United States: Capitol Hill Healthcare Update - March 27, 2017

AHCA Autopsy: What Happened, What's Next?

House Speaker Paul Ryan's decision to cancel Friday's vote on the American Health Care Act triggered post-mortem jockeying among vying GOP factions struggling to come to grips with how the party failed to repeal a law it has singularly campaigned against for the last seven years. Republicans' inability to muster a majority of their 237 House members to back Ryan's plan was the result of a combination of factors, including the evolving policy demands of conservative lawmakers as well as the powerlessness of congressional leaders and the White House to persuade the rank and file to stay in line.

Just five months ago, President Trump ran up huge winning margins in most of the congressional districts represented by conservatives, including the 30-member House Freedom Caucus. Those conservatives once feared Trump; they openly fretted about how a single Trump tweet could roil their voters. But during a White House meeting last week, conservatives defied Trump's call to support the bill and instead proposed a series of ever-changing policy demands. They wanted to jettison the 10 essential health benefits the Affordable Care Act (ACA) requires insurers to include in all plans, which conservatives believe are market-distorting mandates that are causing prices to skyrocket. Trump agreed to drop them. But conservatives had more demands, including allowing insurers to charge different premiums based on age, gender and pre-existing health condition.

Ending those policies on community rating and guaranteed issue would have undercut the bill's support from moderate Republicans, who were already distraught over separate Medicaid changes and were backing away from the legislation. Trump denied the Freedom Caucus's last demand, and the group couldn't accept what otherwise would have been seemingly historic conservative policy victories ending most of the ACA and its mandates, repealing nearly $1 trillion in ACA taxes, and overhauling Medicaid.

Can the GOP's plans to repeal the ACA be resurrected? At least in the short term, probably not. Trump and Ryan are signaling that they are pivoting to budget issues and tax reform. Procedurally, the reconciliation legislation that Republicans were using to repeal the ACA will expire as soon as Congress authorizes a new fiscal 2018 reconciliation bill, which GOP leaders plan to use for tax reform. Without the procedural protections of the reconciliation bill, which can't be filibustered in the Senate, Republicans would be forced to persuade at least eight Senate Democrats to vote for any ACA-related legislation.

Trump said last week that he's content to sit on the sidelines while the ACA "explodes," especially in the individual market, where insurers are pulling out and premiums are rising. It's not clear whether the U.S. Department of Health and Human Services (HHS) will try to hasten that explosion through rulemakings or instead prop up the individual market while attempting to forge bipartisan fixes with congressional Democrats.

Despite the Republicans' political implosion, legislating on healthcare is far from over. Before fall, Congress must approve new Food and Drug Administration (FDA) user fee agreements with pharmaceutical and medical device manufacturers as well as reauthorize the Children's Health Insurance Program. Trump also said he wants to work with Democrats, including Rep. Elijah Cummings (D-Md.), on bringing down prescription drug costs.

Still, given the Republicans' seven-year campaign against the ACA, Speaker Ryan's statement when he canceled the repeal vote was jarring: "Obamacare is the law of the land. We're going to be living with Obamacare for the foreseeable future."

Price to Testify on Trump's HHS Budget

HHS Secretary Tom Price is expected to face a bipartisan gauntlet Wednesday when he defends before skeptical lawmakers the Trump administration's proposed deep budget cuts for health and medical research programs. The House appropriations subcommittee that funds HHS and its related agencies scheduled a hearing to examine President Trump's fiscal 2018 budget proposal. Price is the only witness.

Trump is calling on Congress to reduce HHS spending by 18 percent, or about $15 billion from the current fiscal 2017 spending level; cut  funding by $5.8 billion; increase industry FDA user fees and cut congressional appropriations for the agency; and shutter the Agency for Healthcare Research and Quality. Democrats have criticized the spending cuts – especially for NIH – but so have Republicans, including Rep. Tom Cole (R-Okla.), who is chairman of the appropriations subcommittee that funds HHS.

Alexander Praises Gottlieb After Meeting

President Trump's nominee to lead the FDA had a positive meeting last week with the senator whose committee is responsible for confirming Dr. Scott Gottlieb to lead the agency. Senate HELP Committee Chairman Lamar Alexander (R-Tenn.) said he had an "excellent meeting" with Gottlieb and declared him "well-qualified to lead the FDA." Alexander said confirmation hearings would be scheduled after Gottlieb completed required Office of Government Ethics paperwork.

