Health Policy Report (6/21)

June 22, 2021

Both chambers of Congress will resume legislative business this week. The Senate will return first later this afternoon to take up a pair of President Biden’s nominees for the Office of the Director of National Intelligence (DNI) and Office of Personnel Management (OPM). Senators are also expected to take up a procedural vote to advance the Democrats’ sweeping voting and election reform bill, but it is not expected to break a filibuster in the 50-50 Senate.

When the House reconvenes on Tuesday, Members will consider three Congressional Review Act (CRA) resolutions that would rescind rules from the previous administration. Specifically, these Trump-era rulemakings pertain to: (1) the Equal Employment Opportunity Commission (EEOC)(S.J.Res.13); (2) a rollback of methane protections at the Environmental Protection Agency (EPA) (S.J.Res.14); and (3) the Office of the Comptroller of Currency’s so-called “True Lender Rule”(S.J.Res.15). Lawmakers will also take up bills under suspension of the rules out of the Energy and Commerce Committee, including a measure that seeks to improve the collection and availability of health data with respect to Tribal communities.

Supreme Court Rejects ACA Challenge

The U.S. Supreme Court last Friday delivered an opinion effectively maintaining the Affordable Care Act (ACA), finding that the states that had sued to overturn the law lacked standing. The decision was 7-2, with Justices Alito and Gorsuch dissenting from the majority. Last Friday’s ruling brings to an end a lawsuit brought by several GOP State Attorneys General that argued that after Congress reduced the individual mandate penalty to $0, the mandate became unconstitutional. The case will not be remanded to the lower courts.

The Court held that the states lacked standing as they could not trace an injury to the penalty-free individual mandate. In the dissenting opinion, Justices Alito and Gorsuch suggest that the decision does not rule out future litigation as the case was dismissed for lack of jurisdiction. They note that the states can file a new action, or “many other parties will have standing to bring such a claim based on a variety of the ACA’s substantive provisions that are arguably inseverable from the mandate.”

Congressional Democrats immediately lauded the decision, with Senate Majority Leader Chuck Schumer saying that “the ACA is here to stay, and now we’re going to try to make it bigger and better.” Senate Health, Education, Labor, and Pensions Committee Chair Patty Murray stated the decision was a “call to further action, not an excuse for complacence,” and urged Congress to pass “bold solutions” to build on the law. The Chairwoman reported she will work with President Biden on “bold steps” such as Medicare drug price negotiation, expanded Medicare eligibility, making the premium tax credit increases in the American Rescue Plan permanent, and establishing a public option. House Energy & Commerce Chair Frank Pallone and Senate Finance Chair Ron Wyden echoed calls for action to build on the health law. 

Biden Administration Releases Spring 2021 Unified Agenda

On June 11, the Office of Management and Budget (OMB) published the Spring 2021 Unified Agenda outlining the regulatory priorities of the Biden administration. Sharon Block, the Acting Administrator of the Office of Information and Regulatory Affairs at OMB, wrote that the new Unified Agenda “includes regulatory protections to help build an economy that makes it easier for families to break into the middle class and stay in the middle class [and] to dismantle persistent and systemic inequities…. At the same time, the Unified Regulatory Agenda continues rolling back the obstacles to recovery, equity, and sustainability that the prior Administration put in place.”

Some of the most notable items in the regulatory agenda include forthcoming rollbacks to Trump-era regulations. In particular, one rule would rescind Trump administration policies regarding Section 1332 State Innovation Waivers and separate billing for abortion coverage in Marketplace plans. In addition, the Biden administration is planning to further delay two Trump administration rules, the Securing Updated and Necessary Statutory Evaluations Timely rule and the Medicare Coverage of Innovative Technologies rule, with the issuance of a second notice of proposed rulemaking (NPRM) for each. Issuing second NPRMs for these two rules indicates that the Biden administration may be planning significant changes to the policies contained in those two rules.

