Health Policy Report

October 15, 2018

The Week in Review

Senators returned to Washington for what proved to be their last legislative work period before next month’s midterm elections. The Senate began their week by clearing the legislative vehicle (S. 3021) for reauthorization of the Water Resources Development Act (WRDA). Additionally, Senate leadership struck a deal late Thursday afternoon that allowed lawmakers to head home and campaign ahead of next month’s midterm elections. Under the deal, Senators voted to confirm a bloc of 15 judges nominated by President Trump prior to leaving Washington for the campaign trail. Senate Democrats also forced a vote on Resolution of Disapproval (S.J.Res.63) that would override the Trump administration’s rule expanding short-term health insurance plans. The resolution — which failed on an even 50-to-50 vote — was largely seen as a political messaging exercise for Democrats who are set on making health care a key messaging pillar for the 2018 election. 

The Week Ahead

House and Senate lawmakers have left Washington to hit the campaign trail. Both chambers are scheduled to resume legislative business one week after the midterms on Tuesday, November 13th.

Senate Votes Down Resolution on Short-Term Health Insurance

The Senate failed to advance a resolution that would block the Trump administration rule regarding short-term health plans. A motion to proceed to the resolution failed on an even 50-to-50 vote, just short of the majority necessary to advance for further consideration. Sen. Tammy Baldwin (D-WI) put forth a resolution of disapproval under the Congressional Review Act (CRA) that would have stopped the implementation of the rule. All 49 Democrats and Senator Susan Collins (R-ME) voted in favor of the resolution.

In 2016, the Obama Administration finalized a rule defining short-term, limited-duration health insurance plans as lasting less than three months and requiring them to carry a disclaimer that they did not meet the coverage requirements of the Affordable Care Act (ACA). After President Trump took office, the Department of Health and Human Services (HHS) issued a request for information (RFI) asking for input on how to lower regulatory barriers for healthcare. Following the RFI, HHS promulgated a rule that defines short-term, limited duration health insurance plans as lasting less than 12 months, and less than 36 months total when considering renewals and extensions. Such plans are not required to meet the standards set by the ACA for health insurance, including essential health benefits (EHBs) and coverage of pre-existing conditions.

According to a Kaiser Family Foundation poll released in September, 27 percent of voters say that healthcare is the most important issue in the 2018 elections and 75 percent say that it is “very important” to maintain the ACA’s pre-existing condition protections. In this environment, Democrats hope to use the vote to tout their support for the requirement that health insurance cover pre-existing conditions and highlight GOP eagerness to promote insurance without such protections. To that end, recent data demonstrates that almost half of the political ads run by Democrats this year have focused on health care.

HHS to Require Drug Price Transparency in Direct-to-Consumer Ads

The Department of Health and Human Services (HHS) is set to announce requirements that pharmaceutical manufacturers disclose list prices in direct-to-consumer advertising next week. The proposal has reportedly been under White House review since August, and is expected to be published in the Federal Register as early as today. Drug makers remain strongly opposed to the policy, and lobbied against its inclusion in the federal funding package last month. Pharmaceutical companies argue that advertising list prices will deter patients from seeking medical care, and policy experts have suggested the proposal will do little to rein in drug prices. The proposal will reportedly be issued under the Centers for Medicare & Medicaid Services’ regulatory authority.

FDA Announces New Guidance Documents to Spur Generic Drug Development

Food and Drug Administration Commissioner (FDA) Scott Gottlieb has released a pair of guidance documents intended to advance the development of generic drugs that are applied directly to a patient’s skin, known as transdermal and topical delivery systems (TDS). Commissioner Gottlieb noted that the nature of the formulation and delivery systems of TDS dugs make it difficult to genericize under traditional approaches, and many branded TDS products like drug patches have yet to face “timely” generic competition. The agency also released 25 product-specific guidance documents, including two new guidances and 23 revised documents.

In President Trump’s drug pricing blueprint, the administration emphasized their intent to prioritize the development of guidance to improve efficiencies in the development, review, and approval processes for generic drugs. The FDA has already released 54 new or revised product-specific guidance documents this year, and built upon that with over two-dozen new documents focused on TDS. As Commissioner Gottlieb explained, these guidance documents lay out how developers can create a generic copy of any currently marketed, branded complex medicine, and are intended to provide “as much scientific and regulatory clarity as possible with respect to complex generic drugs.”

FDA has indicated that it will advance other new policies to promote generic competition for complex drugs in the coming months, including the development of new analytical tools, more accurate and sensitive in vitro tests, and reproducible tools to demonstrate sameness between generic copies and a branded, complex drug. Commissioner Gottlieb also announced the FDA will soon issue an umbrella guidance to assist generic developers address the most challenging regulatory and scientific issues encountered during development, to be followed by a series of more targeted guidances addressing legal questions serving as barriers to generic competition. Additionally, he said FDA will clarify their process for evaluating potential differences in instructions for using complex drugs, for example, when there are directions for how to use a specific drug delivery device in an approved drug-device combination. 

Affordable Care Act Premiums to Fall Next Year

Premiums for Affordable Care Act Silver plans will drop by an average of 1.5 percent next year, for the first time since the health law was enacted. Previously, premiums for the same plans had risen by an average of 37 percent between 2017 and 2018. Centers for Medicare & Medicaid Services Administrator Seema Verma announced that the drop in premiums was evidence the Trump administration was not sabotaging the law, and declared that agency actions — such as repealing the individual mandate and expanding short-term insurance plans — have only helped the ACA markets. The administration noted that other plans sold on the Exchanges would only see slight increases, and stated that 23 additional insurers will offer coverage next year. Health experts have refuted the administration’s claims they are responsible for the drop, and cite studies that show premiums would have seen a greater decreases if not for President Trump’s actions.