United States: Capitol Hill Healthcare Update - September 23, 2019

Last Updated: September 27 2019
Article by Christian B. Jones

PELOSI INTRODUCES DRUG PRICING BILL WHILE TRUMP PUSHES SENATE VERSION

House Democrats introduced legislation last week to lower prescription drug prices – including allowing Medicare to negotiate prices with manufacturers – and set an aggressive timeline to approve the bill by Halloween.

The legislation would allow the government to negotiate prices annually for at least 25 of the highest-cost brand-name drugs that lack generic or biosimilar competition in the Medicare Part D and Part B programs. It also would require manufacturers to cover 30% of the costs of Part D catastrophic coverage, which Medicare currently covers.

Republicans criticized the proposal, focusing on the behind-closed-doors process by which Democratic leaders developed the legislation. But Republicans lack the votes to stop it – or even amend it – in the House, where rules give majority Democrats the power to advance their bill.

Pelosi said three committees will each vote on portions of the bill, and then leaders will combine them into a final package, likely late next month. The Energy and Commerce Health Subcommittee will hold the first hearing Wednesday on the bill. The panel also will review three other Democratic drug pricing measures.

Meanwhile, the Trump administration has been pushing for separate drug pricing legislation, which won Senate Finance Committee approval in July. But that bill, by committee Chairman Chuck Grassley, R-Iowa, bitterly divided committee Republicans. Some of those committee members – including Sens. John Cornyn, R-Texas; Mike Crapo, R-Idaho; and Rob Portman, R-Ohio – are separately working on provisions that could unify Republican support for a Grassley-backed package.

The Trump White House is actively backing Grassley's bill mostly because it sees it as the most likely to win Senate approval. That's key to the White House's strategy: If both chambers can pass prescription drug bills, the administration believes it can work with congressional leaders to develop final legislation that could get Trump's signature.

As the House moves to pass its bill, Trump is expected to increase pressure on Senate Republicans. Majority Leader Mitch McConnell, R-Ky., has thus far refused to allow a floor vote on drug pricing legislation that divides his party and unites Democrats. Trump aides believe the political dynamic could change if the president engages publicly, especially if he targets Senate Republicans to act.

Still, that effort to get 60 Senate votes would require a delicate policy and political balance to secure a plurality of Republicans and Democrats needed to advance the bill – and by no means is it guaranteed to succeed.

GOVERNMENT SHUTDOWN UNLIKELY AS SENATE READIES VOTE ON STOPGAP SPENDING

The Senate is expected to give final congressional approval this week to a stopgap budget bill that would fund the government until nearly Thanksgiving, buying more time for lawmakers to resolve thorny political questions and approve fiscal 2020 spending.

The House last week approved a continuing resolution to fund the government through Nov. 21. The 301-123 vote provided a strong show of support for the Senate, which is similarly expected to easily approve the bill this week.

The resolution also extended several federal health programs set to expire next week, including funding for community health centers, teaching hospitals and Type 1 diabetes research. It delays payment cuts to safety-net hospitals and reauthorizes the Patient-Centered Outcomes Research.

SENATE STRUGGLES WITH BUDGET FOR HEALTH PROGRAMS

Despite this summer's deal on overall budget numbers, lawmakers writing individual spending bills – including those that fund major health agencies and programs – have been bogged down by partisan fights over funding levels, abortion and President Donald Trump's border wall.

Legislation funding the Health and Human Services Department stalled earlier this month amid those disagreements. The Senate Appropriations Committee has not rescheduled its markup.

The committee last week did manage to approve several bills, including boosting funding by $80 million for the Food and Drug Administration (FDA), which is funded partially by congressional appropriations and partially by industry user fees.

The Senate bill includes $3.1 billion in congressionally approved FDA funding; adding user fees, the agency's overall budget would be nearly $5.8 billion.

SENATE TASK FORCE STALLS ON HEALTH TAX BREAKS

The Senate Finance Committee last week failed to reach consensus on a way forward for expiring health tax extenders, including taxes on medical device manufacturers and insurers.

The committee in May established five task forces to examine sector-specific temporary tax provisions that expired, will soon expire or will soon go back into effect. The task force examining health-sector taxes – led by Sens. Pat Toomey, R-Pa., and Bob Casey, D-Pa. – hoped to recommend bipartisan permanent solutions.

But the senators couldn't agree on whether to extend the health provisions or allow them to expire, so they made no recommendations. The Toomey-Casey panel reviewed tax credits for health coverage, paid family and medical leave; deductions for medical expenses; and excises taxes on the black lung disability trust fund, the medical device industry and insurers.

Meanwhile, House Speaker Nancy Pelosi, D-Calif., speaking at a fundraising event last week, threw cold water on prospects that she would support further suspending the 2.3% tax on medical devices, which will go back into effect Jan. 1 unless Congress acts before then. She said the device industry agreed to the $20 billion annual tax as part of the Affordable Care Act – a position hotly disputed by device companies.

Still, Pelosi said she "likes to do trades," holding out the prospect that a year-end budget and tax package could include relief for the device industry as well as relief from the tax on high-cost health plans, a priority for Democrats.

The House voted 419-6 in July to repeal the so-called Cadillac tax, which would impose a 40% surcharge on employer-provided plans costing more than $11,200 for individuals and $30,100 for families. The tax is scheduled to take effect in 2022 after already being delayed twice by Congress.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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