Health Policy Report (5/24)

May 24, 2021

Capitol Hill Update

The Senate will reconvene again this week, closing out the May legislative session with a pair of notable votes. When the chamber meets later this afternoon, Senators will take up a procedural motion on Chiquita Brooks-LaSure’s nomination to be Administrator of the Centers for Medicare and Medicaid Services (CMS), with final confirmation likely to occur in the middle of the week. Additionally, the Senate will resume consideration of Endless Frontier Act amendments, beginning with Senate Commerce Committee Chair Maria Cantwell’s (D-WA) proposal for a supply chain resiliency program. Final passage of the bipartisan $100 billion technology innovation package is expected to take place at the end of the week.

Meanwhile, House lawmakers have wrapped up votes for this month, but will meet for Committee Work Days prior to the Memorial Day district work period. The chamber will resume voting next month on Monday, June 14.

Biden Budget to Leave Out Key Health Platform Promises

White House officials confirmed last week that President Biden’s upcoming budget proposal will abandon key campaign health platform promises, such as the creation of a public health insurance option and drug pricing reform. The officials noted that the decision to leave these key health policies out was based on the potential for backlash in pushing new spending programs too aggressively, and instead the administration will focus on passing what they have already introduced. The president’s budget proposal is anticipated to instead reiterate his call on Congress to pass legislation strengthening the Affordable Care Act, Medicare, and Medicaid, as well as to allow Medicare to negotiate lower drug prices. The president has proposed more than $4 trillion in new government spending — paid for by trillions in tax hikes — but Democrats are divided over how to change the corporate tax code to pay for some of President Biden’s proposals. Leaving out his key health platform policies is sure to frustrate some Democrats, as election polling shows health care is a top priority for much of the party’s base.

HHS Announces Behavioral Health Grant Funding, New Coordinating Council

Last Tuesday, the Substance Abuse and Mental Health Services Administration (SAMHSA) announced that it will be awarding a total of $3 billion provided by the American Rescue Plan Act of 2021 (H.R. 1319) for mental health and substance use block grants. $1.5 billion with be disbursed each by the Community Mental Health Services Block Grant (MHBG) Program and Substance Abuse Prevention and Treatment Block Grant Program (SABG) to states and territories to support communities grappling with mental health and substance use needs during the COVID-19 pandemic. In addition, Health and Human Services (HHS) Secretary Xavier Becerra announced the formation of a new Behavioral Health Coordinating Council (BHCC) to oversee behavioral health throughout HHS.

HHS Secretary Xavier Becerra concurrently announced the establishment of a new BHCC as “a critical tool” in addressing mental health and substance use disorders. “This national problem calls for Department-wide coordination to address the issue,” he said, referring to mental health and SUD. “That’s why I am convening the Behavioral Health Coordinating Council to work across HHS to facilitate collaboration and strategic planning as we implement our behavioral health agenda.” The BHCC will be co-chaired by the Assistant Secretary for Mental Health and Substance Use and the Assistant Secretary for Health. Other members will include senior leadership across HHS, and the Department says that it will “facilitate collaborative, innovative, transparent, equitable, and action-oriented approaches to addressing the HHS’ behavioral health agenda.”

The issuing of these additional funds comes two months after SAMHSA announced supplemental funding of nearly $2.5 billion for these programs and is the largest amount of funding for the block grant programs to date. While the Centers for Disease Control and Prevention indicate that more American adults have reported an increase in adverse mental health conditions during the public health emergency, a recent report from the Centers for Medicare & Medicaid Services indicates that, while primary, preventative, and mental health care utilization dropped during the COVID-19 public health emergency among Medicaid and CHIP beneficiaries, mental health care utilization remains below pre-pandemic levels. 

