Capitol Hill Healthcare Update

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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: Trump will discuss healthcare and drug costs in this week’s State of the Union address; Democrats criticize HHS’ drug rebate proposal; dueling hearings highlight the ACA’s pre-existing conditions; House Democrat reveals her cancer is in remission; and more.

SHUTDOWN UPDATE: LAWMAKERS STILL TALKING, BUT NO DEAL YET

Republicans and Democrats from the House and Senate will continue discussions this week in an effort to strike a budget agreement before Feb. 15, when funding expires for several government departments and agencies, including the FDA.

House Speaker Nancy Pelosi, D-Calif., said a deal needs to be reached by the end of this week to allow time for Congress to approve it before the mid-month deadline. While leaders in both parties say they want to avoid another government shutdown, it’s not clear how Congress might avoid that fate.

Lawmakers remain at loggerheads over funding for portions of a U.S.-Mexico border wall, and President Donald Trump has stepped up his rhetoric about declaring a national emergency, which would allow him to bypass Congress and tap into previously approved funds to start wall construction. Such a declaration – which Democratic and GOP leaders on Capitol Hill oppose – would be challenged in court.

If Trump were to declare an emergency, it’s not clear whether he would sign or veto funding legislation to keep the government open. If he vetoed the bill, congressional Republicans could be forced to override the veto, a politically perilous act for lawmakers on the ballot in 2020.

If there’s another shutdown, the FDA would be prevented from accepting new industry user fees for drug and medical device applications. The agency could continue to work on applications where user fees were paid before the shutdown began. Several thousand FDA employees were furloughed during the 35-day work stoppage that ended last month.

TRUMP EXPECTED TO HIGHLIGHT HEALTHCARE, DRUG COSTS DURING SPEECH

In President Donald Trump’s first State of the Union address under divided government, lowering the costs of healthcare and prescription drugs will be among five themes he’s expected to cover in the speech before Congress.

The White House last week hosted a roundtable with patients who had received surprise medical bills, an issue that could be a candidate for inclusion in the speech. Trump pledged to tackle the issue, and it’s drawn bipartisan interest on Capitol Hill, too.

A White House official said Friday that the president is expected to have “specific recommendations on drug pricing to Congress” but didn’t offer details.

In addition to highlighting FDA’s recent record approvals of generic drugs, most of the administration’s work on drug prices so far has been rule-makings and pilot programs. HHS last week proposed to eliminate drug manufacturer rebates to pharmacy benefit managers in Medicare Part D and Medicaid managed care plans. Trump could call on Congress to pass legislation to expand that to commercial insurance markets.

The president could mention HHS’ plans to test an international pricing index to reimburse for Part B drugs administered in physicians’ offices and a proposal to require manufacturers to include list prices for drugs in their consumer advertising.

Despite the administration’s flurry of activity to lower drug prices, Democrats say Trump’s plans don’t go far enough. Many Democrats are calling for Medicare to negotiate prices directly with manufacturers – a position Trump himself endorsed during the 2016 presidential campaign.

But HHS Secretary Alex Azar has been outspoken against allowing Medicare to negotiate prices, including in an interview last week, making it seem unlikely that Trump would call for Medicare negotiation in his speech.

On drug importation, which Trump also endorsed in 2016, HHS and FDA have been studying the issue in narrow circumstances but have not announced a plan.

DEMOCRATS CRITICIZE HHS DRUG REBATE PROPOSAL

Congressional Democrats said the Trump administration’s sweeping plan to overhaul Medicare drug purchases would lead to higher premiums and out-of-pocket costs for consumers.

The HHS proposal would eliminate $29 billion in now-secret rebates that pharmaceutical manufacturers pay annually to pharmacy benefit managers as the intermediaries between drugmakers and insurers. The department said the average rebate is 30 percent of a drug’s list price in Medicare Part D plans and Medicaid managed care plans. Secretary Alex Azar said those rebates incentivize higher list prices, and he wants the rebates to flow from manufacturers directly to consumers, resulting in lower costs at the pharmacy.

Democrats on Capitol Hill said the proposal – now subject to a 60-day comment period – would lead to higher insurance premiums for consumers and would not guarantee that drugmakers pass the discounts to consumers.

“The majority of Medicare beneficiaries will see their premiums and total out-of-pocket costs increase if this proposal is finalized,” House Ways and Means Committee Chairman Richard Neal, D-Mass., and House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., said in a joint statement. “While we agree that the cost of prescription drugs must be addressed, we are concerned that this is not the right approach.”

House Speaker Nancy Pelosi, D-Calif., said the plan “puts the majority of Medicare beneficiaries at risk of higher premiums and total out-of-pocket costs, and puts the American taxpayer on the hook for hundreds of billions of dollars.”

Sen. Ron Wyden, D-Ore., the top Democrat on the Senate Finance Committee, didn’t criticize the plan but said it should go further.

“I’m going to go the next step and push to force drug companies to lower their list prices to fully account for the removal of rebates rather than pocket the difference as a windfall,” Wyden said.

