Health Policy Report

March 5, 2018

The Week in Review

As high-level negotiations on an omnibus spending bill continue off the floor, both the House and Senate met last week and advanced financial services bills and judicial nominations, respectively. Specifically, House lawmakers passed a measure (H.R. 4296) that would place restrictions on federal regulators seeking to impose operational risk capital requirements for banks on a 245-169 vote, as well as a measure (H.R. 4607) that would increase the periods of regulatory review under the Economic Growth and Regulatory Paperwork Reduction Act (EGRPRA) by a 230-177 margin. The House held their last votes on Tuesday in order to provide for evangelical preacher and presidential adviser Billy Graham to lie in honor in the Capitol Rotunda on Wednesday and Thursday.

The Senate cleared some of its nominations queue ahead of consideration of a banking regulatory relief bill this week. Vice-President Mike Pence broke a tie to confirm Russell Voight as Deputy Director of the Office of Management and Budget, while a handful of district-level judicial nominees were confirmed on more comfortable margins.

Discussion of potential gun control legislation continued last week, including at a bipartisan White House meeting hosted by President Trump. Like with immigration, the President expressed openness to the Democratic position on the issue, saying that he preferred a “comprehensive” measure and even suggested that the government should be able to confiscate guns prior to individuals receiving their due process rights. However, those policies are likely to be opposed by many rank-and-file Republicans and lawmakers appear little closer to an agreement on a comprehensive bill to address gun violence.

Finally, the White House made waves and roiled markets late in the week by announcing that the U.S. will implement tariffs on imported steel and aluminum. The tariffs are designed to protect American materials manufacturers from foreign competition, although the move could hurt other sectors of American manufacturing.

The Week Ahead

A banking regulatory relief bill (S. 2155) will face its test on the chamber floor this week after Senate Majority Leader Mitch McConnell (R-KY) moved to proceed to the bill last Thursday. As constructed, the bill is likely to get 60 votes on the strength of the Republican majority and a handful of moderate Democrats. However, it remains to be seen what provisions — if any — will be submitted to make the package more palatable to House Republicans, who want a more thorough breakdown of the Dodd-Frank regulatory regime. Watch for the bill’s proponents to walk a delicate balance between trying to bring the House on board and making sure not to lose any wary Senate Democrats before a final vote.

The House has only a pair of energy measures on their docket to be considered pursuant to rules this week. The first (H.R. 1917) — which was also passed by the House in the last Congress, but ignored in the Senate — would exempt kilns and other brick structures from regulatory rules regarding emissions. The other bill (H.R. 1119) would reauthorize a waiver program for coal refuse energy plants to be exempted from the Environmental Protection Agency’s (EPA) Mercury and Air Toxics Standards. Both measures are expected to pass on party-line votes.

Also look for continued fallout from the Administration’s decision to place tariffs on imported steel and aluminum, which will reportedly be finalized this week. Economists fear the beginning of a trade war as Canada, the European Union and China have already said they will consider retaliatory actions,.

Bipartisan Senators Introduce CARA 2.0 as FDA Calls for National Prescribing System

A bipartisan group of senators has introduced legislation framed as a follow-up to the Comprehensive Addiction and Recovery Act (CARA) of 2016. Dubbed CARA 2.0, the bill includes a combination of policy changes and increased funding authorizations that seek to restrict access to opioid-based painkillers and boost access to addiction treatment. The legislation was introduced by Sens. Rob Portman (R-OH), Sheldon Whitehouse (D-RI), Shelley Moore Capito (R-WV), Amy Klobuchar (D-MN), Dan Sullivan (R-AK), Maggie Hassan (D-NH), Bill Cassidy (R-LA) and Maria Cantwell (D-WA).

In addition to allocating $1 billion toward various efforts aimed at combating the opioid epidemic, the measure includes key policy changes, such as: (1) establishing a three-day initial prescribing limit on opioids for acute pain; (2) permanently allowing physician assistants and nurse practitioners to prescribe buprenorphine with guidance from a qualified physician; (3) requiring doctors and pharmacists to use prescription drug monitoring programs (PDMPs) before prescribing or dispensing opioids; and (4) increasing civil and criminal penalties for opioid manufacturers if they fail to report suspicious orders or prevent diversion.

The announcement of CARA 2.0 comes as Food and Drug Administration (FDA) Commissioner Scott Gottlieb is calling for a national electronic prescribing platform to help combat the opioid crisis. While Commissioner Gottlieb acknowledged the “upfront costs” to implementing such a system, he touted it as a move that would help educate doctors, ensure appropriate prescribing, and allow for health officials to collect data on opioid and controlled substance use.

