Health

The latest news and legislative activity affecting healthcare and bioscience

July 25, 2019
Legislative updates

Overview:

House Democrats pushed through a comprehensive package of drug pricing and Obamacare-bolstering legislation (H.R. 987) during the first half of the year, but with the Affordable Care Act provisions included in the package, the bill died in the Senate. Senators are working on drug pricing legislation with markups happening today. Meanwhile, some Democrats are pushing to consider the bipartisan drug pricing provisions separately so they can work with the Senate to enact them. All of this is stalled until the fall.

Surprise Billing:

There will be no Senate surprise billing legislation before the recess. But both leaders of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Chairman Lamar Alexander (R-TN) and top Democrat Patty Murray (D-WA), are committed to moving legislation this fall.

Drug Pricing:

A bipartisan bill is on the docket this morning in the Senate Finance Committee. It would cap, for the first time ever, how much drugmakers could increase the prices of medications in the Medicare program. If a price rises by more than the inflation rate, its manufacturer would have to pay back the difference to the federal government in the form of a rebate – theoretically this would drive down prices for commercial health plans and consumers.

Cancer and 9/11 Responders:

After a lot of negative media attention directed at Congress and specifically Senate Majority Leader Mitch McConnell (R-KY) and a poignant House hearing, thanks to John Stewart and some courageous first responders, the Senate finally passed the 9/11 Victims' Fund. It would extend through at least FY2092 the September 11 victims’ fund that pays the firefighters, police officers and other emergency workers who were hurt and families of those killed as the result of the 2001 terrorist attacks or the cleanup operations. In February, the “special master” of the fund determined that it contained insufficient funding to pay all outstanding and projected claims, many of which involve cancer. Payments to victims could have been cut by at least 50% and as much as 70% if the fund wasn’t replenished in time, but now that the bill has passed both chambers, President Trump is signing it into law.

This week the House passed:

  • Children’s Emergency Care: The HHS’s Emergency Medical Services for Children (EMSC) Program would be reauthorized through FY2024. The program is designed to address the needs of children in prehospital and hospital emergency medical systems. The House Energy and Commerce Committee approved H.R. 776 by voice vote on July 17.
  • Respite Care: The HHS’s Lifespan Respite Care Program would be reauthorized through fiscal 2024 under H.R. 2035. The program provides aid to family members who act as caregivers to disabled relatives. The Energy and Commerce Committee approved the measure unanimously last week.
  • Autism Programs: Federal research, education, and intervention programs for individuals with autism spectrum disorder would be reauthorized for five years under H.R. 1058. The HHS programs are currently authorized through FY2019. Energy and Commerce approved the bill unanimously last week.
  • Newborn Screenings: Newborn screening programs for genetic disorders would be reauthorized for five years by H.R. 2507. The HHS programs are currently authorized through FY2019. Energy and Commerce approved the bill unanimously last week.
  • Federal Opioid Research: The National Science Foundation, in consultation with the NIH, would have to support competitive research grants on opioid addiction under H.R. 3153. The House Science, Space, and Technology Committee approved the bill unanimously on June 20.

Insulin Pricing:

Senator Jeanne Shaheen (D-NH), joined by Susan Collins (R-ME), Tom Carper (D-DE) and Kevin Cramer (R-ND), just introduced the Insulin Price Reduction Act. It would create incentives for a reduction in the list price of insulin with a new insulin pricing model restricting the use of rebates for any product for which the manufacturer reduces the list price back to a level no higher than the price of the product in 2006. The rebate restrictions would apply in Medicare Part D and the private insurance market.

Medicaid Grants:

Reps. Cheri Bustos (D-IL) and Cathy McMorris Rodgers (R-WA) joined by other lawmakers introduced the Social Determinants Accelerator Act to provide $25 million for states to address high-need Medicaid patients. The bill would give planning and technical assistance grants to states trying to look broadly at social determinants for health for high-cost Medicaid beneficiaries – these include helping people access health care, housing, transportation and other benefits.

