Health Policy Report: (12/20)

December 20, 2021

Capitol Hill Update

Sen. Joe Manchin (D-WV) delivered a serious setback to President Joe Biden’s legislative agenda over the weekend after he announced that he will not support the Build Back Better Act (BBBA). The centrist West Virginia Senator — who was heavily engaged in negotiations with leadership on the overall size and scope of the $1.7 trillion social spending package — cited the national debt, ongoing COVID-19 pandemic, and inflation metrics as key reasons why he came out against the legislation. The surprise announcement drew the ire from both moderate and progressive Democrats, as well as the White House, which issued a statement criticizing Sen. Manchin for walking back previous commitments to find common ground. Press Secretary Jen Psaki noted that the administration plans to “find a way to move forward” in 2022, according to the remarks.

Meanwhile, both chambers of Congress stand adjourned for the holiday break after the Senate cleared a slate of pending presidential nominations early Saturday morning. Looking ahead to 2022, Senators will return first for votes on Monday, January 3, followed by the House a week later on Monday, January 10.

Senate HELP Considers Califf to Head FDA

On Tuesday, the Senate Health, Education, Labor, and Pensions (HELP) Committee held a hearing (TRP analysis) to question Dr. Robert Califf on his nomination to be Commissioner of the Food and Drug Administration (FDA). Senators on both sides of the aisle focused heavily on the FDA approval process with a particular focus on expedited drug development. Democrats also raised questions about ways in which the FDA can leverage its authority to lower drug prices, to which Dr. Califf was clear that the FDA would likely ask Congress for more authority to tie up anti-competitive loopholes.

On the topic of pandemic response, Dr. Califf fielded questions about COVID-19 testing and the looming concern regarding antimicrobial resistance. He strongly agreed with sentiments that tests should be more readily available and suggested that public health efforts continue to work on antimicrobial resistance. This discussion also tied into pharmaceutical supply chain concerns, to which Dr. Califf alluded to a forthcoming paper that the supply chain board at the National Academy of Medicine (NAM) will publish soon. A few Democratic Senators focused their questions on the opioid crisis in the U.S., urging Dr. Califf to review opioid labeling. He committed to reviewing opioid procedures within the next few months.

Throughout the hearing, Dr. Califf brought up the common thread of data collection and electronic health records (EHRs), which he often described as the integral tool that the FDA uses to make all of its decisions. This discussion included Dr. Califf’s call for a strong workforce to help beneficiaries use digital tools, as well as train and hire staff to implement modernized FDA systems. Overall, members of the Committee conducted a relatively bipartisan debate on the fractioned issues, though few touched on hot button topics. Sen. Bernie Sanders (I-VT) — who has vocally opposed Dr. Califf’s nomination — questioned the nominee on his corporate ties, hinting at possible conflicts of interest should Califf’s nomination be approved. Califf is expected to be confirmed in early- to mid-January 2022.

Providers Call for Continuous Drug Manufacturing

A group of provider coalitions — including American Medical Association (AMA), American Society of Anesthesiologists (ASA), American Society of Health-System Pharmacists (ASHP), Association for Clinical Oncology (ASCO), and United States Pharmacopeia (USP) — penned a letter last week urging the federal government to incentivize domestic, continuous manufacturing for pharmaceutical manufacturers. Domestic manufacturing for critical medicines and active pharmaceutical ingredients (API) through continuous manufacturing would produce smaller quantities but allow for the flexibility to shift to producing different medications.

The stakeholders suggest that the federal government leverage tax incentives to encourage continuous manufacturing and boost medicine supplies. They explain that COVID-19 has exacerbated vulnerabilities in the health care supply chain, pointing to overseas production of vital equipment and therapies as a weak link in the chain. The letter notes that the Strategic National Stockpile (SNS) was insufficient as a failsafe mechanism, leading the signatories to urge Congress to pass legislation to bolster the SNS, improve foreign manufacturer collaboration, and reward high-quality manufacturing operations. Among other requests, the letter touches on SNS reporting requirements, U.S.-based personal protective equipment (PPE) manufacturing, and greater U.S. Food and Drug Administration (FDA) transparency.

