United States: Capitol Hill Healthcare Update - April 2017

GOP Struggles To Revive Health Bill

House Republicans of all ideological stripes say they are committed to rekindling interest in the American Health Care Act (AHCA), but while the interest is real, so too are the policy and political divisions that thwarted passage of the bill last month.

When House Speaker Paul Ryan and other GOP leaders said intra-party discussions would continue with the hopes of reaching consensus and a possible vote on the AHCA, it wasn't happy talk. Rank-and-file Republicans say keeping the Affordable Care Act (ACA) in place presents at least as many political problems as the party's effort to repeal it. For example, failing to repeal the $1 trillion in ACA taxes significantly complicates the GOP's goal of enacting sweeping tax reform later this year.

The House won't reconsider the AHCA legislation this week before lawmakers adjourn for a two-week recess. Even after Congress reconvenes April 25, immediate budget deadlines that threaten a potential government shutdown will likely be lawmakers' top priority.

If there's a window to reconsider the AHCA, it's likely in May. But it's a narrow window.

The Republicans' process to repeal the ACA includes using a procedural tool known as budget reconciliation, which shields the bill from a Senate filibuster. Without that shield, Republicans would be forced to persuade at least eight Senate Democrats to vote with them – a political non-starter.

But the reconciliation legislation that the GOP is using to partially repeal and replace the ACA has a half-life. It will expire when Congress begins drafting the fiscal 2018 budget blueprint, which will likely be sometime in May. So if Republicans want to resurrect the AHCA and avoid the need for bipartisan votes in the Senate, they will have to vote on the bill within the next several weeks.

Still, despite the positive statements by Ryan and other Republicans, the intra-party squabbles that derailed the bill remain – and show no signs of abating. President Trump's recent Twitter attacks against the conservative leaders of the Freedom Caucus did little other than harden their opposition. Trump has talked about trying to create a coalition of moderate Democrats and Republicans to pass an ACA repeal bill. But the policy concessions needed to attract Democrats would likely repel just as many Republicans.

Ten days after Republicans' remarkable decision to cancel the House vote on the AHCA, their healthcare legislation isn't dead, but it is on life-support.

FDA Would Mostly Grind To A Halt Under Shutdown

The last time the government closed because of budget brinkmanship in Washington, the FDA and many other federal health agencies were virtually shuttered and thousands of employees were furloughed. Congress is scheduled to be in session for only eight days this month before facing an April 28 deadline to approve new spending or risk a government shutdown. While GOP leaders on Capitol Hill are adamant that they won't let the government close, some Republican lawmakers are warning that the intra-party feuding over funding for the Pentagon, Planned Parenthood and the Affordable Care Act makes the risk of a shutdown real.

During the last shutdown four years ago, nearly half of the FDA's 14,000 employees were furloughed. Although critical functions like high-risk recalls and the monitoring of adverse-event reporting continued, most FDA functions were shuttered, including inspections, monitoring and enforcement. FDA programs funded by user fees weren't totally immune during the last shutdown. Advisory committee meetings were postponed, and some drug and medical device manufacturers saw delays in approvals, although reviews continued. But the FDA didn't accept any new drug or device applications during the 2013 shutdown.

The Trump administration has latitude to determine which agency and personnel are deemed critical and will stay operational even if the government is closed. But industry stakeholders with planned advisory committees or scheduled agency interactions could face disruption and delays during a shutdown.

Senate Panel Considered Gottlieb This Week

The Senate Health, Education, Labor and Pensions (HELP) Committee considered Dr. Scott Gottlieb's nomination to be the FDA commissioner on Wednesday.

The committee's chairman, Sen. Lamar Alexander (R-Tenn.), pronounced Gottlieb "well-qualified" during a one-on-one meeting last month. Gottlieb has held a series of positions within FDA, including deputy commissioner, and has served at the Centers for Medicare & Medicare Services (CMS).

But the top Democrat on the panel, Sen. Patty Murray (D-Wash.), said she is "deeply concerned" that Gottlieb is too close to the industries the FDA regulates. Gottlieb served as a consultant and board member to several pharmaceutical manufacturers, and he also announced he would recuse himself from agency considerations affecting 20 companies.

Alexander announced that a full Senate vote on Dr. Gottlieb's nomination will likely occur later this month after the Senate returns from a two-week recess.

