On The Hill

Drug pricing and surprise billing legislation encompassed most business on the healthcare front this week. Elsewhere, Capitol Hill remained focused on the House Judiciary Committee’s impeachment hearings into President Trump and efforts by appropriators to keep the government open through the rest of fiscal year 2020. House Speaker Nancy Pelosi’s (D-CA) drug pricing bill (HR 3) was passed on the House floor, and the Republican alternative (HR 19) was voted down, both mostly along party lines. On the surprise billing end, the House Energy and Commerce Committee and Senate HELP Committee came to an agreement on legislation early in the week, while the House Ways and Means Committee leaders introduced their own version. Additionally, the Senate confirmed Dr. Stephen Hahn as the new Commissioner of the FDA by a vote of 72-18.

 

Drug Pricing

HR 3

On Thursday (Dec. 12), the House passed Pelosi’s drug pricing bill (HR 3), the “Lower Drug Costs Now Act of 2019” by a vote of 230-192. Two Republicans broke ranks to support the measure. The bill would mandate that the government negotiate the price of at least 25 Medicare Part D drugs annually, ultimately requiring federal officials to hammer out the cost of at least 50 medicines a year. Commercial insurers could also take advantage of the deals. A separate set of provisions would limit drug manufacturers’ ability to annually hike prices in Medicare, forcing them to rebate the portion of the increase that is above the rate of inflation. The bill envisions eventually expanding that requirement to the private sector under language that progressives, led by Rep. Pramila Jayapal (D-WA), secured in negotiations with Pelosi just 48 hours ahead of the vote. The legislation would also place a first-ever cap on out-of-pocket drug costs for Medicare beneficiaries. Democrats directed the bulk of the bill’s projected savings toward an ambitious expansion of Medicare benefits that would extend dental, vision and hearing coverage to seniors. Additional investments are earmarked for federal research agencies like the National Institutes of Health, and efforts to slow the opioid epidemic. The Congressional Budget Office (CBO) predicted that the legislation overall would lower federal spending by $456 billion over a decade, with the expansion of Medicare benefits costing the government roughly $358 billion over a decade. However, the bill is also projected to curtail drugmakers’ ability to launch new drugs — a point that Republicans contend will harm efforts to cure major diseases. The industry would launch eight fewer drugs over the first decade under the legislation, CBO said, and 30 fewer over the subsequent decade due to lost pharmaceutical revenues that would eat into research and development. ^[1]  The bill is likely to be dead upon arrival in the Senate, as Senate Majority Leader Mitch McConnell (R-KY) mentioned he would not take up the bill. A link to the full text of the bill can be found here.

 

HR 19

This week, the GOP alternative to HR 3, the Lower Costs, More Cures Act (HR 19), was voted down during floor consideration by a vote of 223-201. Eight House Democrats voted in favor of the measure. The bill, led by Ways and Means Ranking Member Kevin Brady (R-TX) and Energy and Commerce Committee Ranking Member Greg Walden (R-OR), sought to lower drug costs for Americans, without limiting access to cures. ^[2] The legislation bundled a range of measures already advanced by the House committees or included in the Senate Finance Committee-approved drug pricing bill, S. 2543. These policies include a $3,100 annual out-of-pocket cap for Medicare patients and provisions to discourage drugmakers from gaming the patent system to fend off generic drug competition. It would also require insurance companies to make drug price information available at doctors’ offices and create a new United States Trade Representative negotiator to focus on prescription drug prices in trade agreements. House GOP leaders left out proposed fines that the bill would impose on drugmakers that raise prices past the point of inflation. ^[3] 

A link to the full text of the bill can be found here.

A section by section summary of the bill can be found here.

 

Surprise Billing

Senate HELP & House E&C Agreement

The Senate HELP and House Energy & Commerce committees announced a deal early in the week on surprise billing legislation, which they hope to attach to a year-end spending bill. The compromise is similar to legislation passed earlier this year by the House E&C Committee, but it makes it easier for insurers and providers to move to an independent dispute resolution. The compromise sets a benchmark payment rate for out-of-network bills at the median in-network rate for a geographic area, and the insurer or provider can move to an independent dispute resolution process if the median in-network payment is above $750. For surprise bills resulting from air ambulances, the legislation sets the threshold for going to arbitration at $25,000. The bill also adds a 90-day cooling off period after a provider goes to arbitration, in which the party that initiated arbitration may not take the same party to arbitration for the same item or service. The air ambulance policy included in the bill is different from the one previously included in Senate legislation, which set a benchmark payment rate for out-of-network air ambulance bills at the median in-network rate. The updated bill does the same but sets a threshold for going to arbitration at $25,000. The White House welcomed the compromise and asked that Congress send the legislation to the president’s desk before the end of the year. ^[4] 

 

Ways & Means on Surprise Billing

Shortly after the Senate HELP and House E&C committees announced their bipartisan plan on surprise billing, House Ways and Means Chairman Richard Neal (D-MA) and Ranking Member Kevin Brady (R-TX) released a bipartisan agreement to end surprise medical bills and said they want Congress to take up the issue in 2020 rather than rushing to pass a policy by year’s end. The Ways & Means proposal sets the patient cost-sharing for out-of-network bills at the in-network rate for a geographic area, whereas the House E&C and Senate HELP plan sets a benchmark payment rate for out-of-network bills at the median in-network rate for an area. Also, the Ways & Means plan calls for a “robust reconciliation process,” which looks different from the independent arbitration process outlined in the House E&C and Senate HELP agreement. Unlike the House-Senate compromise, the Ways & Means proposal does not specify a threshold for the reconciliation process, and it could be triggered at any time. In order to disincentivize providers, payers and patients from overusing the reconciliation process, Ways & Means would subject the losing party to a reconciliation process fee. Also, providers and plans that overuse the process would face a surcharge and the bill would require annual reporting of the decision rendered through the process. The committee does not say whether the limit on patient cost-sharing would function like a benchmark payment rate or whether it would be based off the mean or median in-network rate for a geographic area. ^[5] 