Biotechnology Innovation:

On July 10, 2019, Senators Chris Coons (D-DE) and Tom Cotton (R-AR) and Reps. Steve Stivers (R-OH) and Bill Foster (D-IL) reintroduced the STRONGER (Support Technology & Research for Our Nation’s Growth and Economic Resilience) Patents Act. This legislation, an improvement on legislation introduced last year under the same name, would reform the inter partes post-grant review process, ensure all fees paid to the Patent and Trademark Office (PTO) are used for their intended purposes, and protect patent holders and small businesses from predatory demand letters. The Biotechnology Innovation Organization (BIO) supports this bill.

July 11, 2019
Legislative updates

The health committees were busy right before the July recess. On June 26, the Senate Health, Education, Labor and Pensions Committee marked up three bills: S. 1199, the Poison Center Network Enhancement Act; S. 1173, the Emergency Medical Services for Children Program Reauthorization Act; and S.1895, a measure from HELP Chairman Lamar Alexander (R-Tenn.) and ranking member Patty Murray (D-Wash.) to lower health care costs. Meanwhile in the House also on June 26, the Ways and Means Committee marked up five bills: H.R. 3417, The Beneficiary Education Tools, Telehealth, and Extenders Reauthorization Act; H.R. 3429, The HEARTS and Rural Relief Act; the Improving Chronic Care Management Act; H.R. 3414, The Opioid Workforce Act; and the Protecting Access to Information for Effective and Necessary Treatment (PATIENTS) Act.

Even the Judiciary Committee has been working on health issues. On June 27, the Senate Judiciary Committee marked up four bills: S. 1227 to require the Federal Trade Commission to study the role of intermediaries in the pharmaceutical supply chain and provide Congress with appropriate policy recommendations; S. 440 to prevent a patent owner from asserting sovereign immunity as a defense in certain actions before the U.S. Patent and Trademark Office; S. 1224 to enable the FTC to deter the filing of “sham” citizen petitions as an attempt to interfere with approval of a competing generic drug or biosimilar and facilitate the review of petitions filed to raise legitimate public health concerns; and S. 1416 to prohibit anticompetitive behaviors by drug product manufacturers.

Drug Pricing
Senate HELP Chairman Lamar Alexander (R-TN) led passage of the Lower Health Care Costs Act right before the July recess. It included Senator Tammy Baldwin’s (D-WI) bipartisan FAIR Drug Pricing Act that would require drugmakers to notify HHS of price hikes above 10 percent and justify the increases while disclosing R&D costs. A similar bipartisan bill is in the House, the SPIKE Act or H.R. 2069, which has raised Republican concerns. SPIKE isn’t quite the same as FAIR – it would require manufacturers to justify price increases that are 10 percent or $10,000 over one year, 25 percent or $25,000 over three years, or products launched at a price of $26,000 or more. While it breezed through the House Ways & Means Committee in April, SPIKE later hit a snag with Energy and Commerce Republicans who argued that the launch price benchmark in particular could deal a blow to small biotechs and medicines for rare diseases (which often are pricier than others).

Also, the Senate Finance Committee is considering several changes to Medicare, including ending the financial incentives doctors receive for administering pricier drugs under Medicare Part B and capping the out-of-pocket costs for people covered under Medicare Part D, the public health insurance program’s prescription drug benefit. Chairman Chuck Grassley (R-IA) and Senators Bill Cassidy (R-LA) and Tim Scott (R-SC) want to help states finance expensive gene therapies by permitting them to pay for them over years and creating certain quality metrics for the medicines. Capping costs for the elderly in Medicare Part D is also proving tricky as lawmakers debate who should foot the bill for billions of dollars in annual drug costs: whether to split it evenly between the government, insurers and drugmakers, or have one of those parties take on the lion’s share. If drugmakers were asked to cover half the costs of a cap—putting more than $13 billion of new costs onto the pharmaceutical industry in the first year alone and more than $200 billion in costs over 10 years—then the government and Medicare beneficiaries could save more than $200 billion over 10 years, according to a recent study.

