Health Policy Report (2/21)

February 21, 2023

Both chambers of Congress are out this week for the Presidents’ Day state work period. House and Senate lawmakers will resume legislative business on Monday, February 27.

HHS Announces Three CMMI Drug Pricing Models

Last week, the Department of Health and Human Services (HHS) announced (press release; FAQs) three new Centers for Medicare and Medicaid Services (CMS) Innovation Center (CMMI) models aimed at lowering drug prices. Specifically, these models would address generic drugs for Medicare Part D beneficiaries, Medicaid agency agreements regarding cell and gene therapy (CGT) drugs, and Part B drugs approved under the Food and Drug Administration’s (FDA) accelerated pathway. Additionally, HHS’s announcement directs CMMI to consider additional areas of research for future models. These directives surround accelerating the adoption of biosimilars, bolstering data access and transparency, and improving CGT access in Medicare fee-for-service (FFS). 

Senate Commerce Committee Examines PBMs

On February 16, the Senate Committee on Commerce, Science, and Transportation held a hearing to consider the need to increase transparency and accountability amongst pharmacy benefit managers (PBM). Republicans and Democrats largely agreed that PBM reform is necessary, though disagreements emerged over whether the PBM Transparency Act (S.127) proposed by Chair Maria Cantwell (D-WA) and Sen. Chuck Grassley (R-IA) would be the most effective mechanism for such change. Conversation also surrounded the recent trend toward consolidation and the vertical integration of PBMs, as well as the beneficiaries of PBM rebates, where both members and witnesses expressed concern over the implications of such practices.

Senate HELP Panel Discusses Health Care Workforce Shortages

On February 16, the Senate Committee on Health, Education, Labor and Pensions (HELP) held a hearing to examine the shortages in the health care workforce and discuss possible solutions. The hearing identified a variety of potential contributing factors, including a lack of academic resources and increasingly hazardous work environments due to the COVID-19 pandemic. The witnesses advised the committee to allocate additional resources to medical training programs. Additionally, they recommended that steps be taken to support members of the current workforce in seeking higher education. The majority of the solutions presented appeared to have bipartisan support. 

HHS Secretary Becerra Encourages Medicaid Waivers for Social Determinants of Health

Department of Health and Human Services (HHS) Secretary Xavier Becerra noted during the recent National Association of Counties conference that counties across the U.S. can receive health-related funding though state Medicaid waivers. He said that states considering a waiver application must consider ways in which the proposed program will expand care, noting a recent expansion of Certified Community Behavioral Health Clinics (CCBHC) that expands upon best practices for reaching patients and bringing them into the health care system. Becerra explained that social programs implemented via Medicaid waivers could have a chance at broader application, if counties can track and provide data on their programs. 

Califf Balances Competition with Drug Shortages in FDA, USPTO Meeting

The Food and Drug Administration (FDA) and the U.S. Patent and Trademark Office (USPTO) have been engaging in discussions related to drug patent policies. During a recent January workshop between the two agencies, FDA Commissioner Robert Califf drew attention to concerns that lowering the cost of generics can cause drug shortages. He explained that if prices are driven too low, manufacturers may not have a financial incentive to produce the medications for certain markets. With about 95 percent of the market being comprised of generic drugs, saturation could lead manufacturers to halt production, he said. These concerns have been echoed by stakeholders for years, as former FDA Commissioner Janet Woodcock and the president of the Association for Accessible Medicines raised the issue back in 2019.

While this generic drug issue is not directly related to patent concerns, Califf noted that it indicates the limitations of competition as a mechanism to improve access to medications. The FDA does not determine drug pricing under its jurisdiction, though the agency makes decisions to approve and encourage development of biosimilar and generic products that galvanize competition with branded products. Califf’s concerns surrounding cheap generics, however, did not deter him from emphasizing the importance of developing new generics and biosimilars.