Capitol Hill Healthcare Update

NEW SENATOR JOINS HEALTH COMMITTEE

Newly sworn-in Sen. Kelly Loeffler, R-Ga., is the newest member of the Senate Health, Education, Labor and Pensions Committee. Loeffler took the oath of office last week, replacing retired Sen. Johnny Isakson, R-Ga.

Committee Chairman Lamar Alexander, R-Tenn., praised Loeffler as having the background and skills to “immediately become an effective member of the committee.”

The committee’s jurisdiction includes public health, biomedical research and development including authorization and oversight of the Food and Drug Administration, aging, and individuals with disabilities.

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Capitol Hill Healthcare Update

SPRING DEADLINE DRIVES 2020 HEALTH POLICY AGENDA

Few policy issues consumed more political oxygen on Capitol Hill last year than prescription drug prices and surprise medical bills – but without significant legislative achievement on either.

But Congress is going to try again, setting up a spring deadline to force action on key healthcare provisions. Despite the new inflection point, lawmakers remain far apart on drug prices, though they are much closer to agreeing on legislation that would end surprise medical bills.

The budget legislation that Congress approved last month created a May 22 deadline when several popular health programs will expire. Congressional leaders intentionally set this date in the hopes that it would drive action on drug prices and surprise billing, and that legislation to extend the expiring programs will act as a vehicle for major health policy.

Yet despite lawmakers’ professed hopes to ultimately solve both issues this year, there is no evident path to do so amid sharp divisions on policy details.

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Capitol Hill Healthcare Update

ACA TAXES ON CHOPPING BLOCK IN YEAR-END BUDGET DEAL

Congressional leaders are poised to announce an agreement today that would permanently repeal the Affordable Care Act (ACA) taxes on medical device manufacturers, insurers and high-cost health plans as part of a spending package that would avoid a government shutdown later this week.

If the tax provisions are repealed, it would represent an enormous victory for the healthcare industry, which has been lobbying against the taxes since the ACA was enacted nearly a decade ago.

Congressional budget forecasters estimate the medical device tax would generate more than $20 billion over 10 years, while the so-called Cadillac tax on pricey health plans was expected to generate $200 billion. The tax on insurers was similarly projected to raise tens of billions of dollars annually.

Congress was not expected to offset the loss of revenue from those taxes.

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Capitol Hill Healthcare Update

YEAR-END LEGISLATIVE OVERDRIVE

This week is crunch time on a host of legislative priorities, and various health-related provisions hang in the balance.

Lawmakers and staff worked all weekend negotiating on legislation to fund the government beyond next Friday’s deadline, when current funding expires. As the only true must-pass legislative vehicle before the end of the year, it’s the last best hope for the policy priorities of many stakeholders, including the medical device industry, which is seeking relief from the Affordable Care Act device tax before it comes back into effect Jan. 1.

With spending negotiations now at the leadership level, Speaker Nancy Pelosi is the primary obstacle for device manufacturers. Device tax repeal or suspension enjoys broad bipartisan support, including from Senate Democratic Leader Chuck Schumer, D-N.Y. Many House Democrats in competitive districts represent significant clusters of industry employees, and those members are continuing to weigh in with Pelosi in opposition to the tax.

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Capitol Hill Healthcare Update

HEALTH PROVISIONS FACE UNCERTAINTY AS CONGRESS RETURNS FOR BUSY DECEMBER

Congress returns to Washington this week after the Thanksgiving holiday with only 18 days before the government runs out of money – and that’s not even the most important issue lawmakers will face in what is shaping up as a cramped year-end calendar.

In addition to scrambling to fund the government, the Democrat-controlled House is likely to vote this month to impeach President Donald Trump.

With lawmakers pushing other key items, such as tax provisions, renewing Pentagon programs and the U.S. trade agreement with Mexico and Canada, what’s the likelihood that healthcare provisions will see congressional action?

