DEMOCRATS PRESS FOR PRE-THANKSGIVING VOTE ON DRUG PRICING BILL

The House Ways and Means Committee last week approved an amended version of legislation that would overhaul how Medicare and private insurers reimburse for prescription drugs, setting up what Democrats hope will be a pre-Thanksgiving vote on the House floor.

It was the third House committee to vote on the bill, which would direct the government to negotiate prices with manufacturers on several dozen high-cost drugs, saving an estimated $345 billion over 10 years. The committee separately approved three bills that would expand Medicare coverage to include dental, vision and hearing services, and those provisions are expected to be attached to the drug pricing bill.

Republicans criticized Democrats on the substance of the legislation, saying it would harm innovation and delay new treatments. They also rebuked Democrats on process, accusing Speaker Nancy Pelosi, D-Calif., of drafting the bill behind closed doors and without bipartisan input. Still, GOP lawmakers have little ability to stop it in the House, although industry advocates are lobbying to ensure that few if any Republicans vote for the bill.

That means Pelosi will need to craft final legislation that balances the interests of moderate Democrats who want to address drug prices, but are worried about government overreach, with those of progressive lawmakers who want to target the pharmaceutical industry with more adverse provisions.

Liberals including Reps. Lloyd Doggett, D-Texas; Pramila Jayapal, D-Wash.; and Mark Pocan, D-Wis. want more prescription drugs to be eligible for government negotiation, and they want people without insurance to be able to purchase medicine at that government-negotiated price. Jayapal also is pressing Democratic leaders to accept her amendment that would study whether pharmaceutical manufacturers should pay rebates to employer-sponsored health plans for drugs whose prices rise above inflation.

While House leaders work to schedule a vote for next month, the Senate remains stalled on its drug pricing bill. Senate Finance Committee Chairman Chuck Grassley, R-Iowa, has so far been unable to coalesce Republicans around his legislation, which aims to lower list prices and reduce beneficiaries’ premiums and out-of-pocket costs but also impose limits on manufacturers’ annual price increases.

Prospects for congressional approval of comprehensive drug pricing legislation remain dim. Lawmakers are focused on approving a stopgap budget bill next month to prevent a government shutdown, and an increasingly likely House vote to impeach President Donald Trump is expected to make cooperation on substantive year-end legislating even more difficult for Republicans and Democrats on Capitol Hill.

DEVICE MANUFACTURERS FACE SQUEEZE AS TAX DEADLINE LOOMS

Medical device manufacturers have generated significant bipartisan support on Capitol Hill to repeal the industry’s 2.3 percent excise tax, but complicated politics, budget deadlines and President Donald Trump’s probable impeachment may undermine efforts to prevent the tax from coming back online in 2020.

Established by the Affordable Care Act (ACA) and first enacted in 2013, the device tax has been suspended by Congress since 2016. But unless lawmakers act this year, the tax will go back into effect in January.

Bipartisan legislation to repeal the tax has been introduced by Sens. Pat Toomey, R-Penn., and Amy Klobuchar, D-Minn., and Reps. Ron Kind, D-Wis., and Jackie Walorski, R-Ind. The Senate bill has 35 co-sponsors, and the House bill is backed by 251 lawmakers.

Advocates are hoping to attach a new suspension to a must-pass budget bill. One candidate is a stopgap spending measure that lawmakers must approve before Nov. 21, when current government funding expires. Discussions have included pairing device tax suspension with relief from other ACA taxes, such as the levy on high-cost health plans.

But because of increased partisanship on the underlying budget issues and the House’s accelerating impeachment inquiry, it’s increasingly likely that any bill extending funding in November will be “clean” – that is, free from non-spending provisions. Worse for device industry advocates, Senate Appropriations Committee Chairman Richard Shelby, R-Ala., said that bill could extend government funding into February or March.

That means there wouldn’t be another must-pass bill that could carry device-tax suspension this year.

While it’s possible Congress could act before 2020 on the device tax and other ACA taxes, it’s increasingly likely those issues won’t be dealt with until next year – just as the $20 billion device tax goes back into effect.

CONGRESS TO VOTE ON SERIES OF HEALTH BILLS THIS WEEK

Senate Democrats this week will try to overturn a Trump administration regulation that they say would harm people with preexisting conditions, while the House is scheduled to vote on a series of healthcare bills, including one that would require pharmacy benefit managers to reveal rebate data.

