On The Hill

Drug pricing was atop the healthcare news in Washington this week as there were big movements on Speaker Nancy Pelosi’s drug pricing bill (HR 3) and the Grassley-Wyden bill (S. 2543) in the Senate. Pelosi announced that the full House will vote on HR 3 after numerous changes and a preliminary CBO score, which estimates that the bill would save $500 billion over the next ten years. House Republicans are expected to release an alternative bill to HR 3 within the coming days. The Senate Finance Committee also released an update to its bill after receiving feedback from CMS and stakeholders, and it combined it with an extension of certain expiring Medicare and Medicaid provisions. In other news, the Senate HELP Committee approved Dr. Stephen Hahn’s nomination to be Commissioner of the Food and Drug Administration (FDA), likely setting up a vote on the Senate floor next week.

Hearings

Senate HELP Committee Nomination Hearing

The Senate HELP Committee held a hearing on Tuesday (Dec. 3) on the “Nomination of Stephen Hahn, M.D. to be Commissioner of Food and Drugs, Department of Health and Human Services.” The Senate HELP Committee swiftly passed Dr. Stephen Hahn’s nomination to be Commissioner of the Food and Drug Administration (FDA) through the committee and to the full Senate by a vote of 18 yeas to 5 nays. Chairman Lamar Alexander (R-TN) expressed his strong support for Dr. Hahn in his opening statement and mentioned his leadership at the MD Anderson Cancer Center as the Chief Medical Executive and his strong record as an oncologist. Ranking Member Patty Murray (D-WA) and Sen. Mitt Romney (R-UT) expressed their concern that Dr. Hahn refused to properly address questions in his hearing about tackling the youth vaping and e-cigarette crisis. Murray said that she would vote against his nomination because she believes that he poses the risk of siding with ideology and politics over public health and science. Romney said despite those concerns that he would vote yes, and he believes Dr. Hahn has a strong professional record and is qualified to lead the FDA. Senate Majority Leader Mitch McConnell (R-KY) filed for cloture on Dr. Hahn’s nomination, likely setting up a confirmation vote on the Senate floor next week. An executive summary of this hearing can be found here.

Surprise Billing

A senior administration official said Tuesday (Dec. 3) that the White House would be “comfortable” with a congressional compromise on ending “surprise” bills, even if it included some degree of outside arbitration, recognizing it may be needed to advance one of President Donald Trump’s health priorities. The administration until now has brushed aside the option of appealing payments to an independent arbiter, signaling on a call with reporters in May that it believed the process would be disruptive. Efforts to find a solution have split the healthcare industry between arbitration and an approach that relies on a federal benchmark rate to resolve payment disputes. The administration has largely avoided dictating an outcome. None of the leading bills in Congress contain the arbitration that providers want. A measure, S. 1895, which the Senate HELP Committee approved this summer, ties payments to a benchmark rate. A House Energy and Commerce-approved plan, H.R. 2328, relies on benchmarks while envisioning arbitration only in certain, likely limited, circumstances. House Energy & Commerce Committee Ranking Member Greg Walden (R-OR), said “we have made significant progress in regular discussions with our counterparts in the Senate and the Trump administration and are close to legislating.” ^[1] 

Drug Pricing

CBO Score for HR 3

The House will vote next week on Speaker Pelosi’s drug pricing plan (HR 3) after the Congressional Budget Office (CBO) offered a preliminary estimate that House Democrats’ drug pricing bill would save $500 billion dollars over the next ten years, according to House Democratic leaders. Democrats plan to use those savings to pay for additional drug research at the National Institutes of Health (NIH), additional Medicare benefits and a number of Medicare and Medicaid policies that would lower costs for beneficiaries of those programs. The updated bill also sticks to the limit of 250 drugs for which Medicare may negotiate prices annually. CBO already published an earlier limited estimate that the government drug price negotiation provision in Medicare Part D would save $345 billion over seven years, and the nonpartisan congressional budget officials were expected to project bigger savings in the final 10-year score. CBO has yet to publish that score, but House Democrats on Thursday (Dec. 5) released CBO’s top-line estimate. According to documents from Speaker Pelosi, NIH is slated to receive an addition $10 billion for drug research. The updated bill also gives FDA an additional $2 billion, nearly half of which would go to improving FDA’s technical infrastructure. ^[2] 

