Health Policy Report (2/13)

The Senate will be in session this week to close out the February work period. On the floor, senators will resume consideration of pending presidential nominations, beginning with Cindy Chung’s nomination to be a U.S. Circuit Judge for the Third Circuit Court. Meanwhile, House lawmakers have wrapped up legislative business for the month and will return after President’s Day district work period on Monday, February 27.

CMS Releases Initial Program Guidance for IRA Inflationary Rebates

Last week, the Centers for Medicare and Medicaid Services (CMS) announced the release of guidance documents pertaining to the Medicare Part B and Part D Prescription Drug Inflation Rebate Programs, which were created as part of the 117^th Congress’ Inflation Reduction Act (IRA). Unlike most regulatory guidance documents issued by the agency, CMS is soliciting comments on several aspects of its new guidance. The guidance documents provide specific formulas for calculations related to what manufacturers would owe should they raise prices faster than inflation. The agency is also soliciting feedback on how to delineate supply chain interruptions that would waive rebate requirements and oversight, among other aspects of the guidance.

CMS is accepting comments on most aspects of its guidance documents. Through March 11, 2023, comments can be sent to IRARebateandNegotiation@cms.hhs.gov with “Medicare Part B Inflation Rebate Comments” or “Medicare Part D Inflation Rebate Comments” in the subject line.

Senate HELP Lays Out Agenda

Last week, the Senate Health, Education, Labor and Pensions (HELP) Committee adopted committee rules, with Sen. Bernie Sanders (I-VT) as Chair and Sen. Bill Cassidy (R-LA) as Ranking Member. The two committee leaders agreed that lowering drug prices, tackling mental health concerns, and addressing pandemic preparedness will be bipartisan areas of interest. Senators Cassidy and Sanders will differ in their approaches to reducing drug prices, however. Sanders generally characterizes the health care system as broken and in need of drastic regulatory changes, whereas Cassidy emphasizes policy changes that strike a balance between affordability and innovation. “Down Dais” Senator Bob Casey (D-PA) stated that he will focus on areas with more consensus, highlighting Pandemic All-Hazards Preparedness Act programs which will need to be reauthorized by September 30, 2023. He also called on program reauthorizations related to the Higher Education Act and the Workforce Innovation and Opportunity Act, which have not been reauthorized since 2014 and 2020.

Energy and Commerce Holds Joint Subcommittee Hearing Examining Federal Pandemic Response

On February 8^th, the House Energy and Commerce Committee Subcommittees on Oversight and Investigations and Health held a joint hearing to examine the federal pandemic response. Discussion centered on understanding the federal government’s response to COVID-19 and ensuring that steps are being taken to improve preparedness for future pandemics. Democrats and Republicans agreed that changes should be made in preparation for the next public health emergency (PHE) but disagreed on modifications to agency authority. Democrats supported witnesses’ requests for increased authority to bolster emergency preparedness capabilities and address gaps in health equity for future pandemic response. Republicans pushed back, voicing concern that agencies had overstepped their authority while responding to COVID-19.

TRP Outlines Medicare and Medicaid Flexibilities Afforded Under COVID-19 PHE

On Friday, the Department of Health and Human Services (HHS) announced that the COVID-19 public health emergency (PHE) will end on May 11, 2023. Notably, this announcement is consistent with HHS Secretary Xavier Becerra’s assurance to states that the agency would provide 60-days’ notice before terminating the PHE. Several temporary authorities will expire, continuous enrollment requirements will end, and states’ additional federal medical assistance percentage (FMAP) will revert to normal. TRP has issued a detailed memo that includes an outline of administrative and congressional PHE authorities, as well as a comprehensive list of specific PHE-related flexibilities by health program.

Under U.S. law and regulation, many of these flexibilities were made possible by: (1) the Trump and subsequent Biden administration’s declaration of an emergency under the National Emergencies Act (NEA); (2) the presidents’ declaration of emergency under the Stafford Act; and (3) the HHS Secretary’s declaration of a PHE under the Public Health Service Act (PHSA). These declarations permit agencies to take certain extraordinary actions or to allow specified actions by payers and providers that would typically be prohibited. In particular, the combination of an emergency declaration and a PHE enable the use of section 1135 of the Social Security Act (SSA), which allows for the waiver of broad sections of the SSA with regard to Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP).

Senate Judiciary Favorably Reports Five Patent Bills

The Senate Judiciary Committee held an executive business meeting last week, during which lawmakers favorably reported five bills to the Senate floor. Notably, text of any amendments and changes are not yet available. The bills up for discussion included the following pieces of legislation:

• Preserve Access to Affordable Generics and Biosimilars Act (S. 142) —This bill would authorize the Federal Trade Commission (FTC) to initiate proceedings against parties to any agreement resolving or settling a patent infringement claim in connection to the sale of a drug or biological product, also called “pay-for-delay” agreements.
• Stop STALLING Act (S. 148) —This bill would make it an unfair method of competition to submit a “baseless” petition to the Food and Drug Administration (FDA) in an attempt to interfere with a competitor’s application for market approval of a drug, often referred to as a “sham petition.”
• Affordable Prescriptions for Patients Act of 2023 (S. 150) —This bill would prohibit “product hopping” by drug manufacturers — a practice that extends patents through allegedly unsubstantial product innovation. It would also authorize the FTC to enforce this prohibition, and the bill would impose limits on patent litigation involving biological products.
• Interagency Patent Coordination and Improvement Act of 2023 (S. 79) —This bill would create an interagency task force between the U.S Patent and Trade Office (USPTO) and the FDA as a means of sharing information and technical assistance regarding patents.
• Prescription Pricing for the People Act of 2023 (S. 113) —This bill would require the FTC to study pharmacy benefit managers (PBM) and the role they play in the pharmaceutical supply chain. The FTC would then be required to report on recommendations to Congress that would address the Commission’s findings to increase transparency and prevent any anticompetitive practices.