CMS Vaccine Mandate Set to Resume in Most States

In early November, the Centers for Medicare and Medicaid Services (CMS) issued testing and vaccine requirements for health care workers at Medicare and Medicaid certified facilities (TRP analysis; rule; press release; FAQ). A slew of lawsuits objecting to the rule ensued. Later that month, the judge presiding over the Louisiana, et al. v. Xavier Becerra, et al. case granted a preliminary injunction in favor of the plaintiffs, effectively blocking enforcement of the CMS vaccine mandate in all states.

On December 15, the U.S. Court of Appeals for the 5th Circuit determined that application of the injunction for the entire country is beyond the court’s jurisdiction, and therefore removed the nationwide injunction for the states not involved in this case. Notably, however, because the lower court’s decision excluded the ten states party to the Missouri case, the prohibition on CMS implementing the vaccine in those ten states still applies. As a result, while CMS is prohibited from enforcing the vaccine mandate in 24 states, the agency can enforce the rule in 26 states. For more information, Thorn Run has reviewed and analyzed the current status of COVID-19 mandates.

Wyden Scrutinizes PBMs, Leading to Possible CMS Rule Change

Last week, Senate Finance Committee Chair Ron Wyden (D-OR) requested that the Federal Trade Commission (FTC) investigate causation between pharmacy benefit manager (PBM) practices and pharmacy closures and consolidation. The high-ranking Oregon Democrat also voiced concerns that PBMs are driving up drug costs. The National Community Pharmacists Association (NCPA) is hopeful that the probe will lead to a reduction in PBM fees, though PBMs remained relatively unscathed in the Democrats’ reconciliation bill, according to drug manufacturers.

Centers for Medicare and Medicaid Services (CMS) Administrator Chiquita Brooks-LaSure responded to Chair Wyden’s concerns. She assured him that CMS intends to tweak its price concessions rule that currently allows PBMs to charge pharmacies retroactively, though she neglected to provide insight into CMS’s timeline on proposing a rule change. The Administrator noted that CMS has been conducting its own investigation into the impact of PBM fees on the drug pricing landscape, and she labeled direct and indirect remuneration (DIR) fee increase as “troubling,” alluding to the Chair’s October letter to CMS.

Biden Administration Releases Fall 2021 Unified Agenda

The Office of Management and Budget (OMB) published the Fall 2021 Unified Agenda (TRP analysis) outlining the forthcoming regulatory priorities of the Biden administration. OMB generally releases the Unified Agenda in the Spring and Fall, and the timelines included in the Unified Agenda tend to be aspirational but demonstrate the administration’s regulatory priorities. Through this process, administrations seek to solidify their regulatory actions earlier in election cycles to ensure these actions are more difficult to overturn should control of Congress and/or the White House shift. Of note in the regulatory agenda are changes to the 340B Drug Pricing Program, which would replace the Administration Dispute Resolution (ADR) final rule currently in effect. Additionally, OMB outlined a forthcoming rollback to a Trump-era regulation which would have created procedures for the periodic review and sunset of Department of Health and Human Services’ (HHS) regulations.

The Unified Agenda contains several proposals aimed at creating new, or modifying existing, regulations around prescription drugs. Specifically, the Post Approval Changes to Approved Applications proposed rule would make changes to approved new drug applications, abbreviated new drug applications, and biologics license applications, as well as regulations regarding certain post-approval reports. Additionally, the Prescription Drug and Health Care Spending interim final rule (IFR) would implement the prescription drug reporting requirements. The administration’s regulatory agenda also proposes a new, mandatory Medicare Alternative Payment Model (APM), as well as plans to permanently extend the buprenorphine telehealth flexibility among opioid treatment programs (OTPs) after the conclusion of the COVID-19 public health emergency (PHE).