Liberal Language in HR 3 Weakened

House Democratic leaders plan to weaken language progressives inserted, which is likely to face fierce backlash from the liberal wing. Liberal lawmakers had touted the provision authored by Rep. Pramila Jayapal (D-WA) as essential to shoring up their support for legislation H.R. 3 that they otherwise found too soft on the industry. The provision would direct the federal government to examine how to require drug makers to refund money to employer-sponsored health plans when the companies raised prices above the rate of inflation. The government would have to issue regulations based on its study — a key element that Jayapal said would force federal agencies to further rein in drug prices. Democratic leadership and committee staffers said the final bill would drop the mandate that the government impose new regulations — only requiring it to only conduct a study. The staffers added that the Congressional Budget Office predicted that a similar provision in the legislation requiring inflation-based rebates in Medicare would not prompt drug companies to shift costs and charge health plans higher prices. ^[3] 

Grassley-Wyden

Senate Finance Committee leaders released an updated drug pricing bill on Friday (Dec. 6) less than 24 hours after House Speaker Nancy Pelosi announced the lower chamber will vote on her more-aggressive drug pricing bill next week. The updated Finance bill, drafted by Sen. Chuck Grassley (R-IA) and Ron Wyden (D-OR) with input from the White House, is expected to add insurer liability in the coverage gap, reduces manufacturer liability in the catastrophic phase and lowers the cost-sharing amount for beneficiaries from its current 25%. Sources say that Majority Leader Mitch McConnell (R-KY) is not yet on board and the timing of a floor vote is uncertain, but that the White House has given its nod of approval, which could put pressure on Senate Republican leadership. The updated legislation also requires that all Part D plans allow beneficiaries to spread the cost of drugs over a full plan year and includes some pharmacy direct and indirect renumeration reforms. It also includes a multi-year extension for health program extenders, including funding for the Puerto Rico Medicaid program and a delay of disproportionate-share hospital payment cuts that are set to expire on Dec. 20 and 31. ^[4] 

House E&C Republicans

Energy and Commerce Committee Republican Leader Greg Walden (R-OR), Oversight and Investigations Subcommittee Republican Leader Brett Guthrie (R-KY), and Health Subcommittee Republican Leader Michael Burgess (R-TX), are pressing top insurance companies for answers as to their role in the rising cost of insulin at the pharmacy counter. In letters to Anthem, Blue Cross Blue Shield, CVS Health, Cigna Corporation, Kaiser Permanente, and United Health Group, the leaders request information on the relationship between insulin’s list price and its negotiated price and the impact this negotiation process has on patients. During an Energy and Commerce markup of H.R. 3 in October, Democrats rejected an amendment from Rep. Burgess to ensure that all savings from price concessions for insulin be passed directly to consumers.

The leaders request information from the insurance companies on the following:

1. Cost of insulin to health plans and use of rebates negotiated on the company’s behalf.  
2. Formulary development. 
3. Health benefit design.
4. Supply chain relationships.
5.  
6. High Deductible Health Plans (HDHPs). 
7. Patient assistance programs. 

A link to the letters can be found here.

CMS Risk Adjustment

This week, the Center for Medicare and Medicaid Services (CMS) released a white paper on RADV for the Affordable Care Act (ACA) exchanges and is seeking comment.

A link to the white paper can be found here.

References

^[1] Roubein, Rachel. “White House open to 11th-hour ‘surprise’ medical bill fix.” Politico Pro. 3 Dec. 2019. https://subscriber.politicopro.com/article/2019/12/white-house-open-to-11th-hour-surprise-medical-bill-fix-1836315

^[2] Wilkerson, John. “Pelosi Rx Pricing Bill Saves $500B; Dems Add Slew Of Policies, Benefits.” Inside Health Policy. 5 Dec. 2019. https://insidehealthpolicy.com/daily-news/pelosi-rx-pricing-bill-saves-500b-dems-add-slew-policies-benefits

^[3]Karlin-Smith, Sarah. “House Leaders water down key liberal language in drug pricing bill.” Politico Pro. 5 Dec. 2019. https://subscriber.politicopro.com/article/2019/12/house-leaders-water-down-key-liberal-language-in-drug-pricing-bill-1839486

^[4] Cohen, Ariel. “Senate Finance Updates Drug Pricing Bill, WH Gives Blessing.” Inside Health Policy. 6, Dec. 2019. https://insidehealthpolicy.com/daily-news/senate-finance-updates-drug-pricing-bill-wh-gives-blessing