proposals: Sara Rosenbaum, a professor of health law and policy at George Washington University; Peter Morley, a patient advocate from New York; Jean Ross, President of National Nurses United; Douglas Holtz-Eakin, President of the American Action Forum; and Dr. Scott W. Atlas of the Hoover Institution at Stanford University.

OVERSIGHT PANEL TO REVIEW FDA INSPECTION OF FOREIGN-MANUFACTURED DRUGS

The House Energy and Commerce Oversight Subcommittee on Tuesday will hold a hearing to review the Food and Drug Administration’s foreign drug inspection program.

The committee’s leaders say that despite Congress strengthening FDA’s authority in recent years, “Recent recalls and troubling news reports raise fresh concerns” that vulnerabilities could undermine the safety of some pharmaceutical products.

In October, the Health Subcommittee held a legislative hearing on the safety of active ingredients used in drug products. This week’s hearing will focus more specifically on the current challenges of the foreign drug inspection program.

The committee will hear testimony from Mary Denigan-Macauley, Health Care Director at the Government Accountability Office; and Janet Woodcock, Director of the Center for Drug Evaluation and Research at FDA.

HELP COMMITTEE TO TAKE UP PUBLIC HEALTH BILLS

The Senate Health, Education, Labor and Pensions Committee on Thursday will hold a markup including legislation addressing public health.

On the agenda is the Palliative Care and Hospice Education and Training Act, sponsored by Sens. Shelly Moore Capito, R-W.V., and Tammy Baldwin, D-Wisc. According to Capito and Baldwin, their bill would strengthen training for new and experienced physicians and other providers who are part of palliative care teams. It also boosts palliative care research and provides academic and career awards to incentivize the practice and study of palliative and hospice care. A similar measure received unanimous House approval in October.

The committee will also take up yet-to-be-introduced legislation to reauthorize Title VII of the Public Health Service Act. The Health Resources and Services Administration, through Title VII, supports education and training in health professions with grants to institutions and individuals. The House unanimously passed legislation reauthorizing Title VII in October.

SENATORS PRESS ON OTC HEARING AIDS

Senators Charles Grassley, R-Iowa, and Elizabeth Warren, D-Mass., last week wrote to Acting FDA Commissioner Brett Giroir seeking an update on regulations implementing a 2017 law to allow certain hearing aids to be sold over the counter.

Trump in 2017 signed into law as part of a broader FDA reauthorization the Over-the-Counter Hearing Aid Act, which Warren and Grassley co-authored, aiming to increase seniors’ ability to obtain hearing aids. The senators noted that last October FDA announced that implementing the law would be a priority in the autumn of 2018, but regulations have not yet been released.

Grassley and Warren asked for an update on the status of the rules and regulations and on when the agency expects to finalize them. The law set a deadline of August 2020.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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