Senate HELP Committee Chairman Lamar Alexander, R-Tenn., praised the HHS plan, saying “rebates … ought to lower costs to patients, and this is a good first step toward that goal.”

DEMOCRATS QUESTION MANUFACTURERS ON INSULIN PRICES

Leading House Democrats last week wrote to executives of three pharmaceutical manufacturers, wanting answers on why insulin prices have “skyrocketed in recent years, putting them out of reach for many patients.”

Eli Lilly, Sanofi and Novo Nordisk received the inquiries from House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., and Rep. Diana DeGette, D-Colo., the chairwoman of the panel’s oversight and investigations subcommittee.

Although insulin was discovered more than a century ago and has been approved for decades, the price of insulin tripled between 2002 and 2012, and then nearly doubled between 2012 and 2016, the lawmakers wrote.

Pallone and DeGette asked each company a series of questions, including what their net profits from insulin sales are.

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, also singled out high insulin prices during a separate hearing last week.

HOUSE DEMOCRAT SAYS CANCER IN REMISSION

Rep. Gwen Moore, D-Wis., announced last week she has been diagnosed with small cell lymphoma but is currently in remission.

“This is a cancer I will live with for the rest of my life, but because of my high-quality healthcare and insurance coverage, it is not a cancer I will die from,” Moore said.

Moore, 67, said she was diagnosed last spring. First elected in 2004, Moore serves on the Ways and Means Committee, which has jurisdiction over CMS and Medicare Part A and Part B reimbursement policies.

SENATE COMMITTEE TARGETS DRUG INDUSTRY EXECUTIVES

The chairman of a Senate committee examining drug costs criticized pharmaceutical executives for declining to participate in a hearing last week, and so he’s expected to ask them again.

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, didn’t identify the nine pharmaceutical executives whom he invited to participate in the hearing. Only two companies agreed to testify publicly, he said.

The committee’s next hearing on drug prices, which hasn’t been scheduled, is expected to include company executives, and the panel is again contacting pharma companies about participating.

At least week’s hearing, both Grassley and the top Democrat on the committee, Sen. Ron Wyden, D-Ore., broadly hinted that if needed, subpoenas would be issued to compel testimony and document production.

“Even the big tobacco companies were willing to come to Congress and testify, and they made a product that kills people,” Wyden said during the hearing. “The drugmakers are going to have to show up as well.”

 SENATORS CIRCULATE DRAFT BILL TO PROMOTE VALUE-BASED AGREEMENTS

Two senators – one Republican, one Democrat – released draft legislation last week that they said would lower costs for medical devices and prescription drugs through innovative payment models.

Sens. Bill Cassidy, R-La., and Mark Warner, D-Va., said their draft bill would remove legal and regulatory barriers for innovative payment models, improve access, promote efficiency and lower costs.

The senators’ offices are requesting stakeholder feedback by Feb. 19.

The draft would shield certain value-based and coordinated care models from federal anti-kickback laws and exclude the models from the Medicaid “best price” rule. The senators said the “narrowly tailored exemptions” would help drive down costs for drug and medical devices while incentivizing manufacturers to create products that effectively treat patients. 

HOUSE HEARINGS FOCUS ON ACA PROTECTIONS FOR PRE-EXISTING CONDITIONS

Two House committees this week will examine the Affordable Care Act’s (ACA) protections for patients with pre-existing conditions.

A federal district court in December declared the ACA unconstitutional after Congress in 2017 repealed the law’s individual mandate by eliminating the tax penalty for people who decline to purchase health insurance. The House Energy and Commerce Health Subcommittee on Wednesday will review the impact of the court’s ruling on the law’s protections for people with pre-existing conditions. The panel hasn’t announced witnesses.

The House Education and Labor Committee will hold a hearing Wednesday on “threats faced by workers with pre-existing conditions.” The committee also hasn’t announced witnesses.

SENATE PANEL TO EXAMINE COSTS, OUTCOMES OF PRIMARY CARE

The Senate HELP Committee is scheduled to hold a hearing on Tuesday examining how primary care affects healthcare costs and patient outcomes.

Scheduled witnesses include Dr. Josh Umbehr of Atlas MD in Wichita, Kan.; Dr. Sapna Kripalani, an assistant professor of clinical medicine at Vanderbilt University Medical Center in Nashville, Tenn.; and Tracy Watts of US Healthcare Reform.

HOUSE GOP FILLS ROSTER ON FDA FUNDING PANEL

Rep. Jeff Fortenberry, R-Neb., will be the top Republican on the House Appropriations agriculture subcommittee, which approves the FDA’s federal budget.

While funding for most federal healthcare agencies and programs is included in the annual spending bill that covers the Labor, Health and Human Services, and Education departments, FDA’s appropriations have traditionally been included in Agriculture Department funding because of the agency’s food inspection programs.

Other subcommittee Republicans include Reps. Robert Aderholt, R-Ala., Andy Harris, R-Md., and Rep. John Moolenaar, R-Mich.

Rep. Sanford Bishop, D-Ga., is the subcommittee chairman.

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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