Sen. Mark Warner, D-Va., is proposing a resolution under fast-track procedures in the Senate to block a White House plan that would allow insurers to offer short-term health plans with coverage below ACA minimum benefits, including not covering preexisting conditions. Democrats call those “junk plans,” while Republicans say they offer affordable alternatives for certain consumers.

Separately, the House will take up a series of healthcare bills that are expected to win bipartisan support. In addition to a bill by Rep. Buddy Carter, R-Ga., on pharmacy benefit managers, measures include legislation by Rep. Elliot Engel, D-N.Y., promoting palliative care education; legislation by Rep. David Joyce, R-Ohio, reauthorization of a workforce program to recruit and retain nurses; and legislation by Rep. Abigail Spanberger, D-Va., increasing transparency on discounts offered by pharmaceutical manufacturers.

HOUSE PANEL TO HOLD HEARING ON DRUG SUPPLY CHAIN

With growing concern about the safety of the foreign-sourced materials used to manufacture prescription drugs, the House Energy and Commerce Health Subcommittee will hold a hearing Wednesday on the global pharmaceutical supply chain.

Dr. Janet Woodcock, director of the Food and Drug Administration’s drug evaluation and research center, will be among the witnesses testifying.

The United States relies on foreign sources for the active pharmaceutical ingredients used in medicines, with China being the leading supplier. Nearly 85 percent of the facilities manufacturing those ingredients are located overseas, mostly in China and India, where both production costs and local government oversight are low.

The Chinese manufacturer of a commonly used blood pressure medicine triggered an international recall last year when it reported that active substances in the drug contained traces of a dangerous carcinogen.

The subcommittee hearing will examine how the federal government and the drug industry can partner to ensure the safety and security of active pharmaceutical ingredients and to diversify the supply chain.

SENATE HEARING TO FOCUS ON MEDICAID COMPLIANCE

Government watchdogs are among the witnesses scheduled to testify at a Senate Finance Committee hearing this week examining Medicaid compliance and eligibility requirements.

Brian Ritchie, the assistant inspector general for audit services for the Department of Health and Human Services, and Carolyn Yocom, the director of healthcare at the Government Accountability Office, will be the featured witnesses at the hearing.

Also scheduled to testify are Daryl Purpera of the Louisiana Legislative Auditor’s Office and Judith Solomon, a senior fellow of the Center on Budget and Policy Priorities.

SENATE PANEL TO EXAMINE OVER-THE-COUNTER DRUG BILL

The Senate HELP Committee on Thursday is scheduled to review a series of healthcare-related bills, including legislation that would overhaul the way over-the-counter (OTC) medications are regulated and brought to market.

That bipartisan bill, sponsored by Sens. Johnny Isakson, R-Ga., and Bob Casey, D-Penn., would modernize the OTC monograph system that the Food and Drug Administration (FDA) uses to regulate retail medicines. That monograph has largely been unchanged since it was established in 1972.

The legislation would update the OTC rulemaking process to be the same as the administrative process and legal authority used for other FDA medical product approvals. It also would create an incentive to bring innovative OTC products to market by providing a two-year period of product differentiation to reward innovation.

The committee also is scheduled to examine legislation by Sen. Susan Collins, R-Maine, that would renew and increase federal funding for the Lifespan Respite Care Act, which provides state grants to support caregivers nationwide who provide care for loved ones with chronic, disabling health conditions. First introduced by former Rep. Mike Ferguson, R-N.J., and enacted in 2006, the respite care law has led to grants in 37 states and the District of Columbia. (Ferguson is now the leader of BakerHostetler’s Federal Policy team.)

Other bills under consideration by the committee include one that would renew the Healthy Start Act, which aims to reduce the national infant mortality rate, and legislation reauthorizing a national nursing program.

SENATE BILL WOULD ADDRESS RURAL ACO REIMBURSEMENT IMBALANCE

Bipartisan legislation introduced in the Senate last week aims to support rural healthcare providers that operate with accountable care organizations (ACO).

Currently, rural providers are discouraged from participating in ACO payment models because their efficiency may be counted against them, said Sens. Pat Roberts, R-Kan., and Catherine Cortez Masto, D-Nev. But new legislation introduced by the senators would change the ACO reimbursement formula to ensure rural providers are on a level playing field with their urban counterparts.

Under current law, ACO reimbursement rates are calculated by comparing the per-patient costs of a region’s ACO with the operating costs of non-ACO regional peers. But in many rural areas, an ACO may be the dominant healthcare provider, and without peers for comparison, rural ACOs often have a lower spending benchmark and are rewarded a lower savings bonus than are urban ACOs, the senators said.