Capitol Hill Healthcare Update

by BakerHostetler
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Below is this week’s “Capitol Hill Healthcare Update,” which is posted on Mondays when Congress is in session. Highlights this week: Nearly 7,000 FDA employees are furloughed amid the ongoing government shutdown; lawmakers introduce a slew of anti-pharma bills; 18 new Democrats land plum spots on key healthcare committees; and more.

SHUTDOWN UPDATE: NO END IN SIGHT

The partial government shutdown passed an inauspicious milestone this weekend: the longest in U.S. history.

Most federal healthcare agencies are funded and fully functioning during the shutdown, such as HHS and CMS. But the appropriations bill that funds FDA hasn’t been approved, leading the agency to furlough 41 percent of its workforce and scale back key functions.

Sen. Patty Murray, D-Wash., and 33 other Democratic senators wrote to Commissioner Scott Gottlieb last week asking how approval of medical products is being affected by the shutdown.

Amid escalating partisan tensions and political theatrics, the partial shutdown – now at 24 days – shows no signs of ending. Both the House and Senate will reconvene this week, but no talks with the White House are currently scheduled.

House Democrats last week approved spending bills for departments that are currently closed, including for the Agriculture Department, which includes FDA funding. But Senate Republicans say they won’t take up funding bills that President Donald Trump won’t sign, and Trump says he will veto bills that don’t include his demand of $5.7 billion for constructing a wall along the U.S.-Mexican border.

Caught in the partisan crossfire are nearly 800,000 federal workers – including 7,000 FDA employees – who last week didn’t receive a paycheck for the first time during the budget standoff.

DEMOCRATS, REPUBLICANS UNLOAD SERIES OF DRUG-PRICING BILLS

Congressional Republicans and Democrats last week introduced a series of bills aimed at lowering prescription drug prices, one policy where there may be consensus between lawmakers and the White House.

Sen. Bernie Sanders, I-Vt., and Reps. Elijah Cummings, D-Md., and Ro Khanna, D-Calif., introduced three bills last week, including one overturning the prohibition against the government negotiating prices with manufacturers in the Medicare Part D drug program. Another bill would build on President Donald Trump’s plan to establish an international pricing index by tying U.S. prices to median drug prices in five countries. A third bill would authorize importing prescription drugs from Canada.

Cummings, chairman of the Oversight and Reform Committee, announced his panel would hold a hearing on drug price increases Jan. 29 with the witnesses announced today. Cummings’ committee also sent pharmaceutical manufacturers letters Monday requesting drug pricing information.

Sen. Jeanne Shaheen, D-N.H., last week introduced legislation that would eliminate the business tax deduction for the pharmaceutical industry’s direct-to-consumer advertising. Shaheen said the ads are fueling increased drug spending, and with those advertisements being deductible business expenses, taxpayers are effectively subsidizing the ads.

Reps. Francis Rooney, R-Fla., and Peter Welch, D-Vt., teamed up last week to introduce legislation that would require Medicare to negotiate prices for Part D drugs. Rooney is a strong supporter of Trump, who won Rooney’s southwest Florida coastal district in 2016.

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, last week said he opposed allowing the government to negotiate drug prices. But Grassley and Sen. Amy Klobuchar, D-Minn., introduced legislation to permit the importation of prescription drugs from Canadian pharmacies. Grassley and Klobuchar also introduced legislation that would crack down on what the senators say is anti-competitive “pay for delay” agreements in which branded drug manufacturers pay generic competitors to delay competing as part of patent settlements.

Grassley also said he would push for legislation that ensures generic manufacturers gain accesses for bioequivalence testing to drugs under FDA’s REMS safety program.

SENATE BILL WOULD RENEW COMMUNITY HEALTH CENTER FUNDING

Sens. Roy Blunt, R-Mo., and Debbie Stabenow, D-Mich., last week introduced legislation to reauthorize the Community Health Center Fund and the National Health Service Corps for five years.

Community health centers provide medical, dental, vision and behavioral healthcare to 28 million patients, including more than 355,000 veterans and 8 million children, at more than 11,000 sites nationwide.

Blunt and Stabenow last year announced a two-year funding extension for community health centers. That funding expires Sept. 30.

SENATE BILL WOULD REPEAL INSURERS TAX

Senators last week introduced bipartisan legislation to repeal the Affordable Care Act’s (ACA’s) tax on health insurers, saying the levy leads to premium increases for consumers.

