Health Policy Report (6/7)

June 7, 2021

Both chambers of Congress will return from the Memorial Day Recess this week to begin the June legislative session. The Senate will resume voting later this afternoon, 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 last month after a group of Republicans — led by Sen. Ron Johnson (R-WI) — held up final votes over disagreements on the amendment process. The Senate will pick up amendment debate with consideration of a provision that would strike the Davis-Bacon wage provisions from the underlying bill, as well as Senate Majority Leader Chuck Schumer’s (D-NY) substitute amendment. Meanwhile, House lawmakers will convene for Committee Work Days this week, but will not resume voting until Monday, June 14.

Federal Trade Commission Issues Report on ‘Rebate Walls’

The Federal Trade Commission (FTC) recently issued its “Report on Rebate Walls” to Congress, providing an antitrust analysis of pharmaceutical manufacturer contracting practices, including rebate strategies. The report expressed concern that “some rebates can operate to increase overall drug spending,” noting that the cost implications are predominantly significant for biologics. The FTC concluded that it would “continue to use its panoply of powers to promote competition in pharmaceutical markets.” It also vowed to investigate and “challenge exclusionary conduct by pharmaceutical firms and third-parties that threaten to delay new entry, keep prices artificially high or deter innovation, and deny patients access to competing treatments.” The FTC has previously demonstrated interest in the topic, filing lawsuits alleging “other unlawful exclusionary conduct” against drug manufacturers and creating a “rulemaking group” that will consider competition rules for unspecified pharmaceutical industry practices. FTC Acting Chairwoman Rebecca Slaughter issued a statement criticizing “secretive rebates,” calling on the FTC to “prevent anticompetitive concentration of the pharmaceutical supply chain.” In addition, Commissioner Rohit Chopra criticized the PBM industry, noting that “PBMs may actually be causing drug prices to increase, rather than decrease.”

Expanding Insurance Coverage Top Priority for New CMS Head

In her first interview since being confirmed as CMS Administrator, Chiquita Brooks-LaSure noted that her top priorities in office will be broadening insurance coverage and ensuring health equity. She cited disparities and issues due to lack of insurance highlighted by the pandemic as part of the driving force behind her decision, and said she was not surprised by the increased signups for Affordable Care Act (ACA) health coverage under the public health emergency enrollment period. The new CMS Administrator said expanding health coverage will depend on individuals’ knowledge of plans and their affordability, citing differences in enrollment in states that “actively pushed coverage.” She also noted the administration would support congressional efforts to ensure coverage for Americans in the “Medicaid gap,” and said she would prefer states use the additional incentive funding provided in the American Rescue Plan toward expanding Medicaid programs. She explained that states have the insider knowledge to craft policies reflecting their needs, although some Senators are calling for an entirely new federal program to cover those who fall into the gap. Additionally, Administrator Brooks-LaSure pointed to Medicare trust fund insolvency as a priority and stated that upcoming discussions with Congress on the issue could be an opportunity to redesign the Medicare program.

U.S. to Redistribute 25 Million COVID-19 Vaccine Doses Internationally

President Biden announced last Thursday that the administration will send 25 million COVID-19 vaccine doses through the World Health Organization’s COVAX initiative. The majority of the initial shipment of the 80 million the administration has promised to share internationally by the end of June will be distributed by WHO to countries in South and Central America, South and Southeast Asia, and Africa. The remaining six million vaccines in the initial shipment will be targeted toward “regional priorities and partner recipients,” including Mexico, Canada, Korea, West Bank and Gaza, and more. Additionally, the president laid out the framework for how the U.S. will share the 80 million doses committed to international recipients. He explained that 75 percent of these vaccines will be distributed by COVAX, and 25 percent will be doled out for immediate needs and to assist with surges around the world.

President Biden noted that the administration will pursue additional measures beyond COVAX funding and vaccine sharing, including encouraging other countries to redistribute excess doses, working with U.S. manufacturers to increase vaccine production for the rest of the world, and helping more countries expand their own capacity to produce vaccines including through support for global supply chains. The president reiterated that the administration has been directed to use “all the levers” of government to protect individuals from COVID-19 and said they will work as “expeditiously as possible” while abiding by legal requirements to share vaccines internationally. Administration officials have made clear that the U.S. is not asking anything in return from countries receiving vaccine doses “the way other countries who are providing doses are doing,” and that the effort is with the sole purpose of improving public health.

House Lawmakers Introduce Drug Stockpile Legislation

Representatives Buddy Carter (R-GA) and Lisa Blunt Rochester (D-DE) recently reintroduced legislation to create an essential medicines strategic stockpile. Originally introduced in October 2020, the Essential Medicines Strategic Stockpile Act would require the Department of Health and Human Services (HHS) to develop a pilot program with private entities to test the effectiveness of acquiring, maintain, managing, and distributing a state-based stockpile of generic drugs at risk of shortage to back up the existing federal stockpile. The program would require contracts of up to three years for entities to create a six-month stockpile of up to 50 generic drugs and would be annually evaluated by the Government Accountability Office (GAO). Although the Food and Drug Administration already maintains a list of drugs in short supply, HHS would be tasked with creating a separate list of at least 50 essential medicines in collaboration with health care stakeholders and other government agencies. The sponsors noted that the pandemic highlighted the need to “have a redundancy in our stockpiles,” and said the HHS Assistant Secretary for Preparedness and Response is currently reviewing the bill.