Gottlieb has held several positions within the FDA, including as deputy commissioner. In addition to agency experience, Gottlieb has been on the frontlines of healthcare as a physician and a patient. He trained at the Mount Sinai School of Medicine and is a cancer survivor having been successfully treated for Hodgkin's lymphoma.

Gottlieb isn't likely to win widespread bipartisan support. He's generally an advocate of deregulation and has worked at conservative policy think tanks. Some consumer groups and Democrats have already come out against his nomination.

GOP-Led House Panel Probes Drug Prices

A House subcommittee led by conservative Republicans who opposed their party's effort to repeal the ACA held a hearing last week on drug prices, saying pharmaceutical manufacturers are manipulating regulatory safeguards to drive up prices and block generic competitors. Ostensibly to shed light on the pharmaceutical supply chain, the hearing focused on drug prices and how supply chains and FDA safety mechanisms like Risk Evaluation and Mitigation Strategies (REMS) can be used to increase prices and thwart generic competition. Witnesses included an official from the Association for Accessible Medicines (formerly GPhA), a consumer group and a Johns Hopkins University professor critical of branded drug companies.

The House Oversight and Government Reform Subcommittee on Health is chaired by Rep. Jim Jordan (R-Ohio), one of the founders of the conservative Freedom Caucus. The caucus's current chairman, Rep. Mark Meadows (R-N.C.), also is a member of the subcommittee. The top Democrat on the full committee, Rep. Elijah Cummings (D-Md.), also participated in the hearing, criticizing increases in drug prices and companies that he said were hiding behind FDA safety programs like REMS to block entry of generic drugs.

Dr. Janet Woodcock, who leads the FDA's drug center, told the subcommittee that the agency receives 150 complaints annually from generic manufacturers saying they can't gain access to drugs for bioequivalence testing because of REMS.

Draft Bill Would Give FDA Authority Over Lab-Developed Tests

Two House members last week released draft diagnostics reform legislation that would grant the FDA new regulatory authority over the creation and manufacturing of laboratory-developed tests. Reps. Larry Bucshon (R-Ind.) and Diana DeGette (D-Colo.) are seeking stakeholder feedback on their draft bill by April 7. Both lawmakers are senior members of the House Energy and Commerce Committee, which has jurisdiction over the FDA and previously has released related legislation.

Under the draft bill, in vitro clinical tests would have their own FDA regulatory structure separate from that of traditional medical devices. The legislation would also grant the FDA jurisdiction over test development and manufacturing, with the Centers for Medicare and Medicaid Services maintaining oversight of laboratory operations pursuant to the Clinical Laboratory Improvement Amendments (CLIA) law.

It's not currently clear if the draft legislation can be finalized in time to be included with the separate medical device user fee reauthorization, which Congress is aiming to approve by summer.

House Panel Eyes Medical Device User Fees

The House Energy and Commerce Health Subcommittee on Tuesday will hold a hearing on the FDA's medical device user fee program. Dr. Jeff Shuren, who leads FDA's device center, is scheduled to testify. Other scheduled witnesses include Cynthia Bens of the Alliance for Aging Research; Robert Kieval of CVRx, a Minnesota-based device manufacturer; Patrick Daly of Cohera Medical, a North Carolina-based device manufacturer; and Diane Wurzburger of GE Healthcare. The pending medical device user fee proposal builds on sweeping changes enacted under the current agreement, which called for higher industry user fees in return for stepped-up agency performance and review times. The FDA estimates that the industry fees negotiated in the proposed agreement will average $200 million per year.

Sanders, Cummings Demand Company Pricing Details

Two Democratic lawmakers leading the charge on lowering prescription drug prices are calling on New Jersey-based PTC Therapeutics to release information about the price it will charge for its drug to treat Duchenne muscular dystrophy. Sen. Bernie Sanders (I-Vt.) and Rep. Elijah Cummings (D-Md.) sent a letter last week to CEO Stuart Peltz after the company purchased the drug, deflazacort, from Marathon Pharmaceuticals. The two lawmakers in February wrote to Marathon after media reports that the company planned to charge $89,000 per year for the treatment, which they say is currently available outside the United States for $1,000. "We urge you to keep the price of this relatively common steroid at its current importation cost," Sanders and Cummings wrote. "Doing so will allow patients to use deflazacort in combination therapies without going into bankruptcy."

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