Below is this week’s “Capitol Hill Healthcare Update,” which is posted on Mondays when Congress is in session. Highlights this week: how the partial government shutdown is affecting operations at the FDA; House Democrats take steps to defend the ACA; the House votes this week to renew emergency health response programs; new senators are added to key healthcare committees; and more.

FDA IMPACTED AS GOVERNMENT SHUTDOWN CONTINUES

The partial government shutdown – now in its 17th day – shows no signs of abating as President Donald Trump and congressional Democrats continue a standoff over border security funding.

The impasse is affecting operations at FDA, which said as many as 7,997 employees would be furloughed during the funding shortfall.

The impasse has affected operations at the FDA, which cannot accept new drug or medical device applications that require industry fees, Commissioner Scott Gottlieb tweeted last week. Agency operations funded by user fees that had already been paid can continue, including interactions with manufacturers over clinical trials.

Despite the furloughs, the agency said it would be able to respond to emergencies such as drug shortages and outbreaks related to foodborne illnesses and infectious diseases. FDA also said it could still manage high-risk recalls, pursue criminal enforcement and civil investigations, and review import entries.

Congress has approved most government funding, including for federal healthcare operations at HHS, CMS and other agencies. Lawmakers haven’t passed funding for the departments of Agriculture, Commerce, Justice, Homeland Security, Interior, State, Transportation, and Housing and Urban Development, as well as several smaller agencies.

FDA’s budget, excluding user fees, is funded as part of the agriculture appropriations bill.

HOUSE TO RENEW PANDEMIC PREPAREDNESS, CREATE FDA OVERSIGHT OF OTC DRUGS

The House is scheduled to vote Tuesday on bipartisan legislation reauthorizing more than $7 billion for HHS to respond to health disasters, biological and chemical threats, and emerging infectious diseases.

Reps. Anna Eshoo, D-Calif., and Susan Brooks, R-Ind., first introduced the legislation last month, but it stalled in the Senate after winning House approval. In addition to renewing pandemic and other emergency health response programs, the legislation would create FDA oversight – including establishing $134 million in industry user fees over five years – for over-the-counter drugs.

Eshoo is chairwoman of the Energy and Commerce Health Subcommittee, where Brooks also serves as a member.

Despite winning House approval 367-9, the bill died in the Senate during the lame duck session’s waning hours in December amid a squabble by Sen. Richard Burr, R-N.C., who objected to the new user fee regime for nonprescription drugs, and Sen. Johnny Isakson, R-Ga., who in turn objected to advancing Burr’s version of the pandemic preparedness bill.

HOUSE DEMOCRATS’ FOCUS ON ACA COULD DELAY MEDICARE FOR ALL DEBATE

House Democrats last week filed a motion to intervene in a case where a federal judge in Texas struck down the Affordable Care Act (ACA) as unconstitutional, potentially delaying an intraparty debate on expanding Medicare as lawmakers focus instead on shoring up their party’s signature health reform law.

The Democrats’ motion filed with the federal district court seeks to position the party as defenders of the ACA, which the Trump administration has declined to defend in court since 2017. Democrats also have scheduled a House vote this week on a motion supporting intervening in the case – a vote designed to pressure Republicans on the ACA’s pre-existing conditions protections.

Rep. Pramila Jayapal, D-Wash., said the threat that 20 million Americans could lose coverage if the ACA ruling is sustained means Democrats must focus first on strengthening the ACA, not debating expanding Medicare. Jayapal, who is co-chairwoman of the Medicare for All Caucus, said Democratic leaders have pledged to hold hearings this spring on Medicare for All legislation, which she said would be introduced later this month.

Leading House Democrats said they will push to increase government subsidies to lower premiums for ACA health plans and restrict Republican-backed short-term plans as part of their proposals to strengthen the ACA.

Meanwhile, House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., said his committee would hold hearings this month on the court case. He said if the ruling stands, “millions of Americans could lose their health coverage [and it would] allow insurance companies to once again discriminate against more than 133 million Americans with pre-existing conditions.”

Senate Finance Committee Chairman Chuck Grassley, R-Iowa, tweeted after the Texas district judge’s ruling that the ACA is “fatally flawed” and that his committee will hold hearings on the health law this year, too.

The judge ruled last month that the ACA is invalid without the “individual mandate,” which penalized Americans who declined to purchase health insurance by imposing a tax. But Congress effectively repealed the individual mandate in the 2017 tax overhaul by eliminating the tax penalty.

