TRP Health Policy Report (7/27)

July 27, 2020

Capitol Hill Update

Senate Republicans are poised to officially introduce their ‘CARES 2.0’ proposal this week after delaying its rollout due to lingering debates over certain policy issues. While Senators reached an “agreement in principle” last week according to Majority Leader Mitch McConnell (R-KY), disagreements over the unemployment insurance and stimulus payment pieces pushed the intraparty negotiations into the weekend. Once the bill is officially introduced, negotiations between Senate Republicans, House Democrats, and the Trump administration will begin in earnest, and the sides will need to bridge deep divides over the size and scope of the next COVID-19 relief bill. If the parties struggle to clinch an agreement, it’s likely that lawmakers could try to pass smaller bills that address pressing areas of need such as extending unemployment insurance and the moratorium on housing evictions. For more details on the Senate GOP’s forthcoming proposal, click here for a draft summary obtained by TRP.

On the floor this week, House lawmakers are set to take up their second “minibus” this week after clearing the spending bills for Agriculture-FDA, State-Foreign Operations, Interior-Environment, and Military Construction-Veterans’ Affairs last Friday. The second package consists of the spending bills for Defense, Commerce-Justice-Science, Energy and Water Development, Financial Service and General Government, Homeland Security, Labor-HHS-Education, and Transportation-Housing and Urban Development. Additionally, lawmakers will also take up a pair of child care-related measures (H.R. 7327; H.R. 7027), as well as the Water Resources Development Act of 2020. In the upper chamber, Senators are expected to primarily focus on nominations until a bipartisan agreement on COVID-19 relief legislation is reached.

President Trump Signs Four Drug Pricing Executive Orders

President Donald Trump signed four Executive Orders (EO) on Friday aimed at lowering drug prices. The EOs target policies long-discussed by the Trump administration as solutions to bringing down the costs of pharmaceuticals, including: (1) requiring federally qualified health centers (FQHC) to pass 340B program pricing on EpiPens and insulin to patients; (2) allowing the importation of prescription drugs from Canada and other countries; (3) requiring pharmacy benefit manager (PBM) negotiated discounts to be directly passed on to patients; and (4) requiring Medicare to pay the lowest price for Part B drugs among other advanced nations. President Trump noted during his announcement at the White House that the U.S. has been waiting for Congress to take action “for many decades” to reduce drug prices and declared that he was “unwilling to wait any longer.”

The announcement was seen by many as a last-ditch effort by the president to deliver on his campaign promise to lower pharmaceutical prices before the November election, and it is not immediately clear how quickly the administration will be able to finalize the policies. Additionally, most of the policies announced on Friday have been previously proposed by the administration and have not yet been finalized. If the administration is able to finalize the policies before the November election, however, it is highly likely they would be challenged in court. The pharmaceutical industry has already publicly warned the administration that their importation plan and favored nation policies are unconstitutional. In addition, the announcement received a lukewarm reception on Capitol Hill, with House Energy & Commerce Chairman Frank Pallone (D-NJ) saying that if the President were serious about curbing drug prices, he would work with Democrats on H.R. 3, while Ways & Means Ranking Member Kevin Brady (R-TX) praised the one-month delay on the “favored nations” policy. Congressional Republicans have long been skeptical of international pricing index (IPI) proposals.

President Trump announced that drug company executives — who have opposed many of the policies offered in the EOs — will be at the White House on Tuesday to discuss the actions and propose alternatives to the “favored nations” EO. President Trump said that if pharmaceutical industry representatives and the White House can reach agreement, the administration may not implement the “favored nations” policy. While the president signed the order, it does not go into effect for 30 days and may be rescinded if a satisfactory agreement is reached.

HHS Secretary Azar Renews PHE for COVID-19

Last Thursday, Department of Health and Human Services (HHS) Secretary Alex Azar renewed for the second time the Public Health Emergency (PHE) due to COVID-19. The declaration went into effect July 25 and extends the PHE for an additional 90 days. In announcing the renewal, the Secretary stated, “the administration will continue its whole-of-America response to ensure Americans can get the care they need throughout the pandemic.” 

