Health Policy Report

The Week in Review

Washington was abuzz as Congress returned from the Memorial Day recess with big-ticket items on its schedule. Namely, this included a House floor vote on a bill to revamp the nation’s financial regulations and the highly-anticipated testimony of former FBI Director James Comey in the Senate Intelligence Committee.

House floor action proceeded as expected, culminating in the passage of the Financial CHOICE Act (H.R. 10) on a 233-186 party-line vote. While House Republicans demonstrated unity on the measure, it is considered “dead on arrival” in the Senate, where members are considering an alternative regulatory reform law that would take a narrower approach towards boosting the struggling community banking industry.

Senate floor action was relatively quiet as senators approved low-level presidential nominees and prolonged discussion on a measure to expand sanctions on Iran in order to debate whether the bill could serve as a vehicle for sanctions on Russia. Overshadowing that work was Thursday’s hearing featuring Comey’s testimony, where the former FBI Director outlined the circumstances around his firing and detailed his belief that President Trump had pressured him to end the investigation into former National Security Adviser Michael Flynn. Lawmakers in Congress have offered a wide array of views on the investigation, but few expect the Russia probe to end, or for the issue to fade from the headlines in the near future.

Health-related developments during the week included reports suggesting that Senate Majority Leader Mitch McConnell (R-KY) hopes to get a vote on the Senate version of health reform legislation by the July 4 recess. Also, the Health and Human Services Secretary is expected to testify soon on the HHS budget for the House Appropriations Committee. Both of those stories are broken down in the roundup below.

The Week Ahead

On the docket this week for the lower chamber is a series of measures related to veterans affairs and health care, including a bill to require social security numbers be provided as a condition to receiving a health insurance tax credit (H.R. 2581), and another to alter the legal procedures governing health care lawsuits where coverage was provided or subsidized by the federal government (H.R. 1215). The Senate, meanwhile, will consider the nomination of Kenneth Rapuano to be Assistant Secretary of Defense and resume consideration of an Iran sanctions bill (S. 722). Debate on the bill has been extended as senators try to negotiate the addition of sanctions on the Russian regime to be added to the vehicle.

In the healthcare space, Senate Republicans will continue their closed-door negotiations on their health care bill, with draft legislation likely necessary to be released this week if the chamber aims to meet Leader McConnell’s goal of a vote before July 4. Democrats have sharply criticized the majority party for the opaque process, while the White House is pushing both chambers to advance a final version of the legislation to the president’s desk before the August recess. Finally, in committee action, the Senate Health, Education, Labor, and Pensions (HELP) Committee plans a hearing on drug prices this Tuesday, specifically focusing on the drug delivery system. 

Senate Eyes Late-June Vote on AHCA

While significant uncertainty remains as to the Senate’s efforts to repeal and replace the Affordable Care Act (ACA), we’re learning more this week about Republican leadership’s anticipated plans for passage. Majority Leader Mitch McConnell (R-KY) fast-tracked the House bill (H.R. 1628) last week, placing it on the Senate calendar and allowing it — as had been expected — to skip over the committee process. Leader McConnell has set the July 4 recess as a new deadline to hold a vote, and if everything goes according to plan, senators could vote on the bill as soon as June 28.

There are currently two schools of thought that are circulating among those close to the process: (1) Leader McConnell’s new deadline will lift 40-some Republican senators to a firm “yes,” and surgical concessions on pet issues (ex. opioid funding, Alaska Medicaid) might be issued to win over the holdouts; or (2) the Senate is preparing to take a failed vote that would bring a seven-year quest to repeal and replace the ACA to a definitive end, at which point bipartisan negotiations on fixing the law are likely to commence. Despite the doubtful remarks from several senators in recent weeks, the suggestion from Sen. Bill Cassidy (R-LA) — a key skeptic — that he is “very encouraged” by the GOP’s emerging plan provides a boost to the bill’s chances.

Senate staff spent their most recent recess writing the bill, but left some key decisions blank. At a party lunch last Tuesday, Leader McConnell presented a blueprint of the plan as well as several potential solutions for moving forward on internal divisions. Consistent with our previous reporting, the Senate bill will be very similar to the House-passed ACA repeal bill, despite early suggestions that the Senate would be “starting from scratch.” Changes are likely, however, to the phase-out of the Medicaid expansion, the funding and design of the tax credits, and to the waivers related to pre-existing conditions made available under the ‘MacArthur amendment.’ The Senate is somewhat constrained in the changes it can make, however, as it is required to achieve essentially the same 10-year deficit reduction goals as the House bill ($119 billion).

If a repeal bill is approved by the Senate by June 30, Republicans would still have one month before the August recess to merge the House and Senate bills, which are expected to contain some differences. Also, it’s worth keeping in mind that the end-of-June deadline is only self-imposed, so the Senate’s work could easily slip into July if more time is needed.

Secretary Price Discusses Trump’s HHS Budget in Committee Hearings

Last Thursday, Secretary Tom Price of the Department of Health and Human Services (HHS) appeared before the Senate Committee on Finance and the House Ways & Means Committee for two hearings (Senate Finance and House Ways & Means) on the Trump Administration’s fiscal year (FY) 2018 HHS budget request. The HHS Budget in Brief document unveiled in late May would cut an estimated $665 billion over ten years from the agency’s budget, derived mostly from cuts to the Medicaid program.

The Secretary faced scrutiny from Democrats in both chambers regarding the cuts, which, coupled with proposed cuts to Medicaid in the House-passed American Health Care Act (AHCA), would amount to a $1.4 trillion trim to the program. Sec. Price denied claims that Medicaid would lose any funding due to the complex “constellation” of funding changes currently being considered for the program through other avenues in Congress and regulation. Other points of discussion included the Secretary Price’s refusal to commit on funding the ACA cost sharing reduction (CSR) payments to insurers, the Department’s efforts to stem the opioid epidemic, the elimination of certain social service programs, and the potential impact of AHCA policies still under consideration in the Senate.