Dems' Bills Take Aim At Drug Manufacturers

Nearly two dozen House and Senate Democrats introduced sweeping legislation last week that directly confronts the pharmaceutical industry in the battle over prescription drug costs. The Democrat-only bills, introduced separately in the House and Senate, include virtually every adverse provision ever proposed against the drug industry, including:

  • Allowing Medicare to negotiate drug prices
  • Extending Medicaid rebates to Medicare beneficiaries
  • Importing prescription drugs from other countries
  • Lowering exclusivity for biologics from 12 years to seven years
  • Applying an excise tax on companies that raise drug prices more than medical inflation
  • Shrinking exclusivities so the FDA can accept generic applications after three years instead of five years
  • Preventing manufacturers from deducting the cost of consumer advertising
  • Requiring companies to disclose research, manufacturing and marketing costs

Led by Sen. Al Franken (D-Minn.), the far-reaching legislation attracted support from other senators, including Bernie Sanders (I-Vt.), Elizabeth Warren (D-Mass.), Kirsten Gillibrand (D-N.Y.), Dick Durbin (D-Ill.), Richard Blumenthal (D-Conn.) and Cory Booker (D-N.J.). The Senate bill – a companion bill was introduced in the House – also was endorsed by 15 public-sector unions and consumer groups.

It's unlikely the House and Senate bills will gain traction in the Republican-controlled Congress, where GOP lawmakers have long opposed nearly every provision in the legislation. Still, the Democrats hope to piggy-back on mounting attention over prescription drug prices and even President Trump's statements against the industry. The White House hasn't announced a specific plan to reduce drug prices or endorsed any legislative efforts, including Franken's.

Senate Bill Seeks To Improve Local Coverage Determination Process

Bipartisan legislation introduced in the Senate aims to provide transparency and predictability to the local coverage determination process used by Medicare Administrative Contractors (MACs). Industry and congressional critics have long complained that the contractors' use of the process lacks transparency and meaningful stakeholder input. That process also is not defined in statute, leaving the contractors with latitude to set their own guidelines in 10 regions across the country. Introduced by Sens. Johnny Isakson (R-Ga.), Thomas Carper (D-Del.), Debbie Stabenow (D-Maine) and John Boozman (R-Ark.), the bill would require open and public MAC meetings, disclosure by MACs of the rationale for local coverage decisions, and providing the industry with a meaningful reconsideration process for decisions. Similar legislation was introduced in the last Congress, but it didn't pass.

Senate Panel Holds User Fee Hearing

The Senate HELP Committee on Tuesday held its second hearing on FDA user fees, featuring witnesses representing medical device, biotechnology and generic drug manufacturers. Witnesses included Kay Holcombe of BIO, David Gaugh of Association for Accessible Medicines (formerly GPhA), Scott Whitaker of AdvaMed, and Cynthia Bens of the Alliance for Aging Research. The FDA's current user fee agreements expire September 30, and Congress is reviewing the several industry deals with the agency.

Key Appropriator Nixes Trump's NIH Cuts

The chairman of the House appropriations panel that funds federal health programs and agencies rejected President Trump's proposed spending cuts for the National Institutes of Health (NIH). Rep. Tom Cole (R-Okla.) reiterated his support for NIH funding during a subcommittee hearing last week with HHS Secretary Tom Price, who faced bipartisan criticism over the president's proposed cuts. The White House wants to reduce NIH spending by $5.8 billion, a cut of about 20 percent. Price said Trump wants to reduce NIH's spending only on administration, not on research and grant funding. NIH has enjoyed long-standing bipartisan support in Congress, and lawmakers in December boosted NIH funding by $4.8 billion.

Healthcare Cybersecurity Focus Of Hearing

The House Energy and Commerce Subcommittee on Oversight and Investigations held a hearing Tuesday on how government and industry can better partner to enhance healthcare cybersecurity. Witnesses included Denise Anderson of the National Health Information Sharing and Analysis Center, Michael McNeil of Royal Philips, and Terry Rice, the chief information security officer at Merck. The subcommittee's chairman, Rep. Tim Murphy (R-Pa.), said efforts to bolster cybersecurity in the healthcare sector have been "sporadic and largely ineffective."

The hearing addressed ways to strengthen the National Health Information Sharing and Analysis Center and the Healthcare and Public Health Sector Coordinating Council. The lawmakers also reviewed HHS's role as a so-called Sector-Specific Agency, which charges the department with providing support and guidance to industry stakeholders and implementing government-wide cybersecurity initiatives and strategies.

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