The agenda also includes a proposed rule on an unspecified alternative payment model (APM) that would be executed under the Center for Medicare and Medicaid Innovation (CMMI). Per the abstract of the rule published as part of the Unified Agenda, participation in the demonstration APM would be mandatory. CMMI head Elizabeth Fowler recently said that the innovation center would turn to more mandatory models as well as make more conscious choices about where it should act. “Going forward as a general principle I think we want to focus on our strategies aligned with the overall goal of health system transformation,” she said.

HHS Proposes to Rescind Trump-Era Insulin, Epinephrine Pricing Rule

Last Wednesday, the Department of Health and Human Services (HHS) proposed to rescind a Trump-era rule capping prices paid by patients for certain drugs provided by federally qualified health centers (FQHC). The Trump administration rule, which was proposed in response to an executive order on drug pricing, prevented FQHCs, which purchase drugs through the 340B drug discount program, from charging low-income patients more than the actual acquisition cost for insulin and injectable epinephrine products, plus a small administrative fee. The proposal would rescind the Trump administration’s rule — which has not yet been implemented — in its entirety.

HHS outlined multiple reasons for aiming to rescind the rule in last Wednesday’s proposal. Namely, it found that the rule and its implementation would impose significant administrative burdens on covered health centers and would result in a loss of revenue for FQHCs. Such a revenue loss would result in a lessened ability of FQHCs to support its target populations. In addition, the proposal notes that FQHCs currently provide drugs to low-income individuals at greatly reduced prices, and generally on a sliding scale. Notably, Executive Order 13937, which directed HHS to issue the rulemaking in the first place, has not been rescinded. Last Wednesday’s proposal notes that HHS will consider other implementation approaches for the Executive Order.

The proposed rescission is currently open for comment for 30 days, and the comment period will close on July 16, 2021. With the Trump administration’s rule is set to go into effect on July 20, HHS would need to move quickly to finalize its rescission after the close of the comment period, or further delay the Trump-era rule to allow for additional consideration of comments. In addition, HHS may pursue other avenues for implementing Executive Order 13937. 

Administration to Invest $3 Billion in COVID-19 Antiviral Development

The Department of Health and Human Services (HHS) announced on Friday that $3 billion from the American Rescue Plan would be invested in accelerating the discovery, development, and manufacturing of antiviral medicines as part of the Biden Administration’s strategy to develop the next generation of COVID-19 treatments. The funding will go towards a collaboration between HHS, the National Institutes of Health (NIH), the Biomedical Advanced Research and Development Authority (BARDA), and HHS Office of the Assistant Secretary for Preparedness and Response (ASPR) to implement the Antiviral Program for Pandemics. The administration noted that the new program will respond to the urgent need for antivirals to treat COVID-19 and will build sustainable platforms for discovery and development of antivirals to address future pandemics. NIAID Director Dr. Anthony Fauci stressed that oral drugs that could be taken at home early in the course of the disease would be powerful tools for battling the pandemic and saving lives.

Under the new program, the NIH will evaluate, prioritize, and advance antiviral candidates to Phase Two clinical trials, as well as de-risk early-stage development through sponsors and guide candidates along development paths. The plan also provides more than $300 million for research and lab support, nearly $1 billion for preclinical and clinical evaluation, and nearly $700 million for development and manufacturing through NIAID and BARDA. Additionally, $1.2 billion will be allocated to support the creation of collaborative drug discovery groups called Antiviral Drug Discovery (AViDD) Centers for Pathogens of Pandemic Concern that aim to harness the creativity of the biomedical research community and drive innovative antiviral drug discovery and development.

Friday’s announcement follows a congressional letter sent to HHS Secretary Xavier Becerra last Tuesday, urging the administration to invest in and pursue new research and development of COVID-19 treatments. The letter, signed by 23 House Republicans and members of the GOP Doctors Caucus, stressed the critical need for therapies to treat emerging variants and suggested the administration use some of the $6 billion in appropriated funds from the American Rescue Plan. The letter, led by Rep. Neal Dunn (R-FL) called for a $5.2 billion investment in new treatments, and asked the HHS Secretary for an update on how the administration plans to support COVID-19 therapeutic products moving forward.