United States: Capitol Hill Healthcare Update - May 2017

Senate Panel OKs FDA User Fees

Legislation reauthorizing FDA user fees for prescription and generic drugs, biosimilars, and medical devices won wide bipartisan approval last week in a Senate committee, teeing up approval by the full Senate, likely after the Memorial Day recess. The Senate HELP Committee approved the five-year renewal on a 21-2 vote. Sens. Bernie Sanders (I-Vt.) and Rand Paul (R-Ky.) voted against it. Taking the agreement negotiated by the FDA and industry stakeholders, the committee added multiple provisions – including pediatric drugs, regulation of hearing aids sold without prescriptions, and device inspections and regulation – that enjoyed bipartisan support within the committee.

Sen. Orrin Hatch (R-Utah) won approval for an amendment requiring the FDA and National Institutes of Health (NIH) to review both the accessibility and barriers to clinical trials for patients who don't respond to approved medications. The language was an effort to bridge differences between advocates of so-called right-to-try legislation and others concerned about giving patients early access to unapproved medicines. The panel also approved an amendment requiring the FDA to prioritize generic drug applications when only one company is approved to manufacture a drug.

Senators defeated 13-10 a Sanders amendment that would have allowed prescription drugs to be imported from Canada if overseas manufacturing facilities met FDA guidelines. Some opposition to the Sanders amendment was less on its substance and more on not wanting to weigh down the user fee bill with controversial language that could delay or scuttle its approval. Sanders says his amendment would allow cheaper drugs to be sold in the United States, but the pharmaceutical industry and several committee members warned of safety concerns about foreign-sourced drugs.

In an effort to placate committee Democrats, the panel's chairman, Sen. Lamar Alexander (R-Tenn.), pledged to hold a future hearing on drug prices. Sanders and others are likely to press the drug pricing issue when the user fee legislation is considered on the Senate floor.

Current user fees expire September 30. Congress is pushing to pass a renewal before the end of July. The House Energy and Commerce Health Subcommittee on Thursday approved its version of the bill.

Senate Health Discussions Continue as CBO Score Nears

Senate Republicans continued their behind-the-scenes discussions about how to change the House-approved legislation repealing and replacing the Affordable Care Act (ACA).

A group of more than a dozen GOP senators are involved in active discussions, including several meetings last week. But other, smaller groups of lawmakers also are meeting to trade ideas and share proposals, including provisions on Medicaid, tax credits to encourage low-income Americans to purchase insurance, essential health benefits and pre-existing conditions protections.

At issue is how to fulfill a long-held Republican campaign promise of repealing the ACA but also address senators' concerns about states that expanded Medicaid coverage as well as House language that could jeopardize coverage of pre-existing conditions for those seeking to purchase insurance on the individual market.

Senate leaders continue to say major changes in the House-approved bill are likely as they work to create a majority of at least 50 senators to support a bill. Republicans hold 52 Senate seats, and Vice President Pence would cast a tie-breaking vote.

Before they can seriously negotiate detailed changes, senators need an economic analysis of the House bill by the Congressional Budget Office (CBO). Because of the Senate's budget rules, only certain provisions are allowed to be included in the healthcare bill, and the Senate bill also must meet certain fiscal benchmarks. CBO isn't likely to release its score of the House bill until next week.

House Speaker Paul Ryan and the U.S. Department of Health and Human Services (HHS) Secretary Tom Price last week said they anticipated the Senate would approve its bill before Congress adjourns in late July for a month-long recess. But how Senate leaders navigate the thorny policy and political issues won't begin to become clear until after the CBO score of the House bill is released.

Governors Call on Congress to Quickly Approve CHIP

In a letter to Capitol Hill, the National Governors Association urges speedy renewal of the Children's Health Insurance Program (CHIP), but lawmakers are unlikely to act on reauthorizing the program until after Labor Day. The governors' letter says CHIP has dramatically reduced the child uninsured rate, from 15 percent in 1997 when the law was created to less than 5 percent today. The letter was addressed to the leaders of the Senate Finance Committee and the House Energy and Commerce Committee. CHIP expires September 30.

Governors hoped CHIP could be reauthorized by June, when many states finalize their budgets. But Energy and Commerce Health Subcommittee Chairman Mike Burgess (R-Texas) says passage in September is more likely. The delay is mostly because key healthcare leaders are focused on efforts to repeal and replace the ACA. But some Republican lawmakers have suggested leveraging CHIP's bipartisan support to attach to it other healthcare provisions, such as allowing insurers to sell policies across state lines, that couldn't be included in the GOP's broader healthcare overhaul.

Senators Seek Support for Children's Hospital Education

Two senators are seeking support from their colleagues to boost funding for the training of pediatric medical residents through the Children's Hospitals' Graduate Medical Education program. Sens. Sherrod Brown (D-Ohio) and Johnny Isakson (R-Ga.) are circulating a draft letter to leaders of the appropriations subcommittee that funds federal healthcare programs. So far, mostly Democratic senators have agreed to sign on; besides Isakson, the only other Republican is Sen. David Purdue (R-Ga.).

The education program – funded at $295 million this year – is designed to strengthen the pediatric healthcare workforce. Through the program, created by Congress in 1999, 57 hospitals use the funding to train more than 6,000 pediatric providers, addressing critical shortages in pediatric specialty care and improving children's access to healthcare, according to the Children's Hospital Association.

Trump Budget Expected to Call for Health Cuts

The White House is expected to release its fiscal 2018 budget request to Congress next week, and lawmakers say they're anticipating steep cuts in entitlement healthcare programs as President Trump seeks to balance the budget in 10 years. Although the administration's budget submission is an important indicator of presidential priorities, Congress isn't obligated to enact them. In fact, earlier this year the Republican Congress rejected Trump's call for cutting billions of dollars from NIH.

Trump has said Medicare is off limits to changes, but lawmakers say they're anticipating cuts to income-linked healthcare programs, potentially including Medicaid and CHIP. Discretionary spending – on everything from education to transportation – has largely been held flat in recent years. The only way to balance the budget in 10 years without raising taxes – even assuming robust economic growth – would be to reform entitlement spending.

Meanwhile, the House is in the beginning stages of drafting a budget blueprint for fiscal 2018. The appetite for reforming entitlement programs such as Medicare and Medicaid to rein in government spending has been strong among congressional Republicans, including when Speaker Paul Ryan served as chairman of the Budget Committee. It's not clear whether Trump's opposition, at least on Medicare – as well as the ongoing battle over repealing the ACA – could change the GOP's position on healthcare-related entitlement programs.

BakerHostetler's "Capitol Hill Healthcare Update" is distributed weekly when Congress is in session. To access previous postings, please see the Health Law Update Blog.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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