Health Policy Report (6/1)

June 1, 2021

Both chambers of Congress have adjourned for the Memorial Day Recess. The Senate will resume voting on Monday, June 7, picking up consideration of the Endless Frontier Act after last-minute disagreements delayed final passage. Senators were unable to advance the $100 billion technology innovation package as previously planned last week after a group of GOP Senators — led by Sen. Ron Johnson (R-WI) — held up final votes over disagreements on the amendment process.

Meanwhile, Senate Majority Leader Chuck Schumer (D-NY) penned a “Dear Colleague” letter outlining the month ahead in the chamber prior to wrapping up the May legislation. Leader Schumer announced that Senators will take up legislation pertaining to paycheck equity, voting & election reform, gun safety, and LGBTQ equality. The Senate will also continue its push to confirm President Joe Biden’s pending judicial nominations.

In the House, lawmakers will meet for Committee Work Days next week, but will resume voting the week of June 14. Looking ahead to this summer, lawmakers will ramp up activity on key year-end priorities including fiscal year (FY) 2022 appropriations, surface transportation reauthorization, and the National Defense Authorization Act (NDAA), among others. Congress must also address the expiration of the debt ceiling suspension, as well as sequestration and “PAYGO” issues that were triggered by the American Rescue Plan at some point prior to the August Recess. Democrats are also expected to continue their work on crafting legislation that aligns with President Joe Biden’s American Jobs Plan and American Families Plan, likely utilizing budget reconciliation to circumvent GOP opposition in the 50-50 Senate.

Biden Releases FY 2022 Budget Request

Last Friday, the Biden administration unveiled its full fiscal year (FY) 2022 budget request (fact sheet; appendix) outlining $6 trillion worth of spending priorities for the year ahead. The President’s request includes $769 billion in spending for nondefense programs — a 16 percent increase from FY 2021, including a significant boosts for the Department of Health and Human Services (HHS) (23.5 percent). Lawmakers on the House Appropriations Committees will begin their work crafting FY 2022 spending bills next month, with the goal of having each of the 12 spending bills passed by the end of July. A schedule on the Senate side is unclear as of now, fueling speculation that a short-term continuing resolution (CR) may be needed to push the funding deadline beyond September 30, 2021.

A significant chunk of the policy proposals included in the President’s budget point to various provisions included in his American Jobs Plan and American Families Plan — namely on infrastructure, clean energy and climate change, health care, and tax reform, among others. This includes calls for investments in Home- and Community-Based Services, the establishment of ARPA-H, and a permanent expansion of the ACA subsidies included in the ARP Act.

The budget also states the President’s support for a public option and lowering the eligibility age of Medicare. President Biden calls for allowing individuals 60 and older the option to enroll in Medicare with the same premiums and benefits as current beneficiaries but with a different financing mechanism. He also calls for a public option available through the ACA exchanges. Beyond these topline proposals, the budget offers no specifics.

Additionally, President Biden’s budget calls for new investments in mental health and substance use disorder (SUD) services. In particular, it asks Congress for $1.6 billion for the Community Mental Health Services Block Grant, over twice as much as was provided in FY 2021. It also calls for $10.7 billion in discretionary funding for SUD services, $3.9 billion more than in FY 2021. Finally, the budget asks for a $125 million increase in Certified Community Behavioral Health Clinic (CCBHC) funding, for a total of $375 million. This would expand the CCBHC program to 180 grantees.

