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October 14, 2022

Federal Legislative Update

Last Updated: October 14, 2022

OVERVIEW

November 8 is just weeks away and all the focus is on some key House and Senate races that will determine who controls the chambers in 2023. While most presume the House will flip to Republican control, the Senate is still a question mark. Before Congress recessed for the final stretch of the campaign cycle, it did pass a Continuing Resolution to keep the government running until December 14. It also passed the much-anticipated reauthorization of the SBIR program that funds grants for small business innovation, the FDA user fees reauthorization legislation, and what was considered a surprise bill called the Inflation Reduction Act that covered items ranging from climate change to drug pricing to tax policy. When they return on November 14, they will need to develop an omnibus appropriations bill as well as a compromise ARPA-H authorization bill, Cures 2.0, and the National Defense Authorization Act (NDAA), among others.

Meanwhile, our little company has found ways to celebrate our 15th anniversary, including hosting the October 19 Health Tech Happy Hour in Cleveland, the November 1 Ohio Women in Government Happy Hour in Cleveland, and the November 10 Happy Hour in Columbus. We will sponsor the November 1 City Club event with Liz Cheney and Judy Woodruff in Cleveland and have launched our 3rd Annual Shauna M. Sorrells Grants Program for small nonprofits - yes, you can still apply right up to midnight October 24!

WHAT'S NEXT?

Elections!

Everyone is focused on the November 8 elections. Key states to watch that will determine which party controls the Senate include:

AZ, FL, GA, NV, NC, OH, PA, WI

Many factors are shaping how people will vote: inflation and the economy top the list, but some have not forgotten the Supreme Court Dobbs decision that overturned Roe v. Wade with unprecedented rates of women registering to vote in key states, such as FL, NC, OH and PA. Most predict the House to flip to Republican control but differ on how many seats will flip. The ad spending alone on the Senate elections is approaching $1 billion around the country:

$444 million for the Democrats

Candidate: $184 million

Issue Group: $257 million

Coordinated: $3 million

 

$420 million for the Republicans

Candidate: $61 million

Issue Group: $342 million

Coordinated: $17 million

 

Capitol Hill

The FY2023 Appropriations process stopped once the new fiscal year began on October 1. Now the plan is to craft an omnibus package after the November elections. This package is likely to include more than the 12 annual appropriations bills, but also authorizations that never hit the floor for a vote but both chambers want to get done this year. This could include additional COVID funding, ARPA-H authorization, Cures 2.0, the VALID Act regulating diagnostics, pandemic response funding, and reauthorization of key statutes, such as Temporary Assistance for Needy Families, Maternal, Infant, and Early Childhood Home Visiting grants, and Department of Agriculture livestock price reporting program. The NDAA is expected to pass the Senate in November as a separate bill since it already passed the House, then move quickly to Conference Committee to pass a final bill in both chambers and send it onto President Biden in December.

BUDGET & APPROPRIATIONS

Continuing Resolution & Omnibus Package

On September 31, President Biden signed into law a Continuing Resolution. A section by section summary is here. As staff work on putting together the omnibus framework this month that Members of Congress will negotiate and finalize at the end of the year, some key health-related proposals that may be added include:

 

  • FDA Riders: House Energy and Commerce Chair Frank Pallone (D-N.J.) wants to give the FDA the power to request post-market studies of fast-tracked drugs, among other priorities.
  • Pandemic Preparedness: Congress is looking into a major overhaul at the CDC, including requiring Senate confirmation for the next CDC director, a move that would give Congress more control over the agency. This would follow a CDC restructuring that was launched just a couple months ago.
  • Mental Health: Top Senate Finance Committee members want more mental health professionals receiving training and an expansion of Medicaid and Medicare offerings of mental health services. Maternal mental health conditions are now the most common complications of pregnancy and childbirth, affecting 1 in 5 women. Among those affected, 75% go untreated. While women of color are more likely to experience these conditions, they also are less likely to seek help. These statistics are raising alarm bells for some lawmakers as the U.S. already has a troubling maternal mortality and morbidity rate.
  • Medicare: Two lawmakers want to continue bonus Medicare payments enacted during the pandemic and avert a looming 4% cut to the payments. Also, the average premiums for private Medicare managed care plans will fall to $18 per month in 2023, a drop of nearly 8% from the 2022 average premium of $19.52, according to the Biden administration.