FDA Policing the Drug Supply
Lawmakers from both parties are seeking more information about regulators’ capacity to protect the U.S. drug supply, as foreign-made generic blood-pressure pills tainted with probable carcinogens continue to be recalled. House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) and Rep. Greg Walden (R-OR) want details on the FDA’s ability to adequately inspect foreign and domestic pharmaceutical manufacturing facilities. The lawmakers are seeking specific information regarding a recall of the drug valsartan that was manufactured by Chinese firm Zhejiang Huahai Pharmaceutical Co. Ltd. They also want more details about a dispute between senior FDA staff and an inspector who visited one of the company’s plants where medication contaminated with the probable human carcinogen NDMA was first detected. The FDA began a recall of valsartan made by Zhejiang Huahai in July 2018. The company’s contaminated valsartan was sold to major drugmakers and used as an ingredient in a number of popular cardiovascular therapies. Since then, the FDA has found that other pharmaceutical companies, including Mylan NV and India’s Hetero Labs Ltd., made and sold contaminated blood-pressure drugs. The recalls have sparked a wave of lawsuits.

Medicaid Block Grants
Placing spending limits on Medicaid is illegal, a top committee Democrat said in a letter to HHS Secretary Alex Azar demanding clarity on the Trump administration’s plans. The June 27 letter from House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) comes after reports the administration might approve waivers letting some states receive their federal Medicaid money in block grants. That would place a limit on the federal money states can deploy for the low-income health-care program and give states more autonomy to determine eligibility. Medicaid has traditionally operated with an open-ended funding system, where the federal government matches different percentages of what states pay. These percentages are based off state income levels, and there is no limit on how much the federal government will match.

Opioid Crisis Fuels Medicaid Pilots
Two more states received permission from the Trump administration to use Medicaid money to fight mental and physical health problems associated with the opioid crisis. Almost half of the states have been approved for special waivers that provide federal Medicaid matching funds for new or experimental substance abuse programs, including outreach of treatment in different types of facilities. Minnesota and Nebraska are the 23rd and 24th states to be given the go-ahead from the Centers for Medicare and Medicaid Services. 

Health Funding
The House Appropriations Committee passed the Labor-HHS bill that totals $189.9 billion on May 8, which contrasts the 12% cut proposed in President Trump’s FY2020 budget. The bill provides $99 billion for the Department of Health and Human Services (HHS) and includes significant funding increases since FY2019, i.e. NCI’s funding is increased from $5.7 billion to $6.2 billion and NCATS’ funding is increased from $806 million to $845 million. It also launches a new multi-year public health surveillance initiative and funds cybersecurity efforts. However, it cuts CMS by $3 billion from $276 billion to $273 billion in FY2020. Chairwoman DeLauro (D-CT) said she was able to accommodate 90% of the requests made by members in crafting the bill and accompanying report. G2G wrote up a summary and distributed it a few weeks, which is available here. The bill will go to the floor in June and the Senate is finalizing their version now and is expected to introduce it in June and conference negotiations should occur August-September. Details include:

Discretionary funding:
• $99.4 billion for the HHS, $8.88 billion more than fiscal 2019 and $21.3 billion more than requested.
• $75.9 billion for the Education Department, $4.48 billion more than fiscal 2019 and $11.9 billion more than requested.
• $13.3 billion for the Labor Department, $1.2 billion more than fiscal 2019 and $2.4 billion more than requested.

HHS funding would include the following for various programs:
• $11.6 billion for Head Start, a $1.5 billion increase from fiscal 2019. 
• $7.68 billion for the Child Care and Development Block Grant, a $2.4 billion increase. 
• $5.68 billion for community health centers, which would include a $50 million increase in discretionary funding.
• $3.84 billion for substance abuse treatment, including $1.5 billion for State Opioid Response grants, at SAMHSA; at least $500 million for the NIH’s Helping to End Addiction Long-Term Initiative; and $475.6 million for CDC Opioid Overdose Prevention and Surveillance. 
• $3.01 billion for the Public Health and Social Services Emergency Fund, a $377 million increase.
• $2.44 billion for the Ryan White HIV/AIDS program, a $116.4 million increase.
• $2.39 billion for Alzheimer’s disease research, $500 million for a precision medicine initiative, $411 million for the BRAIN Initiative, and $195 million for the Cancer Moonshot Initiative at the NIH.