House leaders say they will schedule a  vote in the coming weeks on legislation that addresses prescription drug prices. Among other things, it would require pharmaceutical manufacturers to negotiate prices with the government on 250 drugs; it also would apply those negotiated prices to private health plans nationwide.

It will likely be a party line vote, with few if any Republicans supporting the House bill.

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Capitol Hill Healthcare Update

FDA NOMINATION HEARING DRIVES THE WEEK IN HEALTH POLICY

President Trump’s nominee to lead the Food and Drug Administration, Dr. Stephen Hahn, will appear Wednesday before the Senate Health, Education, Labor and Pensions Committee for a hearing on his nomination.

Hahn, an oncologist and chief medical executive at MD Anderson Cancer Center in Houston, is seen by lawmakers as a blank slate – he has a strong resume as a physician but scant policy experience. However, HELP Chairman Lamar Alexander, R-Tenn., announced he supports Hahn after meeting with the nominee Nov. 6. Meanwhile, Democrats are eager to replace current acting FDA Commissioner Brett Giroir because of concerns over his positions on social issues like abortion.

Still, Hahn is sure to face wide-ranging questions from lawmakers about the mission of the agency he hopes to lead. Senators are also likely to seek commitments from him to focus on certain policy issues.

Given Hahn’s lack of policy track record, senators will want details of his views on regulation of food, drugs and medical devices. Hahn can expect lawmakers to press him on ways the FDA can help to lower prescription drug costs while protecting medical innovation, including Trump’s efforts to allow drug importation. E-cigarettes will be a hot topic, as will cannabis regulation and efforts to stem opioid abuse.

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Capitol Hill Healthcare Update

COMPREHENSIVE DRUG BILL STALLS WHILE HOUSE PUSHES SMALLER MEASURES

House Democrats are planning to take up more narrow bills addressing prescription drug costs while their broad legislation is delayed as the Congressional Budget Office (CBO) works on estimating its budgetary impacts.

Majority Leader Steny Hoyer, D-Md., said the Democrats’ bill now won’t receive a floor vote until December – with some House staff fretting the vote could slip to January as leaders wait for CBO forecasts ahead of tough negotiations with moderate and liberal lawmakers.

CBO last month estimated the bill would save Medicare $345 billion over seven years by forcing manufacturers to negotiate prices with the government on 250 drugs and to apply those discounts to private health plans nationwide. Democrats want to redirect those savings to expand Medicare coverage for dentalvision and hearing services, leading to a delay as CBO figures out how much that would cost.

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Capitol Hill Healthcare Update

DEMOCRATS PRESS FOR PRE-THANKSGIVING VOTE ON DRUG PRICING BILL

The House Ways and Means Committee last week approved an amended version of legislation that would overhaul how Medicare and private insurers reimburse for prescription drugs, setting up what Democrats hope will be a pre-Thanksgiving vote on the House floor.

It was the third House committee to vote on the bill, which would direct the government to negotiate prices with manufacturers on several dozen high-cost drugs, saving an estimated $345 billion over 10 years. The committee separately approved three bills that would expand Medicare coverage to include dental, vision and hearing services, and those provisions are expected to be attached to the drug pricing bill.

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Capitol Hill Healthcare Update

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.

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Capitol Hill Healthcare Update

PELOSI DRUG PRICE PLAN EXPECTED THIS WEEK

House Speaker Nancy Pelosi, D-Calif., is expected to release her long-awaited plan this week to address prescription drug costs, according to congressional staff.

A draft summary of the proposal that circulated last week would allow the government to negotiate prices with manufacturers on 250 drugs and impose sweeping fines on companies that failed to participate. The negotiated price – which manufacturers say would be de facto price controls – also would extend to the prices of drugs sold through commercial insurance.

Two House committees plan to vote on Pelosi’s bill in the coming weeks, setting up a potential vote on the House floor by the end of October. In an apparent nod to President Donald Trump’s proposal to base physician-administered drug prices on an index of prices paid in certain European countries, Pelosi would copy that formulation for Medicare Part D drugs, too.

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