G20 Leaders Commit to Voluntary Licensing for COVID-19 Vaccines

Leaders of the Group of Twenty (G20), including the United States, last Friday adopted a declaration recommending voluntary licensing for COVID-19 vaccines to boost production, departing from South Africa and India’s push for patent waivers. The European Union (EU) also announced plans to set up three manufacturing hubs in Africa through $1 billion in funding later this year to increase long-term production of vaccines, and Pfizer, Moderna, and Johnson & Johnson committed to provide COVID-19 vaccines at cost to poorer nations to try to redress the global imbalance of access. The declaration recommends short-term options to boost vaccine production, including voluntary licensing agreements on intellectual property, voluntary technology and know-how transfers, and patent pooling on mutually agreed terms. Additionally, it calls for solutions to be found within existing global agreements that do not include patent waivers. Despite earlier drafts of the declaration including a $19 billion pledge to the ACT-Accelerator — a World Health Organization (WHO) program to distribute COVID-19 vaccines, treatments, and tests — the final declaration did not include a clear commitment to fully fund the program. Several leaders seemingly took aim at the U.S. in statements emphasizing the need to ensure the free flow of vaccine materials across borders, and Italian Prime Minister Mario Draghi stated it should be easier for the U.S. to remove export hurdles now that “it has such a wide availability of doses and a large percentage of its population has been inoculated.” Vice President Kamala Harris attended the meeting on President Biden’s behalf.

House COVID-19 Subcommittee Releases Report on Emergent BioSolutions

Last Wednesday, the House Select Subcommittee on the Coronavirus Crisis released the initial findings from an investigation on the contamination of millions of Johnson & Johnson vaccines at a Emergent BioSolutions manufacturing facility. The investigation, headed by Subcommittee Chairman James Clyburn (D-SC) and Full Oversight Committee Chairwoman Carolyn Maloney (D-NY), considered Emergent BioSolutions’ award of $650 million in federal funding to manufacturer COVID-19 vaccines. Chairman Clyburn noted that Emergent had received several warnings last year regarding manufacturing problems at its plant — including an inadequate contamination control strategy — and distributed millions of dollars to executives despite the contamination situation. The May 2020 contract issued by the Trump administration agreed to pay the company $27 million per month in reservation fees to maintain “readiness” to manufacture vaccines pursuant to “current good manufacturing practices” whether or not the company was producing vaccines — although the Biden administration significantly reduced these fees after contamination was found.

The report found the lead manufacturing advisor to Operation Warp Speed issued a private report identifying multiple risks at the facility, and that Emergent BioSolutions had not tried to rectify their issues after being notified. Additionally, Chairman Clyburn noted that the Food and Drug Administration (FDA) found that the company failed to undertake a thorough investigation of how contamination occurred between AstraZeneca and Johnson & Johnson vaccine ingredients. The report also questions the company’s relationship with former HHS Assistant Secretary for Preparedness and Response Robert Kadlec, asking whether the relationship could have influenced Emergent being awarded the federal contract as Mr. Kadlec previously served as a consultant for Emergent.

House Oversight Panel Probes AbbVie’s Price Hikes

A new report from the House Oversight and Government Reform Committee detailed AbbVie’s price hikes and patent activity that allowed it drive up sales of the world’s top-selling drug — the rheumatoid arthritis medication Humira — and the company’s CEO Richard Gonzalez testified at a hearing last week as part of Democrats’ effort to curb prescription drug costs. While the report focused on the company’s use of market power and the patent system to drive up sales, the last week’s hearing took a broad focus and highlighted partisan fault lines over prescription drug pricing reform. Mr. Gonzalez and Professor Craig Garthwaite of Northwestern University argued that progressive priorities such as government price negotiation and weakening intellectual property rights would harm innovation, while a pair of Democratic witnesses, Dr. Aaron Kesselheim and Mr. Tahir Amin, called for reform to the U.S. patent system to “raise the bar” on patent application approval and tackle patent thickets limiting generic and biosimilar competition.

While Democrats called on Congress to pass drug pricing reform through H.R. 3, Republicans criticized the legislation for implementing government price setting and allowing federal overreach into the industry. Republicans contended that patients would lose access to critical therapies under government price negotiation and highlighted how innovation in the U.S. had led to the quick development of COVID-19 therapies and vaccines. Members from both parties argued against the use of “frivolous” patents used by brand pharmaceutical companies to extended exclusivity and criticized the industry for what they characterized as using the American market to subsidize research and development costs for the rest of the world.