The FDA has been considering utilizing drug safety programs — such as Risk Evaluation and Mitigation Strategy (REMS) — to educate physicians on opioid prescribing, but does not have the authority to mandate physician education. Commissioner Gottlieb said that a national prescribing system would address this gap, ensuring that doctors receive prompts when they are writing prescriptions. These prompts would include warnings to prevent the co-prescribing of dangerous combinations of medicines.

CREATES Act, Part D Changes Eyed as Omnibus Riders

Sponsors of the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act are pushing for the bill to be included in the omnibus spending legislation, which must pass by March 23 to avoid a government shutdown. House sponsor Rep. Tom Marino (R-PA) said that he will meet with leadership next week to discuss including the bill in the omnibus. However, support of House leadership may not be mandatory for the bill to get in the omnibus, given the fact that CREATES Senate sponsor Sen. Patrick Leahy (D-VT) — Ranking Member of the Senate Appropriations Committee — is helping to write the omnibus.

The bill seeks to enhance competition by allowing generic drug manufacturers to sue brand companies when they claim FDA-mandated safety programs as an excuse to block access to samples needed for FDA approval. An estimate from the Congressional Budget Office (CBO) on a previous iteration of the bill found it would save the federal government $3.8 billion over 10 years due to lower prescription drug spending in Medicare and Medicaid.  

Meanwhile, as generic drug makers push to include the CREATES Act in the omnibus, the branded pharmaceutical industry is hoping to roll back changes in the recent bipartisan budget agreement that would require them to pay larger rebates on drugs when Medicare beneficiaries are in the Part D “donut hole.” The Bipartisan Budget Act, passed last month, effectively increased drug makers' share of coverage-gap costs from 50 percent to 70 percent — leaving Part D plans to cover just 5 percent. While the CREATES Act and “donut hole” provisions are ostensibly being considered separately, some discussion has emerged in Congress over using the savings generated by the CREATES Act as an offset for the cost of the reversing the Part D coverage gap policy. Other drug industry pay-fors have also been floated as alternatives to the “donut hole” policy, including deferring a reduction in the Affordable Care Act’s pharmaceutical excise tax, which is slated to be cut from $4.1 billion in 2018 to $2.8 billion in 2019 and thereafter.

Senators Launch Healthcare Price Transparency Working Group

A bipartisan group of Senators announced last Thursday that they are seeking feedback from industry stakeholders to help them craft legislation to make healthcare pricing more transparent. Led by Sen. Bill Cassidy (R-LA), the working group will first collect feedback from patients, providers, and insurers about ways to lower healthcare costs. Other Senators involved with the initiative include Sens. Chuck Grassley (R-IA), Todd Young (R-IN), Michael Bennet (D-CO), Tom Carper (D-DE), and Claire McCaskill (D-MO).

Cassidy said that the group wants to know the information consumers currently have about: (1) prices and out-of-pocket costs; (2) who should be responsible for providing information to consumers; and (3) how to ensure that transparency requirements don’t “place unnecessary or additional burdens on healthcare stakeholders. Responses to questions posed by the workgroup are due Friday, March 23.

DOJ to Target Opioid Drug Makers, Distributors

The Department of Justice (DOJ) has launched a task force aimed increasing accountability for opioid manufacturers.  The new Prescription Interdiction and Litigation Task Force will crack down on unlawful marketing practices and ensure that pharmacies and physicians obey rules designed to prevent diversion and improper prescribing. Attorney General Jeff Sessions said that DOJ will file a statement of interest in states’ pending lawsuits against opioid manufacturers, arguing the government and taxpayers should be reimbursed for illegal activity by drug companies.

The new task force will work with the Department of Health and Human Services (HHS) to investigate illegal activity around prescription opioids. Sessions said that DOJ will use criminal and civil penalties if it uncovers illicit activity by opioid-based drug manufacturers. The task force also establishes a working group to: (1) improve coordination and data sharing across the federal government to identify patterns of fraud; (2) evaluate potential changes to regulations affecting opioid distribution; and (3) recommend changes in laws.

Mental Health Advocates Push for Reform as Congress Debates Gun Control

In the wake of the mass shooting at the Marjory Stoneman Douglas High School in Parkland, Florida, President Donald Trump and Congressional Republicans have invited a renewed focus on the role of mental health in gun violence. At the same time, advocates for mental health have use the renewed attention on mental illness to push for more resources to address gaps in the nation’s mental health system.

Speaker Paul Ryan (R-WI) highlighted a mental health measure passed in 2016 as one way that Republicans have responded to mass shootings, while President Trump has amplified calls to work with state and local leaders to tackle the issue of mental health. However, Congressional Republicans have shown little appetite for additional spending on mental health policy — putting them at odds with the core arguments from advocates that more resources are needed.