 

Toomey Alternative

This week, Sen. Pat Toomey (R-PA), who chairs the Senate Finance Committee’s Subcommittee on Health Care, announced an alternative proposal to the Grassley-Wyden health care extender package that was released last week. Toomey announced in his release that “The Grassley-Wyden proposal neglects to address multiple health care related taxes, dramatically expands and extends the authorization of some well-intentioned programs without any real improvements to protect taxpayers or improve health outcomes for patients, and relies on price controls for prescription drugs – an idea that was rejected by a majority of Republican members of the Senate Finance Committee earlier this year.” “In contrast, my proposal makes permanent tax policies that help patients, consumers, and businesses without adding to the burden our safety net programs are shouldering. Senator Mike Crapo (R-ID) cosponsored Sen. Toomey’s health care extender package. ^[6] For a full summary of the bill, click here. For a review of the draft of the extender package, click here.

 

Hearings

House E&C Subcommittee on Oversight & Investigations

The House Energy & Commerce Subcommittee on Oversight & Investigations held a hearing on Tuesday (Dec. 10) entitled, “Securing the U.S. Drug Supply Chain: Oversight of FDA’s Foreign Inspection Program.” Committee members were in agreement that it is essential to ensure the foreign inspection program is effective and echoed three main issues with the program as it stands: 1) understaffing in FDA foreign offices, 2) common practices such as providing manufacturing sites advance notice of inspections that may lead to inaccuracies of inspections, 3) relying on firms to provide translators to relay information to inspectors. While the committee was largely bipartisan, in his opening statement, Ranking Member Brett Guthrie (R-KY-02) noted his displeasure with the partisan process surrounding HR 3. Apart from inspection processes, there was some discussion on the safety of generics. In his opening statement, full committee Chairman Frank Pallone (D-NJ) stressed that both brand name and generic manufacturers rely on drug products from overseas. When asked about the safety of generics by Congressman David McKinley (R-WV), Dr. Woodcock assured him that the FDA stands behind generic medicines. An executive summary of this hearing can be found here.

 

House E&C Subcommittee on Health

The House Energy & Commerce Subcommittee on Health held a hearing on Tuesday (Dec. 10) entitled, “Proposals to Achieve Universal Health Care Coverage.” Subcommittee Chairwoman Anna Eshoo (D-CA) and Committee Chairman Frank Pallone (D-NJ) focused on the Democrat’s goal of universal health care access in America, while Subcommittee Ranking Member Michael Burgess (R-TX) and Committee Ranking Member Greg Walden (R-OR) denounced the proposed plans as costly government takeovers. Five Democratic members introduced their bills, ranging from targeted in-system reforms to large-scale overhauls. H.R. 2452 and H.R. 1384, introduced by Reps. Rosa DeLauro (D-CT) and Pramila Jayapal (D-WA) respectively, would both replace the current health care system with a universal, government run system; DeLauro’s bill would allow private insurance to continue playing a role, while Jayapal’s bill would not. Rep. Antonio Delgado’s (D-NY) H.R. 1346 would introduce a public competitor, Medicare X, in the current system, as well as several other reforms. Rep. Tom Malinowski’s (D-NJ) H.R. 4527 and Rep. Brian Higgins’ (D-NY) H.R. 1346 would both open Medicare up to people younger than 65; in Malinowski’s bill, first responders specifically would be eligible. An executive summary of this hearing can be found here.

 

References

^[1] Cancryn, Adam. “House passes bill requiring drug price negotiations.” Politico Pro. 12 Dec. 2019. https://subscriber.politicopro.com/article/2019/12/house-passes-bill-requiring-drug-price-negotiations-3974965

^[2] “Brady, Walden, Foxx, Collins Introduce Legislation to Lower Drug Costs.” House GOP Ways & Means. 9 Dec. 2019. https://gop-waysandmeans.house.gov/brady-walden-foxx-collins-introduce-legislation-to-lower-drug-costs/

^[3] Owermohle, Sarah. “House GOP unveils alternative to Pelosi drug plan.” Politico Pro. 9 Dec. 2019. https://subscriber.politicopro.com/article/2019/12/house-gop-unveils-alternative-to-pelosi-drug-plan-3974805

^[4] Cohen, Ariel. “Surprise Billing Compromise Lowers Arbitration Threshold, Keeps Previous Benchmark.” Inside Health Policy. 9 Dec. 2019. https://insidehealthpolicy.com/daily-news/surprise-billing-compromise-lowers-arbitration-threshold-keeps-previous-benchmark

^[5] Cohen, Arial. “Ways & Means Unveils Surprise Billing Fix, Hopes to Push Issue to 2020.” Inside Health Policy. 11 Dec. 2019. https://insidehealthpolicy.com/daily-news/ways-means-unveils-surprise-billing-fix-hopes-push-issue-2020

^[6] “Toomey Introduces Alternative to Grassley-Wyden Health Care Extender Package.” US Sen Pat Toomey. 9 Dec. 2019. https://www.toomey.senate.gov/?p=op_ed&id=2537

^[7] Lienhard, Kelly. “Senate Confirms Stephen Hahn as New FDA Commissioner.” Inside Health Policy. 12 Dec. 2019. https://insidehealthpolicy.com/daily-news/senate-confirms-stephen-hahn-new-fda-commissioner