CMS Proposed Delay for “Multiple Best Price” Reporting in Medicaid Drug Rebate

Last Wednesday, the Centers for Medicare and Medicaid Services (CMS) proposed to delay its forthcoming “multiple best price” approach for Medicaid drug rebates by six months. This new approach was finalized in the December 31, 2020 final rule entitled, Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value-Based Purchasing (VBP) for Drugs Covered in Medicaid, Revising Medicaid Drug Rebate and Third Party Liability (TPL) Requirements. The new best price definition finalized in December 2020 creates a structure in which manufacturers may offer prescription drugs to states at prices that are tied to patient outcomes without affecting the overall best price framework in the Medicaid drug rebate program. Under this new approach, manufacturers that offer a value-based purchasing (VBP) arrangement to all states, may report a best price that includes varying best price points (“multiple best price”) under that VBP arrangement. The announcement by CMS last week proposed to delay the current effective date for these reporting requirements. CMS also proposed to delay the inclusion of U.S. territories in the MDRP, citing territories’ technical inability to comply with that inclusion. This would maintain the status quo with regard to territories in the MDRP through April 1, 2024. Commenters have 30 days to submit comments after the proposal is published in the Federal Register, setting a likely deadline of June 27, 2021.

Congressional Health Leaders to Design Public Option Legislation

The chairs of key Congressional health committees announced last week that they will develop legislation that would establish a public health insurance option, a key campaign promise from President Joe Biden. Senate HELP Committee Chair Patty Murray (D-WA) and House Energy and Commerce Chair Frank Pallone (D-NJ) penned a letter to “all interested parties” soliciting feedback on a design that prioritizes “quality, affordable” health coverage throughout the U.S. They note that “bold steps are necessary in order to achieve universal health coverage and lower health care costs.” The health care leaders are seeking input from stakeholders to inform their forthcoming legislation, and looking for feedback on eligibility, provider access, price determination, benefit package structure, federal assistance, and more. Responses to the House and Senate Committees are due by July 31, 2021.

FDA Reverses Trump Administration Termination of Unapproved Drugs Initiative

The Food and Drug Administration last Wednesday announced that they were reversing a Trump administration decision to terminate the Unapproved Drugs Initiative, stating that the regulatory notice was “legally and factually inaccurate.” The initiative started in 2006 to gather information on pharmaceuticals that had been available on the market for years because they predated stricter approval requirements and required manufacturers to remove those drugs until they were demonstrated as safe and effective under updated approval requirements. The program has been criticized for policies requiring all subsequent manufacturers of the same drug to leave the market once that drug had be re-approved under a different manufacturer.

The Trump administration terminated the program due to concerns over whether it was implemented legally, and former President Trump stated that the initiative was misguided and exploited by drug companies that obtained market exclusivity to raise prices. Department of Health and Human Services (HHS) Secretary Xavier Becerra and Acting FDA Commissioner Janet Woodcock reported they found no evidence that the former administration had “consulted with, otherwise involved, or even notified FDA” before issuing the notice to end the program and said that the Trump administration misinterpreted how the FDA defined a “new drug” under the program. Because the Trump administration removed all guidance documents when the program was terminated, the FDA will issue new guidance on the topic to provide updates on the FDA’s enforcement priorities for marketed unapproved new drugs. 

Biden Called on to Nominate ONDCP Head

A group of almost 40 substance abuse advocacy groups and four former “drug czars” wrote to President Biden last Wednesday urging him to nominate a permanent head of the White House’s Office of National Drug Control Policy (ONDCP). They stated that drug overdoses continue to be a national epidemic and have been exacerbated by the COVID-19 public health emergency due to treatment disruptions, social isolation, and other hardships. The group called for an “all-hands-on-deck” approach to battling substance abuse, noting that this requires a “fully functioning” ONDCP to carry out policies outlined in the administration’s Statement of Drug Policy Priorities for Year One. The letter is the first notable sign of stakeholder pressure on the Biden administration to name someone to the role and it is among the most prominent health positions the president has yet to fill. Experts expect the administration to pick either former West Virginia Public Health Commissioner Rahul Gupta or the current Acting Director of the ONDCP Regina LaBelle to serve as the permanent head of the ONDCP. Although Mr. Gupta was at one time seen as the lead contender for the position, he has faced criticism for not doing enough to halt the closing of a syringe exchange in his state when he was a state official.