Health Policy Report

The Week in Review

The House convened for their last week of legislative business prior to the midterm elections. Prior to leaving for the campaign trail, lawmakers passed key legislative priorities including: (1) a “minibus” package containing funding bills for Defense-Labor, Health and Human Services (HHS) , Education (bill text; conference report; summary), (2) a sweeping opioid crisis response bill (H.R. 6); and (3) legislation (H.R. 302) that reauthorizes the Federal Aviation Administration (FAA) for five years. The Defense-Labor-HHS package — which was signed into law by President Trump on Friday — also included a continuing resolution (CR) through December 7^th allowing Congress to avert a shutdown and punt decisions on unresolved issues until after the mid-term elections.

Additionally, the lower chamber cleared a trio of "Tax Reform 2.0" bills, including: (1) The Family Savings Act (text; summary); The Protecting Family and Small Business Tax Cuts Act (text; summary); and (3) The American Innovation Act (text; summary). House passage of the package is largely seen as a messaging exercise ahead of the midterm elections, as Senate leadership does not plan to hold a vote on tax legislation prior to November's midterm elections. 

House lawmakers also considered dozens of measures under suspension of the rules, including two Senate-passed bills — The Patient Right to Know Drug Prices Act (S. 2554) and the Know The Lowest Price Act (S. 2553) — that seek to crack down on the use of “gag clauses” that prevent pharmacists from telling customers that they could save money by paying cash out-of-pocket rather than using their insurance benefit. S. 2554 applies to all private insurance plans, whereas S. 2553 covers Medicare Part D and Medicare Advantage plans.

It was a high-drama week in the upper chamber as Senators examined an allegation of sexual misconduct against Supreme Court nominee Brett Kavanaugh. Following a lengthy set of negotiations over next steps, Senate Majority Leader Mitch McConnell (R-KY) began the formal process of considering Kavanaugh’s nomination on Friday after the Senate Judiciary Committee voted 11-10 to advance his nomination. However, a deal was brokered in the Committee to delay a final up-or-down floor vote until the FBI had a week to conduct an investigation into the allegation. President Trump has directed the bureau to proceed with the investigation with instructions to conclude by October 5^th.

Additional action on the Senate floor included unanimous consent (UC) passage of a short-term funding fix for the Federal Aviation Administration (FAA). Passage of the short-term fix will keep the agency funded for an additional week while the Senate considers the House-passed bill. The Senate also held final confirmation votes for the nominations of Jackie Walcott to be a Representative of the United States to the International Atomic Energy Agency (IAEA) and Peter Feldman to be Commissioner of the Consumer Product Safety Commission (CPSC).

The Week Ahead

While the Kavanaugh nomination remains in flux, the Senate will turn its attention to other high-profile legislative items. When the chamber returns Monday, Senators will immediately proceed to consideration of a bill (H.R.302) that would reauthorize the FAA for five years. Additional floor action in the Senate for the balance of the week includes a final vote on the opioid crisis response legislation, which would send the bill to President Trump’s desk for signature into law.

House lawmakers have left Washington and are not scheduled to be in session until after the November midterm elections.

House Passes Opioid Legislation with Minor Changes

The House passed sweeping legislation to address the opioid epidemic on a 393-8 vote last Friday. The vote came after Congressional leaders introduced minor last-minute changes to address a CBO score that indicated that the bill did not achieve budget neutrality, costing the government $44 million over a decade. An updated score following the changes showed that the revised legislation would save $2 million over ten years. The changes achieve the net savings by: broadening the Affordable Care Act’s (ACA) religious exemption, and addressing biosimilar product licensing.

The first provision would exempt individuals from the ACA’s individual mandate who choose to forego medical care for religious reasons. The CBO expects that this change would lower the number of ACA enrollees who qualify for federal subsidies to purchase private insurance under the law. An addition amending the recently passed Patient Right to Know Drug Prices Act (S. 2554) would mandate greater reporting requirements when biologic manufacturers enter into deals with biosimilar makers to keep medicines that would compete with brand-name biologics off the market for a set period of time. The CBO anticipates that this would discourage such deals and make biologic medicines cheaper, reducing federal spending.

The final package did not include an unrelated change to the financing of drugs for beneficiaries in the Medicare Part D coverage gap the pharmaceutical industry had been lobbying for. The measure would have reduced the share of drug costs that pharmaceutical companies must cover beginning in 2019 for beneficiaries in the so-called “donut hole” from 70% to 63%, and its inclusion was the topic of speculation last week after originally being discussed in a bicameral meeting on the opioid legislation. Additionally, the opioid package is not expected to include any version of the generics industry-favored CREATES Act (H.R. 2212, S. 974), which was rumored to have been included in exchange for the Medicare donut hole change.

The Senate is expected to take up the legislation late next week or the week of October 8. Following anticipated Senate passage, the bill will head to President Trump’s desk for a signature.

House Passes Measure to Fund Healthcare, Other Programs

The House voted 361-61 last Wednesday to pass a Senate-approved bill to fund the Departments of Defense, Labor, Health and Human Services (HHS), and Education for fiscal year 2019. Included in the “minibus” appropriations package was a continuing resolution (CR) to fund the remaining pieces of the federal government for which no 2019 funding bill has passed until December 7, 2018. The CR will allow Congress the time to negotiate and pass the remaining funding bills for 2019 after the 2018 midterm elections. The funding bill provides approximately $90.5 billion in discretionary funding for the Department of Health and Human Services, a $2.3 billion increase above the comparable FY2018 level. In addition, the bill includes $711 million for activities authorized by the 21st Century Cures Act. The Defense-Labor-HHS-Education appropriations minibus has been signed by President Trump, averting a shutdown on October 1.

 Congress Clears Anti-'Gag Clause' Measures

Last week, the House approved by voice vote two Senate-passed bills (S. 2553; S. 2554) that would ban so-called “gag clauses” in pharmacy benefit manager (PBM) contracts. While contracts between pharmacists and PBMs are confidential, there have been allegations that they sometimes contain clauses that prohibit pharmacists from telling consumers that paying cash for a prescription might cost them less than their health insurance copayment.

PCMA, the leading PBM trade association, has endorsed the legislation. S. 2553 passed the Senate in early September and banned the clauses for Medicare Part D and Medicare Advantage. The Senate followed up by passing S. 2554 last week, which applies to private insurance contracts. The two bills now await President Trump’s signature