Drug Samples for Generic Development
Recently, two House committees approved H.R. 965, the CREATES Act, which would allow generic-drug developers to sue brand-name drug makers for not selling them samples needed for testing during the FDA approval process. It also would give the FDA more flexibility to allow generic companies to use separate safety protocols than those in place for the branded drug. The generic drug maker would have to prove that the branded drug maker hasn’t delivered sufficient quantities generally within 31 days of a request. Generic drug makers could request FDA authorization to obtain a sample of a branded drug that’s subject to an FDA safety protocol, called a risk evaluation and mitigation strategy (REMS) with “elements to assure safe use” (ETASU). Some drug companies have withheld samples from generic drug makers due to being subject to such protocols. The measure would also create an affirmative defense if the branded drug company offered to sell sufficient quantities of the product on reasonable terms and the generic developer didn’t accept the offer in a specified time frame. Products not subject to a safety protocol would have to be offered within 14 days of receiving a request and accepted within 7 days. Those subject to safety protocols would have to be offered within 20 days and accepted within 10 days. The Congressional Budget Office estimated the bill would reduce the federal deficit by $3.9 billion from fiscal 2019 through 2029 by allowing earlier entry of lower-priced generic drugs, which would reduce federal spending on prescription drugs and subsidies for health insurance.

House Panel Releases Surprise Medical Bill Plan
Following the Senate HELP Committee, the House Energy and Commerce Committee recently released a bipartisan plan to protect patients from receiving pricey and unexpected medical bills, offering the first fleshed-out blueprint in the chamber to address the high-profile issue. The bill would bar providers from billing patients for the unpaid balance of bills for emergency services. Patients would pay as if the hospital used was in their health plan's network. It would also require patients be notified and give their consent before scheduled care is delivered by an out-of-network provider. Patients not told in advance would be protected from hefty bills. States would still be able to set their own payment standards for health plans they regulate. The draft bill also would provide $50 million in grants for states to create all-payer claims databases.

Interchangeable Biosimilars
Pharmacists are a step closer to seamlessly switching between a biologic drug and a cheaper alternative called a biosimilar thanks to the final industry advice for drug makers the FDA released recently. Biologic drugs are some of the most expensive products on the market due to manufacturing complexity, as they’re made from living cells, and treat serious conditions like cancer. So far, there are no biosimilars available in the U.S. that are considered interchangeable. But this FDA advice could help change that and consequently could increase biosimilar utilization.

Diabetes Funding
Reps. Diana DeGette (D-CO) and Tom Reed (R-NY) introduced H.R. 2668, Special Diabetes Program Reauthorization Act to continue funding a key federal diabetes research program for an additional five years and increase its annual funding from $150 million to $200 million a year. The Special Diabetes Program for Type 1 Diabetes is a decades-old federal program that’s currently providing researchers at the NIH $150 million a year to study Type 1 diabetes. Significant debate has ensued on the cost of insulin within health committees of jurisdiction over the past couple of months and furthering research on diabetes remains a bipartisan priority.

Patent Legislation
The Second Look at Drug Patents Act, which was just introduced by John Cornyn (R-TX) and Patty Murray (D-WA), would require the U.S. Patent and Trademark Office to initiate a process to reexamine the validity of patents over 30 days before they are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”) because some manufacturers use “patent evergreening” by applying for follow-on patents for disingenuous “improvements” to their original drugs to extend their period of market exclusivity. Once listed in the Orange Book it has the legal effect of blocking generic entry. The Act would require all new patents be submitted to the Official Gazette of the Patent and Trademark Office (“Gazette”) within 30 days of approval, which enables soliciting additional information about the strength of those patents and invite patent challenges. Then any patent included in the Gazette would be listed in the Orange Book on a provisional basis unless the Patent Trial Appeal Board confirms the patent to be patentable or if the patent is not challenged within a specific timeframe. The Second Look at Drug Patents Act would provide a way to prevent disingenuous “improvements” that are insubstantial, e.g. mere dosage changes to help bring generic drugs to market in a timelier fashion.

