Health Policy Report (7/12)

July 12, 2021

Capitol Hill Update

Congress will return to Washington this week to kick off a jam-packed July legislative session. The Senate will resume voting on Monday, while the House meets for Committee Work Days prior to resuming floor activities during the week of July 19. At the centerpiece of this month’s agenda is the Biden-endorsed bipartisan infrastructure deal (fact sheet), as lawmakers are hoping to push this agreement across the finish line before the August Recess. At the same time, Democratic leadership will be working to clinch a budget resolution that contains some key provisions from the President’s American Jobs Plan and American Families Plan.

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. Given the breadth of the July schedule, Senate Majority Leader Chuck Schumer noted in a “Dear Colleague” letter that it is possible that this month’s schedule could bleed into part of the traditional August break to provide lawmakers with additional floor time on these legislative priorities.

Biden Signs Competition Executive Order

On Friday, President Biden dropped an Executive Order (EO) (text; fact sheet) to curb anti-competitive practices for a multitude of industries, including health care. The EO targets hospital and health insurance consolidation, high drug prices, and hearing aids where the administration determines that a “lack of competition … increases prices and reduces access to quality care.” Key health provisions include:

  • Drug Importation. The order directs the Food and Drug Administration (FDA) to work with states and Tribes on a plan to import prescription drugs from Canada, pursuant to the Medicare Modernization Act of 2003 and seemingly bolstering a Trump-era policy.
  • Biosimilars. The order directs the Department of Health and Human Services (HHS) to increase support for generic and biosimilar drugs.
  • Drug Pricing. HHS is directed to issue a comprehensive plan within 45 days to combat high prescription drug prices and price gouging. 
  • Pay for Delay.’ The order encourages the Federal Trade Commission (FTC) to ban “pay for delay” and similar agreements by way of federal rulemaking.
  • Hearing Aids. The order directs HHS to consider issuing proposed rules within 120 days regarding the sale of over-the-counter (OTC) hearing aids.
  • Hospital Mergers. The order emphasizes that hospital mergers can be harmful to patients, encouraging the Department of Justice (DOJ) and FTC to review and revise hospital merger guidelines.
  • Price Transparency & Surprise Billing. The order directs HHS to support existing hospital price transparency rules and to finish implementing federal legislation that addresses surprise hospital billing.
  • Health Plans. The order directs HHS to standardize plan options in the National Health Insurance Marketplace to facilitate more comparison shopping.

The administration expressed its concern that hospital consolidation puts rural areas at risk, and the FTC announced last week it would prioritize hospital mergers in its enforcement activity. Modern Healthcare reports that President Biden is maintaining existing regulations, put forth by the Trump Administration, that require cash price and rate disclosures. Back in May, CMS warned hospitals that they could be fined if they do not comply with new rules within 90 days.

The EO also encouraged the FTC to ban or limit physician non-compete clauses, despite the American Medical Association’s (AMA) 2020 letter to the FTC asking not to limit non-compete agreements. AMA CEO Dr. James Madara wrote that “Physician employment arrangements frequently include non-compete agreements, and the application of non-competes to physicians can raise issues regarding physician ownership, the patient-physician relationship, and patient access to care.”

Democrats Continue to Deliberate Drug Pricing Policy Options

Democrats continue to push for a reconciliation package to include drug pricing policies, which could pass the Senate with a simple majority. Senate Budget Committee Chairman Bernie Sanders (I-VT) hopes to include drug price negotiation provisions and use the savings as pay-fors for including vision, dental, and hearing in traditional Medicare and lowering the eligibility to age 60.

However, divisions within the Democratic party persist. Centrists, like Rep. Kurt Schrader (D-OR), “want something that passes with bipartisan support and the country needs a win here.” Others, like Rep. Peter Welch (D-VT) highlighted the advantages of voting on drug pricing as a standalone bill to pressure the Senate, according to the Wall Street Journal.

