Health Policy Report (2/7)

February 7, 2022

Capitol Hill Update

Late last week, House lawmakers passed [222-210] the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (America COMPETES) Act (textfact sheetsection-by-section). The roughly $350 billion technology research and innovation package would provide $52 billion toward domestic semiconductor production, as well as $45 billion to bolster domestic supply chains and manufacturing efforts. Looking ahead to next steps, leadership in both chambers could offer a motion to go to conference and produce a final compromise version that blends the America COMPETES legislation and United States Innovation and Competition Act (USICA) as soon as this week. While leaders are hopeful to reach a deal within 30 days, House and Senate conferees will need to navigate a series of policy differences between the chambers’ respective bills before a firm path forward emerges.

When Congress returns this week, House lawmakers will look to consider legislation that would keep the government funded beyond the February 18 deadline. The “four corners” leaders of the Appropriations Committees remain engaged in negotiations on an omnibus spending deal for fiscal year (FY) 2022, but a series of disagreements over policy riders has stalled progress on a topline funding agreement. If House and Senate appropriators are unable to reach a deal, it is likely that leadership will introduce a continuing resolution (CR) at some point prior to the end of the week that would fund the government into early March or April.

Also on the floor this week, the House is scheduled to consider: (1) legislation that seeks to end mandatory, pre-dispute arbitration for sexual assault and harassment disputes (H.R. 4445); (2) a bill that would impose sanctions on foreign individuals found to be complicit in violating LGBTQ rights (H.R. 3485); and (3) a measure that seeks to implement a series of reforms to the U.S. Postal Service (USPS) (H.R. 3076). Meanwhile, Senators will resume consideration of pending presidential nominations, starting with the nominations of Ebony Scott and Donald Tunnage to be Associate Judges for the Superior Court of the District of Columbia.

House Committee Holds Hearing On User Fee Amendments

On Thursday, the House Energy and Commerce Subcommittee on Health held a hearing (TRP summary) to discuss the reauthorization of the Prescription Drug User Fee Act (PDUFA), the Generic Drug User Fee Amendments (GDUFA), and the Biosimilar User Fee Act (BsUFA). These programs authorize the Food and Drug Administration (FDA) to collect user fees from manufacturers, supplementing funds appropriated to the agency to ensure that new drug, biologics license, generic drugs, and biosimilar product applications receive timely reviews. Notably, Medical Device User Fee Amendments (MDUFA) were not discussed in yesterday’s hearing as the FDA failed to meet the January 15 deadline to transmit the commitment letter for the next MDUFA iteration.

Included in this robust discussion were comments surrounding: (1) vaccine efficacy and safety; (2) biosimilar interchangeability; (3) research and development; (4) antimicrobial resistance; and (5) cell and gene therapies. Members unanimously agreed that the COVID-19 public health emergency (PHE) has disproportionally impacted inspection and review timelines for biosimilars in comparison to the other user fee programs, prompting policy recommendations from witnesses to remedy this issue. Both Republicans and Democrats on the subcommittee expressed strong support for the reauthorizations of these programs, noting that each of the three proposals contains incremental resources to aid in robust drug development and evaluation.

Stakeholders Clash Over Drug Cost Reporting

Large companies that provide health insurance are fueling demand for drug price information, but pharmacy benefit managers (PBM) and manufacturers assert that legal roadblocks prohibit them from publicizing that information. In November, the Biden administration delayed surprise billing rules promulgated in the No Surprises Act (NSA) that would require health plans to report prescription drug spending. Agencies presiding over the impending regulations requested public comment regarding the implementation of the rule’s billing and transparency regulations, catalyzing disagreement within the industry.

The ERISA (Employee Retirement Income Security Act of 1974) Industry Committee (ERIC) asserts that the administration should further delay enforcement of the “surprise billing” rule, which is set to take effect this December, as well as put the onus on PBMs to comply with transparency requirements. PBMs have access to the information required in the NSA, while large, self-insured employers do not have access to this formulary and prescription drug cost data. However, PBMs and drug manufacturers argue that the NSA only applies to rebates provided by plans.

Drug manufacturers agreed with ERIC that the Centers for Medicare and Medicaid Services (CMS) should delay enforcement of the surprise billing regulations, and they have encouraged CMS to report on direct and indirect remuneration (DIR), including amounts paid to PBMs. On the other hand, PBMs assert that plans and issuers are responsible for data reporting requirements, adding that their service fees are outside of the NSA’s scope and do not need to be reported.

Biden Looks to Revitalize Cancer Moonshot Program

President Biden announced on Wednesday that he will revamp the Cancer Moonshot program that he launched as Vice President in 2016. The program aims to reduce cancer deaths by 50 percent over 25 years, and the adminstration hopes to leverage lessons learned during the COVID-19 pandemic to reach that goal. As part of this initiative, the Biden administration will stand up a “Cancer Cabinet” with members of several health agency officials, including the Department of Health and Human Services (HHS), the Food and Drug Administration (FDA), the Centers for Disease Control (CDC), and the National Institutes of Health (NIH). Danielle Carnival, a senior advisor to the director of the White House Office of Science and Technology Policy, has been tapped to coordinate Moonshot.

The program includes seven areas of focus: (1) diagnose cancer sooner; (2) prevent cancer via technology and environmental initiatives; (3) address inequities; (4) target treatments to patient needs; (5) speed access to treatments for deadly and rare cancers; (6) learn from share patient data; and (7) support patients, caregivers, and survivors. Despite grand plans for Cancer Moonshot, the administration recognizes that funding for the revamped project has yet to be secured, as the project’s initial funding in 2016 was only authorized for seven years in the 21st Century Cures Act.

To Democrats’ Chagrin, CMS Predicts Pay Bump for MA Plans

On February 2, 2022, the Centers for Medicare and Medicaid Services (CMS)released the Calendar Year (CY) 2023 Advance Notice (fact sheet; press release) of Methodological Changes for Medicare Advantage (MA) Capitation Rates and Part C and Part D Payment Policies. The document lays out specific and technical changes to MA and Part D payment policies, though some notable inclusions caught the eye of lawmakers. Specifically, CMS predicts that MA plans will see an eight percent pay increase in 2023, due in part to a 3.5 percent revenue increase from the MA risk score calculation. Regulators and lawmakers have been keeping a close eye on MA risk adjustment scores, as some argue that these scores enable plan administrators to get more money out of the Medicare program.

The same day that CMS released its 2023 MA projections, the Senate Finance Committee held a hearing (TRP summary) on Medicare’s financial troubles. Subcommittee Chair Elizabeth Warren (D-MA) framed MA plans as the “privatization” of Medicare arguing that MA plans add a heavy cost burden on the Trust Fund. Her discussion of MA plans led to criticism of the Direct Contracting Model (DCM) through the CMS Center for Medicare and Medicaid Innovation (CMMI). Meanwhile, Republicans drew a different conclusion and focused on mechanisms to improve MA’s cost burden while maintaining the program’s accessibility. They engaged in conversations about consumer transparency as a mechanism to align incentives in Medicare, as well as balancing trade-offs between cost and quality of care.