May 31, 2019
Legislative updates

Health Funding

The House Appropriations Committee passed the Labor-HHS bill that totals $189.9 billion on May 8, which contrasts the 12% cut proposed in President Trump’s FY2020 budget. The bill provides $99 billion for the Department of Health and Human Services (HHS) and includes significant funding increases since FY2019, i.e. NCI’s funding is increased from $5.7 billion to $6.2 billion and NCATS’ funding is increased from $806 million to $845 million. It also launches a new multi-year public health surveillance initiative and funds cybersecurity efforts. However, it cuts CMS by $3 billion from $276 billion to $273 billion in FY2020. Chairwoman DeLauro (D-CT) said she was able to accommodate 90% of the requests made by members in crafting the bill and accompanying report. G2G wrote up a summary and distributed it a few weeks, which is available here. The bill will go to the floor in June and the Senate is finalizing their version now and is expected to introduce it in June and conference negotiations should occur August-September. Details include:

Discretionary funding:

  • $99.4 billion for the HHS, $8.88 billion more than fiscal 2019 and $21.3 billion more than requested.
  • $75.9 billion for the Education Department, $4.48 billion more than fiscal 2019 and $11.9 billion more than requested.
  • $13.3 billion for the Labor Department, $1.2 billion more than fiscal 2019 and $2.4 billion more than requested.

HHS funding would include the following for various programs:

  • $11.6 billion for Head Start, a $1.5 billion increase from fiscal 2019.
  • $7.68 billion for the Child Care and Development Block Grant, a $2.4 billion increase.
  • $5.68 billion for community health centers, which would include a $50 million increase in discretionary funding.
  • $3.84 billion for substance abuse treatment, including $1.5 billion for State Opioid Response grants, at SAMHSA; at least $500 million for the NIH’s Helping to End Addiction Long-Term Initiative; and $475.6 million for CDC Opioid Overdose Prevention and Surveillance.
  • $3.01 billion for the Public Health and Social Services Emergency Fund, a $377 million increase.
  • $2.44 billion for the Ryan White HIV/AIDS program, a $116.4 million increase.
  • $2.39 billion for Alzheimer’s disease research, $500 million for a precision medicine initiative, $411 million for the BRAIN Initiative, and $195 million for the Cancer Moonshot Initiative at the NIH.

Medical Innovation

On May 23, HHS announced an invitation for comment on how to accelerate bringing medicines and treatments into patients’ hands faster under ReImagine HHS: Accelerate Clinical Innovation Initiative. HHS is seeking participation for meetings on June 20 and 21 and welcomes written comments due June 12 at http://src.bna.com/IsA from all interested parties, including, but not limited to, patients, physicians, researchers, medical product developers, commercial health insurance plan sponsors and carriers, private investors, and the community at large. In 2011, NIH created a center to get new treatments on the market faster as it takes an average of 17 years to translate medical discoveries into patient care, according to a 2011 study.

Drug-Pricing Transparency Bills

Republicans are warning House Democratic leaders they’ll sink legislation that would address rising drug prices if they pair it with measures to bolster Obamacare. However, House leaders plan a vote on H.R. 987 to do just that. It would combine seven bills, that together, are designed to bring more low-cost generic drugs to the market, ban short-term insurance policies Democrats deride as “junk” plans, and restore funds for Obamacare programs cut by the Trump administration. The drug-pricing bills bundled into the package have support from members of both parties, but the ones bolstering the Affordable Care Act are generally backed only by Democrats. The White House has issued a veto threat.

Medicare Part D plays a central role in the drug pricing debate. On May 23, the House Energy & Commerce and Ways & Means committees released a draft, bipartisan bill to cap seniors’ drug costs in Medicare Part D and shift most of the program’s catastrophic drug costs from the government to insurers. It aligns with the approach being considered by Senate Finance Committee, but contrasts the Medicare-negotiation approach that Speaker Pelosi was trying to sell to the White House. These House committees are requesting feedback on the draft bill now. Specifically, it would increase insurers’ share of their enrollees’ Part D catastrophic drug spending from 15% to 80% over four years. (Currently, once seniors’ out-of-pocket costs hit $5,100, they enter the catastrophic coverage stage. At that point, they pay 5% of their drug costs, insurers pay 15% of the cost and Medicare pays 80%.) The bill would also gradually change the percentages: seniors 0%, Medicare 20% and insurers 80%. Lawmakers on both sides of the aisle have expressed interest in capping out-of-pocket costs and the White House has also backed the idea, most recently in Trump's fiscal 2020 budget proposal. The Trump proposal to cap expenses would also move 80% of liability to plans but do it over a 10-year period, which would cost an estimated $14 billion over a decade. Policy experts predict that shifting the burden to insurers would pressure them to choose lower-priced drugs in formularies and negotiate better deals with drug companies. The bill does not appear to shift drug makers' burden for covering drug costs though.

