Health Policy Report (6/28)

June 28, 2021

House lawmakers will reconvene today to wrap up the June legislative session ahead of what is shaping up to be a hectic month of July. President Joe Biden endorsed a bipartisan Senate infrastructure deal (fact sheet) last week, and leadership in both chambers indicated that they will try and push this across the finish line prior to the August district work period. Democrats will also be kicking off the budget resolution process next month to craft legislation on the President’s American Jobs Plan and American Families Plan, including policies on home and community-based services, child care, education, paid leave, climate change, and health care, among others. In addition to the Biden administration’s agenda, Congress must also resume its work on fiscal year (FY) 2022 appropriations, the National Defense Authorization Act (NDAA), as well as budgetary issues stemming from the American Rescue Plan and the expiring debt ceiling suspension.

On the floor this week, House lawmakers will take up the Transportation & Infrastructure Committee’s surface transportation reauthorization measure. The INVEST In America Act would authorize spending of $547 billion for the Department of Transportation’s (DOT) investments over the next five years, including $343 billion for roads and bridges, $109 billion for transit, $95 billion for freight rail, and roughly $14.7 billion for Member Designated Projects. The bill also includes $51.25 billion toward wastewater infrastructure, as well as $117 billion for drinking water and assistance programs. Congress has until September 30, 2021 to pass a reauthorization before funding expires. Meanwhile, Senators have adjourned for the Independence Day state work period, and will resume legislative business on Monday, July 12.

Senate Finance Releases Drug Pricing Principles

Last Tuesday, Senate Finance Committee Chairman Ron Wyden (D-OR) released a document outlining principles for future legislation aimed at lowering prescription drug prices. His goals address the Department of Health and Human Services (HHS) drug pricing negotiation authority, Medicare Part D rebates and restructuring, drug price increases, private insurance, and funding for drug research and development (R&D).

“Congress has critical work in the weeks ahead to craft legislation that will finally deliver relief to Americans who are paying too much for their prescription drugs,” Wyden said in a press release. “Today’s release reflects the core principles that will guide my work this summer: let Medicare negotiate, limit price gouging, provide relief to consumers at the pharmacy counter, ensure those with individual and employer insurance also benefit, and reward scientific research for those who are truly innovating. I look forward to working with members of the Senate and the House to deliver true drug pricing reform to President Biden’s desk this year, as he called for in his joint address to Congress.”

Specifically, Wyden’s principles call for establishing clear criteria for what constitutes a “market failure” with regard to drug pricing that would trigger price negotiations and defining what a “fair price” would be. It also calls for the creation of “incentives” for pharmaceutical manufacturers to participate in such negotiations. Chairman Wyden expressed discontent with the current structure of Part D plans and pharmacy benefit manager “middlemen” and said that formularies do not pass savings onto plan beneficiaries. He said that forthcoming legislation would outline patient savings for insulin and would discontinue rebate practices that “limit competition and patient access” as well as create greater supply chain transparency. Furthermore, Chairman Wyden called for requiring rebates on price increases that exceed inflation, similar to what was contained in legislation he introduced with former Finance Chairman Chuck Grassley (R-IA) in the last Congress. Chairman Wyden also said that drug pricing reform should benefit all Americans, and that drug pricing should reward innovation — not “gaming” of the patent system.

DeGette and Upton Release Cures 2.0 Discussion Draft

Last week, Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) released a discussion draft of their Cures 2.0 legislation, intended to follow up on 2016’s 21st Century Cures Act (discussion draft, section-by-section). The bill includes provisions related to clinical trials, further work on the pandemic, telehealth, treatment of new products, and more. It also includes legislation to authorize the creation of the Advanced Research Projects Agency for Health (ARPA-H), a Biden administration priority that was included in the White House’s FY 2022 budget proposal. Reps. DeGette and Upton have long discussed developing a Cures 2.0 bill, including releasing a request for input to stakeholders last Congress.

“The federal government has amazing resources at its disposal,” said DeGette and Upton in a press release. “Now is the time to put the full weight of those resources to use to cure some of the world’s most devastating diseases, such as cancer, diabetes, Alzheimer’s, and more. Developing and delivering new lifesaving cures is a mission that must unite all of us.”

This discussion draft, and any subsequent release of the legislation, may present stakeholders a platform for elevating important issues. As a draft, the legislation is ripe for changes and suggestions from stakeholders. However, the bill’s future in going through the markup process and ultimately receiving any vote is not certain. However, certain items from the bill may ultimately be packaged into other legislative vehicles based on committee and leadership interest, stakeholder input, and the needs of members.

HHS, Treasury, DoL Seek Feedback on New Prescription Drug Reporting Requirements

Last Monday, the Departments of Health and Human Services (HHS), Treasury, and Labor (DoL) issued a call for input on recent new reporting requirements related to prescription drugs with the highest associated spending. The request for information (RFI) concerns provisions passed as part of the Consolidated Appropriations Act of 2021 which mandated health plan reporting on the most frequently prescribed drugs and the most costly prescription drugs. It seeks input on the implementation of the new requirements, including the level of detail of information to require, the definitions of terms included in the new requirements, and general implementation concerns. 

In brief, the new law requires private health plans and insurers, including Exchange plans and employer plans, to report general information on the plan coverage, including the beginning and end dates of the plan year, the number of participants, beneficiaries, or enrollees (as applicable), and each state in which the plan or coverage is offered. Health plans and issuers must also report: (1) the 50 most frequently dispensed drugs under a plan; (2) the 50 most costly prescription drugs for the plan by annual spending; (3) the 50 prescription drugs with the greatest increase in expenditures over the past year; (4) total plan spending broken down by category; (5) the impact on premiums made by rebates, fees, and other remuneration from drug manufacturers to a plan; (6) average premiums; and (7) reductions in premiums and out-of-pocket costs associated with rebates and other remuneration.

The RFI will be open for 30 days, with comments tentatively scheduled to close on July 22, 2021. Following responses from stakeholders, the three Departments will need to issue guidance or rulemaking to implement the new reporting requirements in advance of the December 27, 2021 deadline for the first reporting period.

SCOTUS Rejects Review of Insurers’ CSR Case

The Supreme Court announced last Monday that it would not take up review of an appeals court decision finding the government can mitigate its obligation to reimburse insurers for Affordable Care Act (ACA) cost-sharing reduction (CSR). The denial will require that insurers prove whether 2018 premium increases and the related increase in ACA premium tax credits resulted from the government’s actions or other forces. Furthermore, the denial impacts several other cases that had been put on hold pending the Supreme Court’s decision to take up the appeal and will require plaintiffs in all cases confer with the Department of Justice (DOJ) on next steps.

At issues is an August 2020 decision by an appeals court panel that found the government must pay all CSRs owed insurers in the final Quarter before the Trump administration stopped the payments but stated the government could deduct additional tax credits insurers received when they increased premiums to help make up for the losses. In February, Maine Community Health Options and Community Health Choice from Texas asked SCOTUS to review the decision, noting that the circuit court ruling undermined the principles that the government should pay its obligations. The Biden administration weighed in via an April 9 brief, telling the Supreme Court that the appeals court had properly deferred to contract law in its decision. The case now moves to the federal court of claims to determine the amount of premium increases and resulting tax credits attributable to the government’s failure to pay out CSRs.