United States: Capitol Hill Healthcare Update - May 14, 2018


On Capitol Hill, reaction to President Donald Trump's "American Patients First" plan to bring down prescription drug prices fell predictably along partisan lines: Republicans generally praised it, while Democrats criticized it for not going nearly far enough.

Republicans weren't effusive in their support, but House Ways and Means Committee Chairman Kevin Brady, R-Texas, praised Trump for "leading the charge" to lower drug prices. House Energy and Commerce Committee Chairman Greg Walden, R-Ore., "applauded" Trump for "working to lower the cost of important medications."

After Trump backed away from proposing that Medicare negotiate prices with drug companies – something he campaigned on in 2016 – Democrats sharply criticized the president. "I think very expensive champagne will be popping in drug company boardrooms across the country tonight," said Rep. Elijah Cummings, the top Democrat on the House Oversight and Government Reform Committee.

"The president's proposals are yet another giveaway to big pharma and do nothing to hold wealthy drug companies accountable for their unconscionable price gouging," said House Democratic Leader Nancy Pelosi, D-Calif. Sen. Patty Murray, D-Wash., the ranking Democrat on the Senate Committee on Health, Education, Labor and Pensions (HELP), said Trump was "all tweets and no leadership."


Although President Trump said his administration would take "the most sweeping action in history" to lower prescription drug prices, he's not calling on Congress to help him.

That's likely a recognition that hyper-partisanship and election-year politics make congressional consensus on large-scale healthcare reform improbable in the short term. Instead, the White House's plan relies mostly on regulatory actions, guidance documents and demonstration projects that Health and Human Services (HHS), the Food and Drug Administration (FDA) or the Centers for Medicare and Medicaid Services (CMA) could do on its own.

For example, Trump's plan proposes CMS regulatory changes to allow Medicare Part D plans to experiment with competitive acquisition and utilization management tools that private health plans already use for drugs administered in physicians' offices. Trump also says FDA can change the rules around direct-to-consumer advertising to require pharmaceutical manufacturers to include a drug's list price in ads along with the medication's side effects.


A House Appropriations subcommittee last week approved FDA's fiscal 2019 budget that increases agency funding by $308 million.

FDA would receive $3.1 billion in discretionary funding, and when adding industry user fees, FDA's budget would grow to $5.57 billion.

The subcommittee approved a net increase of $303 million for medical product safety activities, including an increase of $5 million for the new Oncology Center of Excellence and $27 million for generic drug application reviews. The bill's focus on medical product safety covers a broad spectrum of public health and safety matters – from $30 million to fight opioid abuse to $38.5 million to advance modern drug and biological product manufacturing.

The next step for the agency's budget is a vote by the full Appropriations Committee, which hasn't been scheduled.

Meanwhile, the Senate Appropriations subcommittee with jurisdiction over FDA held a hearing on the agency's budget last month, but the panel has yet to introduce a spending bill.


A Senate appropriations subcommittee on Thursday will hear testimony from the National Institutes of Health (NIH) Director Francis Collins on his agency's fiscal 2019 budget.

Collins is scheduled to appear before the Senate Appropriations subcommittee that funds federal healthcare programs, which is chaired by Sen. Roy Blunt, R-Mo.

President Trump's fiscal 2019 budget proposed that NIH receive $35.5 billion, a $500 million increase after the White House called on Congress to cut the agency's budget the year before. But lawmakers last month had already boosted NIH spending to $37.1 billion for the current fiscal year, with the added money targeting Alzheimer's disease research, opioids and a universal flu vaccine.


The House Energy and Commerce Committee last week approved more than two dozen opioid-related bills designed to combat the national crisis, and the committee will vote on more bills Wednesday, including controversial legislation such as changes to Medicare payments for certain non-opioid painkillers and rules about patient privacy.

Committee Chairman Greg Walden, R-Ore., said he wants comprehensive opioid legislation ready for a House floor vote before Memorial Day. While that's still possible, House leadership aides say a June vote is more likely.

The bills approved by Walden's committee are mostly narrow, such as establishing best practices for overdose patients brought into emergency rooms and helping educate pharmacists to detect fraudulent prescriptions. Other provisions would provide FDA with flexibility to promote alternative pain treatments, allow nurse practitioners and physician assistants to prescribe medication-assisted treatments, and establish uniform guidelines for local opioid recovery centers.

Committee Democrats say the panel should be considering more far-reaching legislation, including allowing for Medicaid coverage of methadone treatment.

Meanwhile, the House Ways and Means Committee announced it would vote on a series of opioid bills under its jurisdiction, including one that would call on HHS to develop guidance on pain management and opioid diversion prevention for hospitals. The House Homeland Security Committee on Wednesday will vote on legislation designed to better detect and prevent fentanyl and other synthetic opioids from entering the United States.


Officials from HHS' inspector general program and Congress' watchdog agency are scheduled to testify Tuesday before the Senate HELP Committee.

Ann Maxwell, an assistant inspector general at HHS, and Debra Draper, the director of the healthcare team at the Government Accountability Office, will testify before the committee. This will mark the panel's second 340B Discount Drug Program hearing in recent months.