Drug Samples for Generic Development

Recently, two House committees approved (H.R. 965, the CREATES Act), which would allow generic-drug developers to sue brand-name drug makers for not selling them samples needed for testing during the FDA approval process. It also would give the FDA more flexibility to allow generic companies to use separate safety protocols than those in place for the branded drug. The generic drug maker would have to prove that the branded drug maker hasn’t delivered sufficient quantities generally within 31 days of a request. Generic drug makers could request FDA authorization to obtain a sample of a branded drug that’s subject to an FDA safety protocol, called a risk evaluation and mitigation strategy (REMS) with “elements to assure safe use” (ETASU). Some drug companies have withheld samples from generic drug makers due to being subject to such protocols. The measure would also create an affirmative defense if the branded drug company offered to sell sufficient quantities of the product on reasonable terms and the generic developer didn’t accept the offer in a specified time frame. Products not subject to a safety protocol would have to be offered within 14 days of receiving a request and accepted within 7 days. Those subject to safety protocols would have to be offered within 20 days and accepted within 10 days. The Congressional Budget Office estimated the bill would reduce the federal deficit by $3.9 billion from fiscal 2019 through 2029 by allowing earlier entry of lower-priced generic drugs, which would reduce federal spending on prescription drugs and subsidies for health insurance.

House Panel Releases Surprise Medical Bill Plan

House Energy & Commerce Committee recently released a bipartisan plan to protect patients from receiving pricey and unexpected medical bills, offering the first fleshed-out blueprint in the chamber to address the high-profile issue. The draft would bar providers from billing patients for the unpaid balance of bills for emergency services. Patients would pay as if the hospital used was in their health plan's network. It would also require patients be notified and give their consent before scheduled care is delivered by an out-of-network provider. Patients not told in advance would be protected from hefty bills. States would still be able to set their own payment standards for health plans they regulate. The draft bill also would provide $50 million in grants for states to create all-payer claims databases.

Interchangeable Biosimilars

Pharmacists are a step closer to seamlessly switching between a biologic drug and a cheaper alternative called a biosimilar thanks to the final industry advice for drug makers the FDA released recently. Biologic drugs are some of the most expensive products on the market due to manufacturing complexity, as they’re made from living cells, and treat serious conditions like cancer. So far, there are no biosimilars available in the U.S. that are considered interchangeable. But this FDA advice could help change that and consequently could increase biosimilar utilization.

Diabetes Funding

Reps. Diana DeGette (D-CO) and Tom Reed (R-NY) introduced bipartisan legislation (H.R. 2668, Special Diabetes Program Reauthorization Act) recently to continue funding a key federal diabetes research program for an additional five years and increase its annual funding from $150 million to $200 million a year. The Special Diabetes Program for Type 1 Diabetes is a decades-old federal program that’s currently providing researchers at the National Institutes of Health $150 million a year to study Type 1 diabetes. Significant debate has ensued on the cost of insulin within health committees of jurisdiction over the past couple of months and furthering research on diabetes remains a bipartisan priority.

Patent Legislation

The Second Look at Drug Patents Act, which was just introduced by John Cornyn (R-TX) and Patty Murray (D-WA), would require the U.S. Patent and Trademark Office to initiate a process to reexamine the validity of patents over 30 days before they are listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the “Orange Book”) because some manufacturers use “patent evergreening” by applying for follow-on patents for disingenuous “improvements” to their original drugs to extend their period of market exclusivity. Once listed in the Orange Book it has the legal effect of blocking generic entry. The Act would require all new patents be submitted to the Official Gazette of the Patent and Trademark Office (“Gazette”) within 30 days of approval, which enables soliciting additional information about the strength of those patents and invite patent challenges. Then any patent included in the Gazette would be listed in the Orange Book on a provisional basis unless the Patent Trial Appeal Board confirms the patent to be patentable or if the patent is not challenged within a specific timeframe. The Second Look at Drug Patents Act would provide a way to prevent disingenuous “improvements” that are insubstantial, e.g. mere dosage changes to help bring generic drugs to market in a timelier fashion.