Secretary Azar originally declared a PHE on January 31, 2020, retroactive to January 27. President Trump declared a national emergency under both the NEA and the Stafford Act on March 13, 2020, retroactive to March 1. The Secretary renewed the PHE for the first time on April 21. The combination of these declarations empowered the federal government to take action to provide flexibility to the health care system to combat COVID-19, and their continued existence allows for the maintenance of those flexibilities.

Several significant health care policies are attached to the public health emergency, including: waivers of telehealth restrictions, increased federal Medicaid matching rates, waivers for certain provider requirements, requirements that insurers cover COVID-19 testing without cost-sharing, exceptions to requirements for prescription of controlled substances, among others. This TRP Special Report describes the flexibilities that were enabled by the PHE and related national declarations. 

HHS to Send Additional $5 Billion to Nursing Homes, Mandate Testing in Hot Spots

The president announced last Wednesday that the administration will send an additional $5 billion in relief funding to nursing homes from the provider relief fund, although the funding will be contingent on nursing homes implementing infection control best practices training. The Department of Health and Human Services (HHS) also announced that it will require nursing homes in states experiencing outbreaks to test staff. The funding will be marked for hiring additional staff, implementing infection control programs, increasing testing, and providing technology for use for virtual family visits. The announcement follows outcry from nursing home advocates that they weren’t initially prioritized in provider relief fund distribution and only received $4.9 billion.

The Centers for Medicare and Medicaid Services (CMS) and Centers for Disease Control and Prevention (CDC) will implement the required online infection control training, which will include information on best practices for nursing homes. Nursing homes with recent infection control deficiencies and COVID-19 cases will receive specialized technical assistance from the agencies. Additionally, all nursing homes within states experiencing five percent or more positivity rates for coronavirus will be required to test nursing home staff each week. CMS Administrator reported that a forthcoming rule from CMS will lay out details for the testing requirement, although did not provide a timeline for the rule’s release.

FDA Proposes Right to Try Reporting Requirements

Last Thursday, the Food and Drug Administration (FDA) propose a rule to implement a statutory requirement for sponsors and drug manufacturers to provide an annual summary to the FDA for any eligible investigational drug they provide to eligible patients under the Right to Try Act. The Summary Reporting Requirements Under the Right to Try Act (press, release, proposed rule) are intended to provide more transparency around how patients are using experimental drugs through annual reporting requirements. The requirements also are designed to help FDA assess the effectiveness of the Right to Try pathway at opening access to innovative drugs. FDA’s Deputy Commissioner for Medical and Scientific Affairs Dr. Anand Shah noted that the agency was dedicated to achieving the goals Congress set forth in the Right to Try Act, and said the “proposed rule builds on the FDA’s long-standing dedication to enhancing access for patients who are facing life-threatening diseases or conditions and our continued commitment to transparency.”

The President signed the Right to Try Act into law in May 2018. The bill allowed the provision of unapproved, investigational drugs to terminally ill patients that have exhausted approved treatment options and are unable to participate in clinical trials involving the innovative treatments. Only drugs that are in active clinical trials and have cleared initial preliminary testing may be considered. It required the manufacturers of eligible investigational drugs to report annually to the FDA on usage under the law, a summary of which would be published online by the agency. Additionally, the bill did not obligate drug makers to provide the treatments, limited their liability, and did not prevent them from charging patients for associated costs if treatment is provided. Although a top priority for the White House and administration, the legislation faced controversy in Congress. Opponents of the bill argued it would weaken the FDA’s oversight and that the agency already had a way for terminally ill patients to use unapproved treatments, under which the FDA claims it approves more than 99 percent of requests.

Since last fall, there have only been two publicly reported cases of the Right to Try Act authority. The FDA has stated that it lacked necessary information on the number of patients that had accessed or requested pharmaceuticals under the law. Under the proposed rule, the agency would require reports to include the number of doses supplied and their use, the number of patients treated, and any serious adverse effects from drug use. The FDA expects that the reporting requirements could cost $5.6 million over a decade. In addition, based on the information in these annual summaries, the FDA intends to post online an annual summary report. The FDA will accept comments on the proposed rule for 60 days after it is published in the Federal Register.