Sitting Here on Capitol Hill: Congressional Developments on Life Science and Consumer Product Issues - July 2019 #2

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In This Issue

Consumer Product Safety: House Committee Approves Six Bills
Drug Pricing: House Committee Approves Drug Price Justification Bill
Drug Pricing: Senate Committee Approves Pricing Reduction Legislation
Bill Introductions
Biologics: House Dems Urge USTR to Drop Marketing Exclusivity Language from USMCA
Regenerative Therapies: Bipartisan Letter Raises Concerns over Unapproved Stem Cell Products
Cannabis: Senate Hearing on Safe Harbors for Financial Institutions
Industrial Hemp: Senate Hearing on Hemp Production and 2018 Farm Bill
Blockchain: Senate Committee Schedules Hearing on Regulatory Frameworks

Legislation

Consumer Product Safety: House Committee Approves Six Bills

Responding to what they claim has been a failure of the Consumer Product Safety Commission (CPSC) to act in recent years, the House Energy and Commerce Committee adopted six bills that would aim to eliminate injuries from a variety of products.

In his remarks during the subcommittee markup session on July 10, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) argued that congressional action is needed given that the CPSC is “too slow to act, too timid, or too deferential to industry.”

Following are the six bills that were adopted by the committee.

These bills now move to the House floor for consideration. The floor schedule has not yet been determined.

Drug Pricing: House Committee Approves Drug Price Justification Bill

As part of a markup session on July 17 of 10 bipartisan health bills, the House Energy and Commerce Subcommittee on Health approved legislation that would require drug manufacturers to submit documentation to the Department of Health and Human Services (HHS) 30 days before increasing the price of a qualifying drug.

Introduced by Reps. Jan Schakowsky (D-IL) and Francis Rooney (R-FL), the “More Efficient Tools to Realize Information for Consumers” (METRIC) Act (H.R. 2296) would require manufacturers to report their justification for an increase in the wholesale acquisition cost (WAC) of a qualifying drug should the manufacturer decide to increase the price by 10 percent or more over a 12-month period, or by 25 percent or more over a 36-month period. A manufacturer of a qualifying drug would be required to report the total expenditures for manufacturing the qualifying drug, the research and development expenditures for the drug, and total revenue and net profit generated by the drug, as well as other documentation as applicable.

The committee also approved nine other health bills during the markup session:

  • The Educating Medical Professionals and Optimizing Workforce Efficiency and Readiness for Health (EMPOWER for Health) Act (H.R. 2781);
  • The Title VIII Nursing Workforce Reauthorization Act (H.R. 728);
  • The Autism Collaboration, Accountability, Research, Education, and Support (Autism CARES) Act (H.R. 1058);
  • The Newborn Screening Saves Lives Reauthorization Act (H.R. 2507);
  • The Emergency Medical Services for Children Program Reauthorization Act (H.R. 776);
  • The Lifespan Respite Care Reauthorization Act (H.R. 2035);
  • The Community Health Investment, Modernization, and Excellence Act (H.R. 2328);
  • The Territories Health Care Improvement Act (H.R. 3631); and
  • The No (billing) Surprises Act (H.R. 3630).

The last two bills—H.R. 3630 and H.R. 3631—were incorporated into the text of H.R. 2328 during the markup session.

As with the consumer product safety bills that were approved by the House Energy and Commerce Committee, these bills now move to the House floor for consideration. The floor schedule has not yet been determined.

Drug Pricing: Senate Committee Approves Price Reduction Legislation

The Senate Finance Committee approved bipartisan legislation—the Prescription Drug Pricing Reduction Act (PDPRA)—on July 25 that would make reforms in Medicare and Medicaid as it relates to drug pricing. Other provisions in the bill aim to increase transparency and curb future abuses. The bill was introduced by Senate Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Ron Wyden (D-OR).

Specifically, the bill would require the HHS to make public on its website, beginning on July 1, 2022, data reported to it by insurers and pharmacy benefit managers (PBMs) under Medicare Part D requirements on an aggregate basis. In addition, the HHS would be required to report discrepancies related to direct and indirect remuneration information submitted by Part D plans and results of independent financial audits. The bill would also require Part D insurers to conduct audits of PBMs and report certain financial information to pharmacies and the HHS.

With respect to manufacturers, the bill would require a mandatory rebate if a pharmaceutical manufacturer increases its list price for certain covered Part D drugs above inflation. Further, it would require a manufacturer to submit justifications to the HHS for price increases for prescription drugs and biologics where the HHS determines that the manufacturer’s price increase met or exceeded certain thresholds. The HHS would be required to publicly post the price justifications.

With respect to Medicaid, the bill would require enhanced auditing and reporting of the price and drug product information reported by manufacturers of covered outpatient drugs. It would also limit payment to PBMs under Medicaid to prevent abusive spread pricing and require DHHS to conduct surveys regarding payments for and prices of drugs covered under Medicaid programs.

The bill passed the committee by a 19-9 vote, and now moves to the Senate floor where the schedule has not yet been determined.