The tax is forecast to raise $14 billion in 2020 and more than $100 billion during the next decade. Sens. John Barrasso, R-Wyo., Cory Gardner, R-Colo., and Kyrsten Sinema, D-Ariz., said their bill would hold down pressure on insurance premiums.

The ACA’s 2.3 percent excise tax on medical technology is scheduled to come back online next year, too. Industry advocates are pressing lawmakers to repeal or at least further suspend both taxes.

LAWMAKERS WANT TRANSPARENCY ON MEDICARE INNOVATION CENTER

The top lawmakers on the House Ways and Means Committee are calling on CMS to be more transparent and involve more public input on projects from the Center for Medicare and Medicaid Innovation.

Committee Chairman Richard Neal, R-Mass., and the panel’s top Republican, Rep. Kevin Brady, R-Texas, warned that significant policy changes made unilaterally and without transparency could negatively affect beneficiaries and providers.

The lawmakers made the comments in a letter to CMS Administrator Seema Verma.

Republicans had criticized the innovation center under the Obama administration for creating reimbursement pilot projects that were virtually national in scope, rather than testing them regionally.

Now under Trump administration control, the center is poised to issue a new demonstration project tying reimbursement for drugs administered in physicians’ offices under Medicare Part B to costs in countries where governments set drug prices. The plan has drawn sharp criticism from the pharmaceutical industry and some Republican lawmakers.

HOUSE OKs PANDEMIC PREPAREDNESS RENEWAL, USER FEES FOR OTC DRUGS

The House last week overwhelmingly approved legislation to renew $7 billion in expired pandemic-prevention and other health emergency programs.

Originally approved in 2006 in the wake of Hurricane Katrina, the pandemic measure seeks to coordinate federal response to health disasters, biological and chemical threats, and emerging infectious diseases. The bill, which won approval 401-17, also would overhaul the existing FDA regulatory framework for nonprescription drugs, including creating a user fee program for over-the-counter drugs.

Reps. Anna Eshoo, D-Calif., and Susan Brooks, R-Ind., first introduced the combined pandemic and nonprescription drug legislation last month, but it stalled in the Senate after winning wide House approval.

Sen. Richard Burr, R-N.C., objected to the new user fee regime for nonprescription drugs as well as FDA’s crackdown on electronic cigarette flavors. Sen. Johnny Isakson, R-Ga., who introduced a stand-alone version of the over-the-counter drug bill, in turn blocked Senate consideration of Burr’s pandemic program reauthorization.

By combining the two unrelated initiatives into one bill, lawmakers hope to be able to sidestep the senators’ squabble, which has derailed approval of both measures for months.

DEMOCRATS PRESS HHS ON ACA USER FEES

House and Senate Democrats last week called on HHS and CMS to disclose how they’re spending funding generated by user fees in the Affordable Care Act Marketplace exchanges such as HealthCare.gov.

In a letter to HHS Secretary Alex Azar and CMS Administrator Seema Verma, the lawmakers asked for details on the amount of user fees collected and a detailed accounting of how the funds were spent.

The letter was signed by House Ways and Means Chairman Richard Neal, D-Mass., House Energy and Commerce Chairman Frank Pallone, D-N.J., House Education and Labor Chairman Bobby Scott, D-Va., Senate Finance Committee Ranking Member Ron Wyden, D-Ore., and Senate HELP Committee Ranking Member Patty Murray, D-Wash.

HOUSE DEMOCRATS APPOINT NEW MEMEBRS TO KEY HEALTH COMMITTEES

Now in the House majority, Democrats last week appointed 18 lawmakers to fill key slots on healthcare committees.

Democrats appointed to the Ways and Means Committee are Reps. Don Beyer of Virginia, Gwen Moore of Wisconsin, Steven Horsford of Nevada, Stephanie Murphy of Florida, Brad Schneider of Illinois, Jimmy Panetta of California, Brendan Boyle of Pennsylvania, Dwight Evans of Pennsylvania, Dan Kildee of Michigan and Thomas Suozzi of New York.

Democrats appointed to the Energy and Commerce Committee are Nanette Diaz Barragan of California, Robin Kelly of Illinois, Marc Veasey of Texas, Tom O’Halleran of Arizona, Darren Soto of Florida, Lisa Blunt Rochester of Delaware, Ann McLane Kuster of New Hampshire, and Don McEachin of Virginia.

The Ways and Means Committee has legislative jurisdiction over CMS and Medicare Part A and Part B. The Energy and Commerce Committee has jurisdiction over FDA and Medicare Part B and Part D.

Republicans this week are expected to add two members to the Ways and Means Committee and one member to the Energy and Commerce Committee.

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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