Health Policy Report

The Week in Review
 
The week in Congress was dominated by debate on the Obama administration’s nuclear agreement with Iran. Under the deal, Iran will maintain the ability to enrich uranium for peaceful purposes, but be subject to intensive inspections from the International Atomic Energy Agency (IAEA). Republicans have vehemently opposed the deal and have been joined by a handful of moderate Democrats. Both the House and Senate considered disapprovals of the deal last week, but they diverged on the exact mechanisms for conveying their disapproval. The Senate took up a legislative vehicle (H.J. Res. 61) to serve as their disapproval, but it failed a cloture vote on Thursday as the 42 Democrats in favor of the deal held firm. Meanwhile, the House introduced a series of three measures; one approving the deal (H.R. 3641), one demanding the President to release the details of “side deals” between the IAEA and Iran (H. Res.  411), and a third preventing the President from lifting sanctions on Iran until January, 2017 (H.R. 3460). The approval failed by a vote of 162-269, the side deal bill passed 245-186, and the sanctions bill passed 247-186; but both of the passed measures are likely to founder in the Senate.

In addition to acting on the Iran deal, the House passed a pair of medical research bills last week. The first (H.R. 1344) reauthorizes a federal program for the early detection, diagnosis, and treatment of hearing diseases in deaf and hard-of-hearing children by providing grants and cooperative agreements for state-wide screening and intervention programs. The second (H.R. 2820) reauthorizes a stem-cell research initiative called the National Cord Blood Inventory program, which aims to improve the matching of blood and bone marrow donors to recipients. 
 
The Week Ahead
 
The Congressional schedule will be shortened this week by the Rosh Hashanah holiday, but the House aims to take up legislation that will keep the government funded beyond the current fiscal deadline of September 30, according to House Appropriations Committee Chairman Hal Rogers (R-KY). Republican leaders will attempt to navigate the demands of their party’s more conservative members, who have vowed to vote against any legislation that maintains funding of the controversial women’s health organization Planned Parenthood. The Senate may also wade into the reproduction debate by advancing a bill (S.1553) that bans abortions past 20 weeks.
 
House leaders may also consider two regulatory measures; one is designed to facilitate the environmental reviews of government construction projects, and the other aims to raise the penalties on people who file illegitimate lawsuits. In non-legislative action, the House is set to swear in Darin LaHood (R-IL), who will be representing Illinois’ 18th district after Aaron Schock resigned earlier this year due to questions over his use of government funds. 
 
Shutdown Talk Continues; Freedom Caucus Stands Firm on Planned Parenthood
 
Last Wednesday, House Republicans met in a closed-door meeting to discuss how to address mounting GOP pressure to defund Planned Parenthood, including threats to shut down the government. The following day, Sen. Rand Paul (R-KY) headlined a rally with several pro-life groups outside the Capitol, calling on Congress to cut off funding for Planned Parenthood in the spending bill that must be passed by Oct. 1 to avert a shutdown. The conservative group Heritage Action for America says at least 28 House Republicans have signed or plan to sign a letter calling on Speaker John Boehner (R-OH) and his leadership team to block the group’s funding. If that many House Republicans stick to those demands, Boehner would lack the votes needed to pass a stopgap government spending bill necessary to keep the government operating. House Democrats would be expected to vote against legislation blocking funding for the group, which is under fire after the release of a series of undercover videos of Planned Parenthood officials discussing the donation of tissue from aborted fetuses.
 
Conservatives want to redirect money to federally approved community health centers that don’t perform abortions or donate fetal tissue for research, said Rep. Jim Jordan (R-OH), chairman of the conservative House Freedom Caucus. GOP leaders are eager to avoid yet another government shutdown threat fueled by a partisan standoff over healthcare. Senate Majority Leader Mitch McConnell (R-KY) drew a firm line against using the must-pass appropriations bill to defund Planned Parenthood during a news conference before the August recess, however, and GOP leadership staffers in both chambers have begun discussions about how to tackle the funding conundrum, though a real solution has yet to emerge. Aides say GOP leaders have several paths forward on defunding Planned Parenthood, all laid out in competing bills.
 
The most popular option would freeze all federal funding — mandatory and discretionary — for one year until the group is investigated. Another measure would block only the group’s Title X family planning grants without touching mandatory funding from Medicaid. None of the bills would be likely to pass the Senate, however, where rules allow the minority to filibuster legislation. And Republicans fear they’d be blamed if a shutdown resulted from the impasse. The White House has raised pressure on Congressional negotiators, reiterating that President Obama would not agree to any legislation that keeps sequester spending levels. Analysts say the smart money is on Congress doing what it typically does when it’s up against a deadline: namely, find a short-term fix and delay the fight for later. But the dynamics are so fluid and passions so high that no one truly knows how it will wind up on Sept. 30, the final day of the fiscal year and last day to extend funding or have the government close its doors.
 
Judge Rules that House Lawsuit on ACA Can Proceed
 
Last Wednesday, a federal judge allowed House Republicans to proceed with part of a lawsuit challenging the Obama Administration’s implementation of the 2010 health-care law, opening the door for another legal battle over the Affordable Care Act (ACA). U.S. District Judge Rosemary Collyer said the House has legal standing to bring claims alleging the Obama Administration was violating the Constitution in how it was paying for part of the ACA. The judge rejected the White House’s argument that the court shouldn’t referee a political dispute between the other two branches of government. The ruling means the partisan legal battle between the Administration and Congressional Republicans will continue as both parties gear up for the 2016 election. The lawsuit, however, targets a few relatively narrow sections of the ACA, so even if the House ultimately prevails on its remaining claims, most of the law would likely stand.
 