HOUSE TO VOTE ON MEDICAID EXTENDERS BILL

The House this week is scheduled to vote on bipartisan legislation that would help states rebalance their Medicaid long-term care systems and protect Medicaid recipients with home and community-based services against spousal impoverishment.

The legislation was introduced last week by House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., and Rep. Greg Walden, R-Ore., the top Republican on the panel. The provisions were included in separate Medicaid legislation that won House approval last month but was not considered by the Senate.

Nearly 100,000 people with chronic conditions and disabilities have transitioned from institutions back into their communities under the Money Follows the Person Rebalancing Demonstration Grant program, which the bill would reauthorize.

The legislation also would renew for three months a federal provision that disregards a spouse’s income when determining Medicaid eligibility for an individual receiving home- and community-based services.

HEALTH BILLS THAT DIDN’T PASS LAST YEAR FACE UNCERTAIN 2019 FATE

Pharmaceutical manufacturers face an even more daunting political dynamic in 2019 after failing last year to persuade Congress to change mandated drug discounts in the Medicare Part D “doughnut hole.”

Based in part on an erroneous Congressional Budget Office fiscal forecast, lawmakers last year voted to increase the industry’s discounts from 50 percent to 70 percent for drugs in the program’s coverage gap, before Part D’s catastrophic coverage begins.

Industry advocates later tried to lower that discount to 63 percent, but House Democrats never backed that plan. The Trump administration also was cool to what was largely viewed as aiding the pharmaceutical industry at a time when the White House was aggressively pursuing policies aimed at lowering drug prices.

With Democrats now in the majority in the House and Trump still pressing to lower drug prices, the likelihood of recalibrating the industry’s doughnut-hole discounts in 2019 is low.

Medical device manufacturers last year came close to securing repeal of the 2.3 percent excise tax on medtech sales. A stand-alone bill to repeal the tax won House approval 283-132 last June, but industry advocates couldn’t get the 60 votes needed in the Senate to advance the bill.

The Republican-controlled Ways and Means Committee last month introduced a catchall tax bill that included a five-year suspension of the device tax. But that effort also failed to advance.

The device tax is in the final year of an earlier-approved suspension and will come online again in 2020 unless Congress acts this year.

The House last December overwhelmingly approved a Medicaid bill that among other things would allow states to coordinate care for children with complex medical needs. But the bill died after Sen. Mike Lee, R-Utah, blocked it from being considered under expedited procedures in the waning days of last year’s congressional session.

All bills that weren’t enacted last year must be reintroduced in the new Congress, and the effort to pass them starts from scratch.

SENATOR CRITICIZES MAJOR DRUG INDUSTRY MERGER

Sen. Elizabeth Warren, D-Mass., last week criticized the $74 billion acquisition of Celgene by Bristol-Myers Squibb, saying industry mergers only exacerbate “skyrocketing drug costs.”

Warren, who this month announced she is exploring a 2020 presidential run, has been a frequent drug industry critic. Last month she introduced legislation to create an “Office of Drug Manufacturing” within HHS, giving the federal government the authority to manufacture generic drugs.

“Giant drug companies only care about one thing: raking in profits on the backs of patients,” Warren tweeted last week. “Mergers that mean more money for drug company CEOs while patients pay the price are not a solution to skyrocketing drug costs.”

NEW SENATORS ADDED TO KEY HEALTH COMMITTEES

The start of a new session of Congress means new lawmakers appointed to serve on key healthcare committees.

Five senators will join the ranks of the Finance Committee, which has jurisdiction over Medicare and Medicaid: Sens. Todd Young, R-Ind.; Steve Daines, R-Mont.; James Lankford, R-Okla.; Maggie Hassan, D-N.H.; and Catherine Cortez Masto, D-Nev.

Sen. Chuck Grassley, R-Iowa, succeeds longtime committee Chairman Orrin Hatch, R-Utah, who didn’t seek re-election last year.

Sens. Mitt Romney, R-Utah, Mike Braun, R-Ind., and Jacky Rosen, D-Nev., joined the Health, Education, Labor and Pensions Committee. Sen. Michael Bennet, D-Col., will no longer serve on the committee, and Young will leave the committee to join the Finance panel. The so-called HELP Committee’s jurisdiction includes most of HHS, including the FDA, CDC and NIH.

Democrats and Republicans in the House are expected to finalize the membership on its two principal healthcare panels – the Energy and Commerce Committee and the Ways and Means Committee – in the coming weeks.