Health

COVID:

The Covid-19 public health emergency (PHE) declaration granting the Biden administration emergency powers to respond to the pandemic will get a 90-day extension. The designation was set to expire October 13. Health and Human Services Secretary Xavier Becerra signed the latest extension of the so-called PHE designation. First launched in 2020 and renewed since then in 90-day increments, the designation has eased the way for the administration to help more Americans obtain government health insurance and rapidly approve drugs and treatment for public use.

 

FDA User Fees Legislation:

The Continuing Resolution includes reauthorization of FDA’s prescription and generic drug, biosimilar and medical device user fee programs for another five years, which means the agency will not have to lay off user-fee funded staff. The bill lacks many riders the agency was seeking, such as the long-anticipated Verifying Accurate Leading-edge IVCT Development (VALID) Act, which would give FDA additional authorities to regulate in vitro diagnostics (IVD), including laboratory-developed tests (LDTs). The stripped-down version of the user fee reauthorization bill also does not reform FDA’s accelerated approval program or its oversight of cosmetics and dietary supplements or its control plans for artificial intelligence/machine learning (AI/ML) medical devices, including no updates for cybersecurity guidance.

 

A bill summary can be found here.

Economic Development

On September 30, President Biden signed into law S. 4900, the “SBIR and STTR Extension Act of 2022,” which authorizes the Small Business Innovation Research (SBIR), Small Business Technology Transfer (STTR), and six related pilot programs through Fiscal Year 2025. It also requires agencies with an SBIR or STTR program to establish a due diligence program to assess the potential risk posed by program applicants’ foreign ties; requires certain departments and agencies to report on national security risks within their SBIR/STTR programs; and establishes increased minimum performance standards for firms that have won a certain number of awards during a specified period of time.

 

The bill also includes provisions to strengthen federal research security by instituting reviews to prevents malign foreign countries from stealing technologies developed through the programs. In addition, this reauthorization will establish higher benchmarks for more experienced firms to commercialize their technologies. Most importantly, this legislation will provide small businesses and federal agencies with the certainty they need to continue their groundbreaking work.

 

Full section by section summary is here.

Defense

The House of Representatives passed H.R. 7900, the National Defense Authorization Act (NDAA) by a vote of 329-101 on July 14. The Senate started to consider S. 4543, their version of the NDAA on October 11 but will not complete consideration until the week of November 14.  Some highlights include:

House NDAA:

Full summary of the bill can be found here but highlights include:

  • Supports a 4.6% pay raise for service members and civilians, in addition to supporting inflation bonuses for service members and civilians earning less than $45,000/year; and codifies a $15 minimum wage for workers on federal service and construction contracts.
  • Authorizes $275 million for additional investments in test and evaluation capabilities to meet the demands of next-generation capabilities in hypersonics, electronic warfare, directed energy, artificial intelligence, and software.
  • Directs an independent review of the Office of the Chief Information Officer to ensure that the CIO has an adequate cyber security workforce of size and expertise to ensure the successful management of the CIO’s statutorily defined responsibilities over electromagnetic spectrum, precision navigation and timing (PNT), architecture and programs related to information technology, networking, information assurance, cybersecurity, and cyber capabilities of the DoD.
  • Extends the Small Business Innovation Research Program until 2024.
  • Eliminates TRICARE copays for contraception for one year and increases access to infertility services.

 

Senate NDAA:

Full summary of the bill can be found here but highlights include:

  • Authorizes $817 billion for the DOD, $29 billion for national security programs within the Department of Energy (DOE), and a 4.6 percent pay raise to service members, and increases funding for support, equipment, and training they need.
  • Increases the topline defense authorization level by $45 billion to address the effects of global inflation and accelerate implementation of the National Defense Strategy. This includes authorizing additional security assistance to Ukraine; accelerating the production of certain munitions; providing additional resources for service and combatant command requirements; and authorizing funding for additional military construction projects and facilities maintenance.
  • Extends and modifies the Ukraine Security Assistance Initiative (USAI) and authorizes $800 million in fiscal year 2023 to provide security assistance to Ukraine via this authority.
  • Authorizes $1 billion for the National Defense Stockpile to acquire strategic and critical minerals currently in short supply.
  • Authorizes significant funding increases for game-changing technologies like microelectronics, hypersonic weapons, and low-cost unmanned aircraft.
  • Authorizes significant funding increases to support U.S. Cyber Command’s (CYBERCOM) Hunt Forward Operations and artificial intelligence capabilities.