United States: Capitol Hill Healthcare Update - January 29, 2018


After a tumultuous year on Capitol Hill – with repeated efforts to repeal the Affordable Care Act and stalled attempts to renew the Children's Health Insurance Program – President Donald Trump isn't likely to focus on healthcare policy in his State of the Union address Tuesday night.

White House aides previewing the speech this weekend said its major themes will focus on economic growth, infrastructure, immigration and national security. Except for calling for more funding to combat the opioid crisis or highlighting that the ACA's individual mandate was repealed in last month's tax cut legislation, the president isn't expected to address major healthcare policy.

One of Trump's guests in the gallery is expected to put a "human face on the opioid crisis and [highlight] the heroes involved in that effort," according to a White House official previewing the speech this weekend to stakeholders.


Congress last week approved a six-year renewal of CHIP as part of a budget agreement to temporarily reopen the government.

On the budget, that agreement effectively kicks the can down the road to Feb. 8, when lawmakers will be faced with another deadline. But as part of the deal to reopen after the three-day shutdown, CHIP advocates and providers finally received long-term certainty after the program expired last September. With passage of the CHIP reauthorization, federal funding now will be locked in through fiscal year 2023.

Separately, as Congress tries to resolve the budget fight, lawmakers are looking for offsets to balance increases in other spending. Democrats in particular are pushing for more than $10 billion in savings from the pharmaceutical industry, including Medicaid rebates for drug line extensions, changing biosimilars' treatment in Medicare Part D and potential changes to FDA safety programs that could give generic drug manufacturers easier access to REMS-protected drugs.


Congress may have only a couple of weeks to tackle thorny budget and immigration issues that already have led to one government shutdown this fiscal year, but medical device manufacturers and insurers are breathing a sigh of relief.

The budget agreement that reopened the government last week included a two-year delay of the "Cadillac" tax on high-cost health insurance plans and the 2.3 percent excise tax on the domestic sales of most medical technology. Both taxes were included in the ACA, as was a separate insurance provider fee, which the budget deal delayed for one year.

The Joint Committee on Taxation, which is Congress' official tax forecasters, said pushing back the Cadillac tax will lower government revenue by $14.7 billion. Suspending the medical device tax will reduce revenue $3.7 billion, and delaying the insurer's fee will reduce revenue by $12.7 billion.


FDA Commissioner Scott Gottlieb will headline a House hearing Tuesday examining the agency's implementation of a law passed after a 2012 outbreak caused by contaminated steroid injections that killed 64 people and injured hundreds of others nationwide.

The House Energy and Commerce Health Subcommittee hearing is expected to consider a series of issues, including to what degree the Drug Quality and Security Act permits different pharmacy compounders to create patient-specific prescriptions as well as to compound for so-called office use.

Other witnesses scheduled to testify Tuesday include representatives from pharmacy compounders, the American Academy of Dermatology and Pew Charitable Trusts. Also scheduled to testify is a patient who was harmed in the 2012 outbreak caused by the New England Compounding Center, which shipped more than 17,000 vials of the contaminated steroid medication.

The House last fall defeated an attempt to block the FDA from finalizing a congressionally mandated but long-delayed draft memorandum of understanding on the interstate sale of compounded drugs. That issue pitted 503A compounding pharmacies against 503B outsourcing facilities, with each group known for a section of the 2013 law.


Alex Azar is scheduled to be sworn in today after the Senate last week voted 55-43, mostly along party lines, to confirm him as the next HHS secretary.

Every Republican except Sen. Rand Paul (R-Ky.) voted for Azar. Democrats voting for Azar were Sens. Thomas Carper (D-Del.), Chris Coons (D-Del.), Joe Donnelly (D-Ind.), Heidi Heitkamp (D-N.D.), Doug Jones (D-Ala.), Joe Manchin (D-W.Va.) and Angus King (I-Maine).

Azar knows his way around the sprawling HHS headquarters on Independence Avenue at the foot of Capitol Hill. He previously served as HHS deputy secretary and general counsel during the Bush administration.


Long critical of the Health Resources and Services Administration's oversight of the 340B prescription drug program, Senate Finance Committee Chairman Orrin Hatch (R-Utah) proposed charging CMS with supervision of the program.

Hatch raised the issue in a letter last week to incoming HHS Secretary Alex Azar. HRSA lacks the necessary regulatory authority to effectively oversee the 340B program, and the agency has failed to finalize regulations in areas where it does have authority, the senator wrote.

Separately, bipartisan legislation in the House and Senate would roll back a CMS rule released last year that will cost $1.6 billion for hospitals participating in the 340B program. The rule, which went into effect this month, reduces hospital discounts for physician-administered drugs by nearly 30 percent.

But other lawmakers say they have been concerned by the growth of the 340B program and the lack of HRSA oversight. The House Energy and Commerce Committee earlier this month released an 80-page report on the 340B program with recommended changes. Committee leaders say they will seek to advance their proposals with a series of bills in the coming weeks.


New bipartisan legislation in the House aims to improve Medicare beneficiaries' access to prescription drugs by allowing Part D plans to approve electronic prior authorization coverage requests.

Rep. David Schweikert (R-Ariz.) said commercial insurers are increasingly using electronic prior authorization, and several states have established rules too. He said federal legislation would help standardize electronic prior authorizations in the Medicare program.

Schweikert serves on the Ways and Means Committee, which has jurisdiction over CMS and provider reimbursement policy. Other lawmakers backing the bill include Reps. Bill Johnson (R-Ohio), Ben Ray Lujan (D-N.M.) and Mike Thompson (D-Calif.).

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