With regard to the difficult topic of foreign reference pricing, Inside Health Policy reports that Senate Finance Chairman Ron Wyden (D-OR) may be changing his tune. The Chairman is considering scrapping his international reference pricing plan for domestic reference pricing. Pivoting towards domestic reference pricing would avoid criticism that Wyden’s international reference pricing scheme inherently “devalues patients with disabilities and chronic diseases” due to the quality-adjusted life years (QALYs) pricing mechanism utilized by many foreign governments. In fact, QALYs have become so unpopular among patient groups that the Institute for Clinical and Economic Review (ICER) announced it “is willing to stop using quality-adjusted life years and rely on the other metrics it already uses to judge drug value if Democrats decide that QALYs are too politically toxic,” according to another Inside Health Policy report

Telehealth At A Crossroads as Lawmakers Push for Expansion, Request More Data

Reacting to the telehealth boom during the pandemic, telehealth startups are on the rise. Modern Healthcare reports that “employers, insurers and even government agencies are now partnering with these services to provide members access at scale.” As these mental health startups gain traction, they face the challenge of proving their utility and efficacy. Payers are relying on digital startups’ marketing and cost to make coverage determinations, but Congressional policy decisions will have to rely on data. These supply- and demand-based coverage decisions are met with calls for concrete data.

Influential lawmakers including Senate Finance Chair Ron Wyden (D-OR) and House Ways and Means health subcommittee Chair Lloyd Doggett (D-TX) did not sign onto the CONNECT for Health Act (H.R. 4932; S. 2741) last Congress, which would permanently enshrine many pandemic-era flexibilities, due to a lack of data supporting the legislation. Instead, Politico reports that many lawmakers are looking towards a temporary expansion of telehealth flexibilities that allow for more time for data collection. But this strikes some as indicative of legislative paralysis. “Congress will always ask for more data,” said Sarah-Lloyd Stevenson of Faegre Drinker. “My fear is even if we do a two-year extension, they’re going to keep asking for more data.”

While data adequacy is likely to drive the new debate surrounding telehealth spending and efficacy, utilization data has been plentiful. A McKinsey & Company analysis found that “After the initial spike in April 2020, everyone was wondering whether it would plateau or drop, and by how much,” said Oleg Bestsennyy, expert associate partner at McKinsey and report author, in an email to Med City News. “What’s interesting is that overall rates remained 30-40 times higher [than] pre-pandemic levels, even with some mild fluctuations.” Still, reimbursement remains a hurdle, with 54 percent of physicians saying they would not offer virtual care at a 15 percent discount compared to in-person care.

Cancer Rates are Down while Obesity Looms

The American Cancer Society’s annual report “found that from 2015 to 2018, overall cancer fatality rates for men dropped 2.3 percent per year, faster than the 1.8 percent decline recorded each year from 2001 to 2015.” The bulk of this success comes for rapidly decreasing rates of lung cancer as smoking rates decline and for non-small cell lung cancer treatments are approved. Decreased death rates from melanoma can also be attributed to novel treatments.

Unfortunately, racial and ethnic disparities in health care are causing the decline of breast cancer rates to slow. While breast cancer is more common among white women, Black women die from breast cancer at higher rates. Farhad Islami, the lead author of the report and a scientific director at the American Cancer Society, explained that while cancers relates to smoking have decreased, those related to higher body weight are on the rise. “We hope that policymakers read the paper,” Islami said. “Many of these things need community-level policies to be implemented.”

Additionally, The Hill pointed out that death rates increased for a small group of cancers, including pancreatic, brain and other nervous system cancers, oral cavity and pharynx, and uterine cancer. These increased rates are strongly tied to obesity as a comorbidity. Two new studies also indicate a link between colorectal cancer and type-2 diabetes. NCI Director Norman Sharpless said in a statement, “I believe we could achieve even further improvements if we address obesity, which has the potential to overtake tobacco use to become the leading modifiable factor associated with cancer.”