Health Policy Report (9/19)

September 19, 2022

House and Senate lawmakers will resume legislative business today as negotiations on a continuing resolution (CR) continue. In particular, discussions at the leadership level are likely to focus on reaching agreements on items that could potentially be added onto the stopgap, including energy permitting reforms and reauthorization of several user fee agreements at the Food and Drug Administration (FDA). Both of these proposals will require bipartisan cooperation to ensure that the CR can pass the Senate with a filibuster-proof majority — a factor that could prolong the talks into the final days leading up to the September 30 deadline. Meanwhile, members of the House Freedom Caucus have coalesced behind a strategy spearheaded by three GOP senators — including Sens. Mike Lee (R-UT), Rick Scott (R-FL), and Ted Cruz (R-TX) — in opposing a CR through mid-December. Instead, the Republican lawmakers have been pushing for a “clean” funding bill that maintains current federal spending levels until the new Congress begins in 2023

Congress Continues Negotiations on User Fees, Sets New Target for Deal 
Senators are continuing their discussions on a reauthorization package for several user fee agreements at the FDA as leaders hope to tack on a final deal to the forthcoming CR. According to the latest intel, lawmakers are still haggling over a series of policy riders that could potentially be included with the final user fee language. Earlier this year, the House (TRP analysis) and the Senate (TRP analysis) unveiled their respective pieces of legislation to reauthorize the Prescription Drug User Fee Act, Generic Drug User Fee Amendments, Biosimilar User Fee Act, and the Medical Device User Fee Amendments programs. 

The UFAs are reauthorized in five-year increments and represent an agreement between lawmakers, manufacturers, patients, and industry stakeholders to strike a balance between efficient product approval processes and garnering fees to operationalize these goals. The FDA relies on user fees to supplement their appropriated funds, and the looming September 30th expiration of the most current five-year authorization poses operational challenges for the agency. While the House and Senate were expected to work to reconcile differences as committee hearings took place in the early summer months, negotiations were paused as both chambers turned their attention toward the now-passed Inflation Reduction Act. Congress is now down to the wire on UFA reauthorization with just days left before the programs expire. 

White House Issues EO, Outlines Spending For New Biotech, Biomanufacturing Initiative

On Monday, the Biden administration issued an executive order (EO 14081) to establish a new biotechnology and biomanufacturing initiative across multiple sectors of the economy, including within the health care realm. A key policy goal set forth by the White House seeks to harness biotechnology and biomanufacturing research and development (R&D), particularly through applied biosafety and biosecurity innovation. Additionally, the new initiative places emphasis on: (1) growing domestic biomanufacturing capacity; (2) expanding market opportunities for bio-based products; (3) improving access to federal data; (4) streamlining regulations for biotechnology products; and (5) supporting a diverse biotechnology and biomanufacturing workforce, among other items. 
In conjunction with the new initiative, the White House held a Summit on Wednesday where various agencies announced details for investments and resources to implement the EO. Notably, the $2 billion funding tranche includes $40 million for the Department of Health and Human Services (HHS) to expand the role of biomanufacturing for active pharmaceutical ingredients, antibiotics, and more.  

House E&C Advances Bills on Prior Authorization, Vaccine Injury Compensation Program

The House Energy and Commerce Subcommittee on Health held a markup (TRP summary) to consider five bills that were ultimately amended and passed through the Subcommittee. Bills pertaining to prior authorization (PA) in Medicare Advantage (MA) plans, providing mobile health care funding, and reauthorizing grants to address trauma care services were all approved on a bipartisan basis. Notably, the Subcommittee’s passage of the MA bill occurred just before the bill’s unanimous passage by the full House. However, disagreements arose regarding a bill that would reauthorize the Flint, Michigan Lead Exposure Registry. Republicans offered a series of amendments that would expand funding for the registry to other communities experiencing similar water resource issues, as well as provisions that would require state and local funding to supplement federal funding. Despite these conflicts, the Republican amendments failed, and the underlying bill was passed — as amended — due to the Democrats’ majority. 

Senate Judiciary Looks Towards Immigration to Combat the Health Care Workforce Shortage

The Senate Judiciary Subcommittee on Immigration, Citizenship, and Border Safety held a hearing (TRP summary) on Wednesday to discuss the role of immigrants in the health care workforce. While current law allows health care professionals to migrate to the U.S. in order to provide medical services, growing health care workforce challenges have called attention to the limitations that currently exist within the parameters of these policies.
Throughout the hearing, Republicans and Democrats agreed that the health care workforce shortage has placed a burden on the U.S. health care system, resulting in additional barriers compounded by the COVID-19 pandemic. Democrats called for passage of the HealthCare Workforce Resilience Act (S. 1024) and the Conrad State 30 and Physician Access Reauthorization Act (S. 1810) in order to address the intricacies of current immigration law that further contribute to these shortages. While there was general agreement among Members that increasing the numbers of immigrant health care professionals could lessen this burden, Republicans on the Subcommittee demanded that broader immigration challenges be addressed prior to the passage of legislation specific to the health care workforce. 

Reps. Bera, Bucshon Introduce Bill to Increase Reimbursement Under the Medicare Physician Fee Schedule

Last week, Reps. Ami Bera (D-CA) and Larry Bucshon (R-IN) introduced a bipartisan bill that would provide a 4.42 percent physician fee schedule (PFS) adjustment from January 1, 2023, through January 1, 2024. The legislation comes on the heels of the Centers for Medicare and Medicaid Services’ (CMS) proposed calendar year (CY) 2023 PFS rule (TRP analysis), which included a decrease to the conversion factor that would reduce physician payments from Medicare by roughly 4.5 percent in 2023. The agency’s proposal drew the ire of provider groups and other stakeholders, who immediately called for CMS to request that Congress intervene and implement a positive adjustment. In addition to the payment adjustment, the legislation also expresses a sense that HHS should, in conjunction with Congress, execute administrative and legislative actions to: (1) promote Medicare physician payment system financial stability and predictability; (2) encourage and reward innovation in value-based care; and (3) advance health equity by ensuring timely access to quality care. 

Biden Announces Intent to Appoint Dr. Renee Wegrzyn as ARPA-H Inaugural Director
In the midst of an intra-state battle to secure the rights to house the Advanced Research Project Agency for Health (ARPA-H) headquarters, the Biden administration announced its intent to appoint Dr. Renee Wegrzyn as Inaugural Director of the new agency. In late June, the House passed legislation to shepherd biomedical breakthroughs through the new agency, marking a critical step in shaping how the government entity will direct billions in new health spending. ARPA-H — modeled after a Pentagon entity tasked with developing national security technologies — would fund applied research with short-term teams to solve major challenges, such as a vaccine to prevent most cancers. Dr. Wegrzyn, a biologist in the private sector, possesses former experience as a scientist in two government agencies, including the Pentagon’s Defense Advanced Research Projects Agency (DARPA) and the Intelligence Advanced Research Projects Activity, which the administration intends to emulate with ARPA-H.