The House lawsuit alleged the administration was defying Congress by paying insurance companies billions of dollars for discounts on deductibles they must offer to very-low-income consumers under the 2010 health law. Lawmakers said they never appropriated funds for the Administration to do this. A White House spokesperson said the Justice Department plans to seek immediate appellate review.
 
The judge did side with the White House on other issues, throwing out additional legal claims by House Republicans. Judge Collyer ruled the House couldn’t bring claims alleging the Administration lacked authority to delay implementation of an insurance-coverage mandate that applies to large employers. The judge’s ruling only addressed whether the lawsuit could go forward and didn’t resolve the merits of the House’s legal claims. The Affordable Care Act has already survived two major legal challenges, most recently in June, when the Supreme Court upheld the availability of nationwide insurance subsidies for qualifying limited-income consumers.
 
Cures Facing Significant Hurdles Before Senate Consideration
 
Just a few months ago, the 21^st Century Cures legislation rocketed through the House of Representatives with broad bipartisan support. After more than a year of work, the medical innovation measure easily cleared the House s En­ergy and Com­merce Com­mit­tee in a 51-0 vote. It then moved to the House floor, where it over­whelm­ingly passed with 344 votes. Now, however, the reform initiative is in danger of hitting a brick wall, with some Hill insiders saying some House Republicans may have voted to sup­port the “21st Cen­tury Cures” bill only be­cause it had panel chairman Fred Up­ton’s (R-MI) name on it. The measure already pit­ted con­ser­vat­ive budget hawks against the rest of their party in the House and comes with a price tag up­wards of $8.75 bil­lion. Now it appears that the “Cures” pay-for – rev­en­ue gen­er­ated by the Stra­tegic Pet­ro­leum Re­serve – may not be avail­able. SPR cash was in­cluded in the Sen­ate ver­sion of high­way le­gis­la­tion be­fore the August re­cess. Al­though the House passed its own short-term ver­sion of the high­way meas­ure, the is­sue will have to be debated again in the fall.
 
In the upper chamber, the Senate HELP committee plans to consider its own med­ic­al-in­nov­a­tion bill in the fall. Out­side of the com­mit­tee, Sen­ate Demo­crat­ic Whip Dick Durbin (D-IL) has an al­tern­at­ive med­ic­al-in­nov­a­tion bill sub­stan­tially dif­fer­ent than Cures in sev­er­al ways, in­clud­ing the amount of fund­ing it gives to the Na­tion­al In­sti­tutes of Health ($26.6 bil­lion over the next five years versus Cures’ $8.75 bil­lion). With three big strikes against it, some analysts say the Cures bill is on life sup­port. Still, the En­ergy and Com­merce pan­el re­mains op­tim­ist­ic that Cures or a similar med­ic­al-in­nov­a­tion bill will ultimately end up on the desk of the pres­id­ent, who has also com­mit­ted to work­ing on the is­sue through the White House’s Pre­ci­sion Medi­cine Ini­ti­at­ive. HELP Chair­man Lamar Al­ex­an­der (R-TN) has said all along that the Sen­ate is on a “par­al­lel track” with the House, and he hopes to get his com­mit­tee’s ver­sion of the bill done be­fore the end of the year. But Al­ex­an­der has also been clear that the Sen­ate is not just go­ing to take up the House ver­sion, al­low­ing for dif­fer­ences between the two bills and guar­an­tee­ing a con­fer­ence over the two dif­fer­ent ver­sions. Given the uncertain path of the Cures bill, some analysts say it could be pushed into next year or shelved altogether – not the outcome Chairman Upton and lead cosponsor Diana DeGette (D-CO) envisioned earlier this year.
 
MedPAC Backs CMS on Biosimilars
 
The Medical Payment Advisory Commission’s (MedPAC) has expressed support for CMS' proposal to lower the price of biosimilars, saying the Part B proposal could form the basis of policies that would reduce the price of both biosimilars and the brand biologics they reference. The Congressional advisory board said the biosimilar industry's arguments against the policy are simply a means of seeking price protections, and the commissioners suggested that drug makers should disclose their costs and revenues. Congress gave biologics 12 years of exclusivity in the ACA, and CMS hopes to drive down the price of biosimilars once that exclusivity period expires by placing biosimilars that reference the same brand biologics in single billing codes. The biosimilars industry says CMS' proposal would lower biosimilar reimbursement to the point that the market would be ruined before it even starts. Industry firms also argue that CMS' interpretation is inconsistent with the agency's own Medicaid rebates policy on biosimilars.
 
A bipartisan group of House lawmakers recently sided with the industry, writing to CMS that biosimilars are more complex than traditional generic drugs so Medicare policy should treat biosimilars differently than generic drugs. Energy & Commerce members Joe Barton (R-TX) and Anna Eshoo (D-CA), a key author of the law that created biosimilars, led the letter. MedPAC commissioners say drug companies are in effect arguing that price protections are needed to spur development of biosimilars. MedPAC says that industry's position isn't supported by evidence that the biosimilars marketplace, unlike other markets, merits price protections. Another industry complaint is that CMS' proposal would make it difficult to differentiate among biologics and biosimilars when tracking down the cause of side effects. FDA also proposed giving biosimilars and biologics unique common names so the government and drug companies could monitor drugs for side effects. Commissioners said that if policymakers desire CMS claims data to complement FDA post-market monitoring, CMS could develop a way to distinguish biosimilars on claims without assigning them unique code.