HHS Seeks Input on Administrative Actions on Insurance Markets

Last Thursday, the Department of Health and Human Services (HHS) issued a Request for Information (RFI) seeking comments on approaches the agency could take to reduce regulatory burdens in the individual and small group markets and saying the agency is “actively working” to further that goal under Title I of the Affordable Care Act (ACA), which includes insurance market reforms, Exchanges, premium subsidies, cost-sharing reductions, and other key provisions. The RFI cites the Trump Administration’s executive order on reducing regulatory burdens pending repeal of the ACA. The ACA Executive Order, issued on the first day of the Trump Administration, directed HHS and other agencies to leverage existing authorities to increase state flexibility and provide relief from a range of ACA provisions.

In last week’s RFI, HHS seeks comments on “changes that could be made, consistent with current law, to existing regulations under HHS’s jurisdiction that would result in a more streamlined, flexible, and less burdensome regulatory structure, including identifying regulations that eliminate jobs or inhibit job creation; are outdated, unnecessary, or ineffective; impose costs that exceed benefits; or create a serious inconsistency or otherwise interfere with regulatory reform initiatives and policies.”

The agency is specifically soliciting comments on changes to existing regulations or guidance — or other steps within existing authority — that would address the following objectives: empowering patients and promoting consumer choice, stabilizing the individual, small group, and non-traditional health insurance markets, enhancing affordability, and affirming the traditional regulatory authority of the States in regulating the business of health insurance.

HHS clarifies that it is only at the RFI stage — not yet proposed rulemaking — and seeks “complete but concise responses” to its questions. HHS provides context in the RFI on the administrative steps it has already taken, such as issuing the final market stabilization rule and streamlining direct enrollment procedures. Responses will be made publicly available at regulations.gov, and comments are due in 30 days.

House Panel Unanimously Approves FDA User Fee Reauthorization

The House Energy and Commerce Committee approved the Food and Drug Administration Reauthorization Act (FDARA) of 2017 (H.R. 2430) in a unanimous vote of 54-0 last week. The FDARA would reauthorize prescription drug, biosimilar, generic drug, and medical device user fees before they expire on Sept. 30, 2017, among various other provisions. The five-hour markup included an extensive debate about the price of prescription drugs, foreshadowing a flashpoint likely to dominate the discussion as the legislation heads to the House and Senate floors this month.

At last week’s lengthy markup, the Committee also unanimously approved three additional health-related bills and considered 11 amendments to the FDARA. Rep. Peter Welch’s (D-VT) FDARA amendment on drug importation from Canada failed in a voice vote, and Rep. Jan Schakowsky’s (D-IL) amendment expressing a Sense of Congress on lowering drug prices — balancing innovation and affordability — succeeded in a voice vote. Amendments by Reps. Brett Guthrie (R-KY) and Morgan Griffith (R-GA) on off-label communication issues did not move forward, with Democrats saying they would oppose the amendments and the whole package had those been adopted. Additionally, the committee adopted a manager’s amendment with mostly technical changes., including a requirement for hearing aid labels to include statements that they are intended only for use by adults ages 18 and over.

The committee also adopted four amendments related to medical devices. Two were offered jointly by Reps. Ryan A. Costello (R-PA) and Scott Peters (D-CA). One would require the FDA to assess issues surrounding how medical devices are serviced by third-party entities. The other amendment would create a regulatory pathway for new uses of medical imaging devices that have previously been approved. A third amendment, by Rep. Mimi Walters(R-CA) would make it easier for the FDA to classify medical device accessories according to the risk posed by the accessory, instead of the risk posed by its parent device. The fourth, from Schakowsky, would set up FDA pilot programs for the safety surveillance of certain medical devices once they are on the market.

Among health-related legislation, the Committee approved by voice vote:

• Medical Controlled Substances Transportation Act of 2017, which would allow physicians to transport controlled substances from one practice location to another.
• Sickle Cell Disease Research, Surveillance, Prevention, and Treatment Act of 2017, on which Reps. Yvette Clarke (D-NY), Michael Burgess (R-TX), and Bobby Rush (D-IL) spoke in favor.
• Congenital Heart Futures Reauthorization Act of 2017, which reauthorizes Centers for Disease Control and Prevention surveillance programs on the lifelong needs of patients with congenital heart defects as well as NIH research.

FDA Asks Drug Manufacturer to Stop Selling Opioid Amid Abuse Concern

The Food and Drug Administration, in an unprecedented move, last Thursday requested that the maker of an opioid-based pain medication cease sales of the drug. If Endo Pharmaceuticals, the maker of the drug, Opana ER, declines to voluntarily remove the painkiller from the market, the FDA is threatening to withdraw the drug’s approval for sale. The action follows the recommendation of an independent advisory committee to the FDA, which in March told the agency that the risks of abuse associated with the drug outweighed its benefit.

The drug, which has been available in 2006, was reformulated in 2012 to make it harder to abuse by crushing it and snorting it or injecting it. Instead, since the reformulation of the drug, people who wished to abuse it found it was more easily injected. Injection of the drug led to a 2015 HIV outbreak among hundreds of people in Indiana. In taking this action, the agency seemed to be sending a signal that it is getting more serious about considering the potential addictive harm of opioids along with the risks, as it's the first time the FDA has sought to completely pull an actively marketed opioid off pharmacies' shelves — and a sign that the new FDA Commissioner, Scott Gottlieb, is willing to treat drug companies as part of the problem.