TRP Health Policy Report

Last week, the Senate voted to pass fast-track trade legislation by a vote of 62-37, handing President Obama a major policy victory.  Senate approval sets up a bruising fight next month in the House, where the fate of the President’s “trade promotion authority” is far from assured.  During debate in the Senate, Majority Leader Mitch McConnell (R-KY) won the support of several pro-trade Democrats by promising them a vote next month on an amendment reauthorizing the Export-Import bank, which expires on June 30. Also, before adjourning for the Memorial Day recess, the upper chamber approved a House-passed measure that would give Congress additional time to identify a long-term solution to fund federal highway projects.  The bill authorizes infrastructure projects until July 31, at which point the Highway Trust Fund will have exhausted all of its funds. 

Separately, the House passed a human trafficking bill (S.178) by a vote of 420-3. The lower chamber also passed the America COMPETES Act (H.R. 1806) along a party-line vote of 217-205. The bill sets the priorities for research programs at the National Science Foundation (NSF), the Department of Energy and the National Institute of Standards and Technology (NIST). It has drawn criticism from many scientific organizations, which say that the plan would limit the agencies’ ability to fund the most promising research, as well as from the White House.
 
The Week Ahead
 
The House and Senate are in recess this week. Both chambers will reconvene on Monday, June 1.
 
House Committee Passes 21st Cures Initiative
 
On Thursday, the House Energy and Commerce Committee – somewhat miraculously – unanimously passed the 21st Century Cures Act. The measure creates new disease research initiatives, establishes new incentives for drug makers to study rare conditions and places a much greater focus on patient data to encourage more "personalized medicine." The bill approved by the Committee also includes a $550 million Cures Innovation Fund, and protects the Food and Drug Administration’s (FDA) user fees funding from sequestration cuts. The bill also includes $13.2 billion in offsets to help pay for significantly increased funding levels for the National Institutes of Health (NIH) and the FDA. The funding offsets in the legislation includes the sale of some of the nation’s strategic petroleum reserves, modifies the timing of pre-payments on Medicare Part D, limits the federal Medicaid matching for durable medical equipment reimbursement to Medicare rates, and accelerates the modernization of x-ray imaging.
 
Chairman Fred Upton (R-MI) of the House Energy and Commerce Committee stated that he hopes to have the legislation to the House floor by the third week of June with the goal of having the Senate vote on the bill by August. Chairman Upton has expressed his desire to have the measure sent the President by the end of the year. The Senate Health, Education, Labor, and Pensions (HELP) Committee is working on a parallel effort to the Cures legislation, although with much less urgency. Chairman Lamar Alexander (R-TN) has stated that he does not expect to finish the Senate version until early next year, at the soonest.
 
Debate Continues Over 340B as Lawmakers Scrap ‘Cures’ Proposal
 
The House Energy and Commerce Committee opted not to include 340B reforms as part of the 21st Century Cures bill after some hospitals said changes to the drug discount program would have been a rushed, and potentially unwise addition to the legislation. Both industry stakeholders and lawmakers hope to continue discussions on the issue. According to senior aides, initial discussions on reforms to the 340B program would have tightened the definition of patients eligible for the program. The reforms would have also made hospitals closely track how savings from discounts are spent and require greater accountability from pharmacies that contract with hospitals. Further, pharmacies that contract with hospitals to dispense drugs would have come under increased scrutiny, according to aides with knowledge of the discussions. Lastly, to help fund additional government oversight of the new requirements, hospitals would have been asked to pay a 0.1 percent user fee on each drug for which they receive a discount.
 
Congressional interest in the program has increased as the White House Office of Management and Budget continued to review Health Resources and Services Administration regulations and guidance on 340B. Some industry stakeholders have argued that changes to the 340B program should go through the notice and comment rulemaking process so that all stakeholders have a chance to comment on them, rather than Congressional action.
 
Washington Takes on Opioid Abuse
 
The issue of addressing opioid abuse in the United States has garnered the attention of lawmakers as drug overdoses continue to increase in the United States. The House Energy and Commerce Committee has held a series of hearings on the topic this year, with the latest one occurring on last Thursday. The hearing focused on the interplay between mental health services and substance abuse treatment, the current effects of sequestration on substance abuse programs, the potential for requiring continuing medical education (CME) on pain treatments, and the feasibility of mandatory federal prescription guidelines for opioids. In general, Republicans and Democrats agreed that the federal government must play a larger role to help decrease the legal and illegal opioid abuse problem. However, Democrats urged for increased federal funding to confront the opioid abuse problem, while Republicans argued that government resources must be better allocated and streamlined to assist the states.
 
Separately, Senate Majority Leader Mitch McConnell (R-KY) and Sen. Ed Markey (D-MA)—not a regular duo—wrote a letter to Sylvia Mathews Burwell, Secretary for the Department of Health and Human Services (HHS), asking her to call on the Surgeon General to address opioid abuse and for more information on HHS's recently-announced initiative to reduce opioid-related deaths and addictions. The issue of opioid abuse has also become a topic of interest for Presidential hopeful, Hillary Clinton, who stated that she would address the issues of substance abuse and mental health as part of her campaign.
 
Report finds 31 Million U.S. Residents Were Underinsured in 2014
 
Approximately 31 million U.S. residents with health coverage are underinsured, according to a recent report from the Commonwealth Fund. The study noted that the number of underinsured has doubled since 2003, largely driven by an uptick in high-deductible health plans. The survey considered individuals to be underinsured if they had health coverage but were responsible for out-of-pocket medical costs exceeding what they could afford. However, the survey did not account for individuals who were uninsured prior to 2014, and was not able to assess the Affordable Care Act's (ACA) effects. Specifically, the report found that 14 million U.S. adults were underinsured in 2014 since their health plans' deductibles amounted to at least 5 percent of their annual incomes. That number is up from 11 million who were considered underinsured because of high-deductible health plans in 2012.
 
Further, the survey found that 27 percent of survey respondents had deductibles ranging from $1,000 to $2,900 last year. Accordingly, 50 percent of underinsured adults and 41 percent of adults with private coverage who had deductibles of at least $1,000 reported that they paid at least $4,000 in accumulated medical bills. Meanwhile, an additional 24 million U.S. adults had lower deductibles but were underinsured when accounting for the cost of deductibles, co-insurance, copayments, out-of-network provider use and health services not covered under their plans. Individuals who fell into this category were considered underinsured if their total out-of-pocket costs equaled at least 10 percent of their annual incomes. Individuals with incomes of 200 percent of the federal poverty level were considered underinsured if their total out-of-pocket costs equaled at least 5 percent of their annual incomes.  Overall, the survey found that 23 percent of U.S. adults were underinsured last year, similar to the rate in 2012. Accordingly, individuals who were employed by small businesses were more likely to be underinsured.