Chairman Lamar Alexander, R-Tenn., during a committee hearing earlier this spring, said he sympathized with the economic concerns of 340B hospitals, which say their spending on uncompensated care dwarfs savings received under the drug discount program. Still, Alexander said he would support more transparency into "how much of the discounted savings goes directly to the patient who walks in the door with a prescription. We don't know how much goes directly to patients or how much is spent for other services that presumably benefit patients."


Republicans in the House and Senate are expressing increasing reservations about President Trump's proposed clawback of $15.4 billion in expired government funding, including rescinding $7 billion from the Children's Health Insurance Program (CHIP).

The White House says the overall recessions package includes funding previously approved but not spent, and rescinding the money would send a powerful message to voters that Washington was serious about controlling spending. Administration officials also said taking back the money wouldn't negatively impact CHIP or the families that rely on it.

But some Republican lawmakers remain cool to the recessions package, not only because it would target funding from the popular children's health program but also because they would gain little credit for reducing the deficit by voting for it. Approving the $15.4 billion rescission proposal would reduce the deficit by only $1.3 billion over 11 years, according to the Congressional Budget Office.

Given the thorny politics and lack of meaningful impact on the deficit, some Republican lawmakers openly questioned last week why they should vote for the legislation. House GOP leaders are short of the majority needed to advance the rescissions package. They hope to schedule a House floor vote as soon as this week, after more lobbying of rank-and-file lawmakers.


The top Democrats on the Senate's key healthcare committees want Novartis to explain why it paid $1.2 million to President Trump's personal lawyer to consult on healthcare policy matters.

In a letter to Novartis CEO Dr. Vasant Narasimhan, Sen. Ron Wyden, D-Ore., wrote with "deep concern" that the pharmaceutical company's payments to a consulting firm established by Trump's personal attorney, Michael Cohen, were meant to skirt federal lobbying laws.

Wyden, the ranking Democrat on the Senate Finance Committee, said that at the same time Novartis hired Cohen, the manufacturer's in-house lobbyists were meeting with CMS officials about a novel reimbursement model for a newly approved immunotherapy. The senator also asked Novartis to explain why it chose to hire Cohen at four times the price it paid for outside registered lobbyists the company retained.

Sen. Patty Murray, D-Wash., in a separate letter to Narasimhan, said the Cohen engagement "raises serious concerns about the lengths Novartis was willing to go in order to curry favor with this administration and, perhaps more troublingly, what it expected or was promised in return."

Murray, the top Democrat on the HELP Committee, demanded Novartis answer a series of questions about the Cohen arrangement and the company's interactions with administration officials.


Legislation approved unanimously last week by the House Energy and Commerce Committee would for the first time create a user fee program for over-the-counter (OTC) drugs.

Introduced by Rep. Bob Latta, R-Ohio, the legislation would update the 40-year-old OTC monograph system and allow new products to come to market more quickly. FDA could make scientific determinations for OTC ingredients through an administrative order process, which is much more efficient than the current rulemaking monograph system, Latta said.

The bill would authorize $134 million over five years for FDA to hire as many as 100 new reviewers and other staff for OTC work. The bill also would give OTC manufacturers 18 months of market exclusivity. Committee Republicans defeated Democrat-led efforts to shrink that exclusivity to 12 months.

Similar bipartisan legislation by Sens. Johnny Isakson, R-Ga., and Bob Casey, D-Pa., won approval last month in the Senate HELP Committee. Among the major differences between the two bills, the Senate version includes 24 months of exclusivity for new OTC products.


Two House Democrats introduced legislation last week that would fine pharmaceutical manufacturers $100,000 each day they failed to correct misclassified drugs in the Medicaid program.

Under current law, companies are required to identify a drug as either a generic or a brand when they seek coverage under Medicaid. Manufacturers of brand drugs give the government a 23.1 percent rebate; generics receive a 13 percent rebate.

But HHS' inspector general last December reported that hundreds of brand-name drugs in the Medicaid rebate program were classified as generics – meaning their manufacturers offered the government less of a rebate. That misclassification may have forced Medicaid to pay as much as $1.3 billion more for drugs than it was required to between 2012 and 2016.

Introduced by Reps. Kurt Schrader, D-Ore., and Peter Welch, D-Vt., the legislation would require CMS to notify manufacturers of misclassified drugs. If manufacturers failed to correct the reporting within 30 days, they could be fined $100,000 per day.


A senior House Democrat introduced legislation last week that would give FDA authority to block prescription drug and medical device manufacturers from charging an "excessive price" for their products.

Introduced by Rep. Rosa DeLauro, D-Ct., the bill would require manufacturers to disclose their prices to a newly created board at FDA. If prices increased 2 percent per annual quarter more than inflation, the board could reduce the manufacturer's patent exclusivity and impose fines, and companies also would be liable for civil action.

DeLauro said her bill was designed to thwart "price gouging" by pharmaceutical and medical technology manufacturers.

She introduced identical legislation in 2016, and only eight House lawmakers co-sponsored that bill. It's unlikely her legislation would gain traction in the Republican-controlled House.

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