Bill Introductions

Senate

  • S. 2161 – Introduced on July 18 by Sen. Ted Cruz (R-TX); co-sponsored by Sens. Ron Johnson (R-WI) and Mike Lee (R-UT). A bill to amend the Federal Food, Drug, and Cosmetic Act to provide for reciprocal marketing approval of certain drugs, biological products, and devices that are authorized to be lawfully marketed abroad. Bill was referred to the Senate Health, Education, Labor, and Pensions (HELP) Committee.
  • S. 2182 – Introduced on July 18 by Sen. Edward Markey (D-MA); co-sponsored by Sen. Richard Blumenthal (D-CT). A bill to protect consumers from security and privacy threats to their motor vehicles. The bill was referred to the Senate Commerce, Science, and Transportation Committee.
  • S. 2186 – Introduced on July 18 by Sen. Jeff Merkley (D-OR). A bill to require entities to provide consumers with the opportunity to prohibit the entity from collecting or using certain data concerning the consumer and to request deletion of such data. Bill was referred to the Senate Commerce, Science, and Transportation Committee.
  • S. 2201 – Introduced on July 22 by Sen. Bob Menendez (D-NJ); co-sponsored by Sens. Rand Paul (R-KY), Jeff Merkley (D-OR) and Kevin Cramer (R-ND). The Clarifying Law Around Insurance of Marijuana (CLAIM) Act would create a safe harbor for insurers engaging in the business of insurance in connection with a cannabis-related business. The bill was referred to the Senate Banking, Housing, and Urban Affairs Committee.
  • S. 2247 – Introduced on July 24 by Sen. John Kennedy (R-LA); co-sponsored by Sens. Jon Tester (D-MT), Shelley Moore Capito (R-WV), Sherrod Brown (D-OH), Bill Cassidy (R-LA), James Lankford (R-OK), Steve Daines (R-MT), Kevin Cramer (R-ND), Cindy Hyde-Smith (R-MS), Joe Manchin (D-WV), Roger Wicker (R-MS). A bill to provide greater transparency of discounts provided by drug manufacturers, to establish requirements relating to pharmacy-negotiated price concessions. The bill was referred to the Senate Finance Committee.
  • S. 2252 – Introduced on July 24 by Sen. Chris Van Hollen (D-MD); co-sponsored by Sen. Ben Cardin (D-MD). A bill to expand the permitted uses of drug price information disclosed to states under the Medicaid drug rebate program. The bill was referred to the Senate Finance Committee.

House

  • H.R. 3805 – Introduced on July 17 by Rep. Mike Gallagher (R-WI). A bill to reform prescription drug pricing and reduce out-of-pocket costs by ensuring consumers benefit from negotiated rebates. Bill was referred to the House Energy and Commerce Committee.

Letters and Statements

Biologics: House Democrats Urge USTR to Drop Market Exclusivity Language from USMCA

A group of 104 House Democrats wrote U.S. Trade Representative Robert Lighthizer to request language that would provide 10 years of marketing exclusivity for brand biologics from the U.S.-Mexico-Canada Trade Agreement (USMCA).

In the July 11 letter, the House Democrats asserted that the USMCA would maintain high prescription drug prices “by increasing and locking in 10 years of marketing exclusivity for brand biologics, expanding the scope of brand biologics eligible for protection, and making it easier for brand-name drug companies to extend their monopolies through additional patents, patent extensions, and other forms of patent ‘evergreening.’”

The letter also argued that the proposed language in the USMCA would prevent Congress from having the ability to adjust the biologics exclusivity period, which would lock the U.S. into policies that keep cancer and other drug prices high. According to the letter’s signees, it would result in this model being exported to Mexico, which has no additional exclusivity period for biologics, and to Canada, which has an eight-year period.

Regenerative Therapies: Bipartisan Letter to FDA Raises Concerns over Unapproved Stem Cell Products

The bipartisan leaders of the House Energy and Commerce Committee sent a letter to the Food and Drug Administration (FDA) on July 25 seeking more information on the agency’s strategy for enforcement and bringing stem cell products into compliance to protect consumers.

The letter outlines concerns over the slower than expected progress of manufacturers and providers of stem cell products to come into compliance with the FDA’s guidance and premarket approval requirements, including those established by the 21st Century Cures Act. According to a committee press release, the letter comes after the FDA recently announced that it has sent letters to 20 manufacturers and providers who may be offering unapproved stem cell products.

As part of their inquiry, the committee leaders requested answers to a series of questions, including:

  • How is the agency’s current work on regenerative medicine therapies, including stem cells, resourced?
  • Is the FDA considering other strategies to encourage developers to engage with the agency early on?
  • How many agency officials are working to monitor adverse event reporting and respond to safety signals related to stem cell therapies? Would additional resources help the agency to conduct a more rigorous survey of the market?
  • As the FDA prepares for November 2020, and the planned end to the agency’s policy of enforcement discretion, how will it communicate the transition to enforcement to non-compliant stem cell clinics?
  • How is the FDA coordinating with other state and federal agencies?

The letter was signed by Chairman Frank Pallone, Jr. (D-NJ), Ranking Member Greg Walden (R-OR), Rep. Diana DeGette (D-CO), and Rep. Fred Upton (R-MI).


Hearings

Cannabis: On July 23, the Senate Banking, Housing, and Urban Affairs Committee held a hearing entitled, “Challenges for Cannabis and Banking: Outside Perspectives.” This hearing focused on legislation—The Secure and Fair Enforcement (SAFE) Banking Act (S.1200) —that would create safe harbors for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses.

Hemp Production: On July 25, the Senate Agriculture, Nutrition, and Forestry Committee held a hearing entitled, “Hemp Production and the 2018 Farm Bill.” The hearing focused on the legalization and promotion of industrial hemp.

Blockchain: The Senate Banking, Housing, and Urban Affairs Committee has scheduled a hearing for July 30 that will examine regulatory frameworks for digital currencies and blockchain.

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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