Health Policy Report (11/25)

November 25, 2019

The Week in Review

Congress adjourned for the Thanksgiving district work period following enactment of a one-month continuing resolution (CR) that will fund the government through Dec. 20. Lawmakers in the House and Senate cleared the stopgap funding measure ahead of last Thursday’s funding deadline, providing appropriations negotiators with additional time to strike a broader funding deal for fiscal year (FY) 2020. House Appropriations Chairwoman Nita Lowey (D-NY) and Senate Appropriations Chairman Richard Shelby (R-AL) have reportedly struck a deal on subcommittee allocations for each of the FY 2020 funding measures, allowing lawmakers to push for passage of each bill before the end of the calendar year.

In addition to the CR, House lawmakers passed [251-158] a measure out of the Education and Labor Committee that seeks to address workplace violence in the health care and social service sectors. Specifically, the bill would require the Secretary of Labor to issue an occupational safety and health standard mandating that certain employees within the health care and social service industries develop and implement a comprehensive workplace violence prevention plan. The bill passed with modest bipartisan support, as 32 Republicans joined the majority in support of H.R. 1309. However, the bill is not expected to be considered in the GOP-controlled Senate after the Trump administration issued a veto threat.

The Week Ahead

Congress will return to Washington the week of Dec. 2 to begin an end-of-the-year legislative blitz. In addition to funding for FY 2020, legislative movement could happen on big-ticket priorities such as the United States-Mexico-Canada Agreement, prescription drug pricing, and tax extenders. The Senate will return first on Monday, Dec. 2, with the House reconvening a day later on Tuesday, Dec. 3. 

Administration Releases Fall 2019 Unified Regulatory Agenda for HHS

The federal Office of Management and Budget (OMB) released its Fall Unified Agenda of Regulatory and Deregulatory Actions (Unified Agenda) last week, including new information on forthcoming rules from the Department of Health and Human Services. OMB noted that the regulatory plan is grounded in “confidence in private markets and individual choices,” allowing agencies to reassess and “lower the burden of regulation on the American people.” OMB generally releases the Unified Agenda in the spring and fall. The timelines included in the Unified Agenda tend to be aspirational but demonstrate the administration’s priorities. Administrations historically seek to solidify their regulatory actions earlier in presidential election years in order to make it harder to overturn in the event control of Congress or the White House should change.

Notably, this fall’s Unified Agenda included the administration’s controversial drug importation concept, which is expected to propose the creation of a pilot project to allow states, wholesalers and pharmacists to import drugs from Canada at a lower price than in the U.S. The administration estimates the FDA will issue the importation guidance in January 2020, while delaying several other prescription drug rulemakings. HHS also pushed, until at least later this month, the release of its proposed rule to create the Medicare International Pricing Index model. In addition, HHS’ Office of the National Coordinator for Health IT (ONC) projects it will issue its highly anticipated information blocking regulation this month, while CMS has signaled it could take until March 2022 to finalize its interoperability and patient access rulemaking.

Grassley Previews Amendments to Drug Pricing Bill

Senate Finance Chairman Chuck Grassley (R-IA) told a crowd gathered in the Russell Senate Office Building last week that he would release an updated version of his bipartisan drug pricing legislation “in the coming weeks.” At an event sponsored by the Committee for a Responsible Federal Budget (CRFB) to discuss lowering health care costs and promote its Health Savers Initiative, Chairman Grassley said that he and Ranking Member Ron Wyden (D-OR) would release an amended version of the legislation in a bid to attract additional support for the bill. Chairman Grassley said that the new version of his and Ranking Member Wyden’s drug pricing legislation, the Prescription Drug Pricing Reduction Act, or PDPRA (S. 2543), would include new patient flexibility on paying for out-of-pocket costs in Part D. This proposal, often referred to as “patient smoothing,” may allow individuals who hit the proposed out-of-pocket cap on one prescription fill to spread out the cost across payments throughout the year.

He acknowledged that there are likely not 60 votes for the bill’s Senate passage right now but expressed hope that the changes would get the bill across the finish line. Chairman Grassley emphasized his view that his bill is popular with voters, saying that “when Republicans wake up to the fact that 22 of them are up for reelection” they will support the bill. Ranking Member Wyden added that the Committee is looking at measures to increase transparency of pharmacy benefit manager negotiations, but it was unclear what exactly those provisions would entail. After asserting that insulin prices had increased dramatically while the product changed little, Ranking Member Wyden also indicated that he is looking at ways to lower insulin prices beyond the proposed inflation rebates, perhaps including backward-looking policies to bring prices down.

FDA Nominee Appears Before HELP Committee

Last Wednesday, the Senate Committee on Health, Education, Labor, and Pensions (HELP) held a confirmation hearing for nominee Stephen Hahn, MD, to be Commissioner of the Food and Drug Administration (FDA). Senators on the committee probed Dr. Hahn for his views on various topics including: (1) e-cigarette regulation; (2) the opioid crisis; (3) drug importation; (4) issues pertaining to biosimilars and generic drugs. The FDA nominee described his extensive work as a physician, oncologist, and a medical executive in assuring Senators of his qualification for the position.

While Republicans were vocal in their support of President Donald Trump’s nominee, Democrats voiced their concern that Dr. Hahn could allow politics to influence his decision-making as FDA Commissioner. Democrats on the Committee stated that the FDA is responsible for ensuring public safety, a matter that should not be influenced by politics or special interest groups. Dr. Hahn emphasized to the Committee that he will make decisions based on data, science, and the law rather than political motivations. Additionally, Dr. Hahn did not go into great detail answering how he might tackle high drug prices and promised both Republican and Democratic lawmakers he would follow up on their concern on the issue. He added that there were some things the FDA could do to indirectly “stimulate innovation and competition.”

House Judiciary Panel Passes Drug Patent Bills

Last Wednesday evening, the House Judiciary Committee passed two pieces of legislation addressing pharmaceutical intellectual property. The two bills, which address “patent thicketing” and “product hopping” practices, were both reported to the full House by voice vote. The Affordable Prescriptions for Patients Through Improvements to Patent Litigation Act of 2019 (H.R. 3991) would limit the number and age of patents that may be asserted in an infringement claim and focuses on biologics. The Affordable Prescriptions for Patients Through Promoting Competition Act of 2019 (H.R. 5133) would define product hopping in the Federal Trade Commission Act and prohibit two forms of product hopping — hard and soft switches.

Neither bill was substantively amended prior to passage, and the Committee cleared them with little fanfare or discussion. The two bills are cleared for House consideration, but it is unclear if and when they will be taken up. Separately, the Congressional Budget Office found that the Affordable Prescriptions for Patients Act (S. 1416), a Senate bill sponsored by Sen John Cornyn (R-TX) that combines the policies found in the two House bills, would save $507 million over 10 years. These savings could make the policies an attractive option as a pay-for in an end-of-year health care package.

Chairman Jerrold Nadler (D-NY) noted that even though Federal Trade Commission (FTC) Chairman Joseph Simons told the Committee that “product hopping” creates unfair competition, courts have struggled to apply antitrust law to the practice. He said that when drugs have a single competitor, the originator drug’s price can be lowered by 20 to 30 percent, and when a drug has two or more competitors, prices can go down 85 percent or more. Rep. Hank Johnson (D-GA) said that there is a tangible benefit to having more biosimilar products available, as he claimed the bill tackling “patent thicketing” would encourage. He said that over the next five years, global pharmaceutical spending will be $160 billion less than if biosimilars had not entered the market.