Health Policy Report

The Week in Review
 
While the House remained in recess, the Senate returned to approve a bill related to trade secrets and begin negotiations on a reauthorization for the Federal Aviation Administration (FAA). On Monday, senators approved a measure (S. 1890) addressing the misappropriation of trade secrets that would allow effected companies to seek civil penalties as redress for stolen trade secrets rather than relying completely on federal law enforcement. The bipartisan bill was passed on a unanimous vote of 89-0, clearing the way for work on another bipartisan cause – reauthorization of the FAA.

Senators spent the remainder of the week hammering out differences on renewing the aviation agency’s operations and revenue-collection authority, using a legislative vehicle (H.R. 636) to ease the inclusion of an extension of excise taxes used to pay for airport improvements. The upper chamber’s measure notably lacks a controversial provision to privatize the FAA’s air-traffic control operations that sunk the House’s effort (H.R. 4441). However, Democrats have demanded that the must-pass legislation include the extension of an Investment Tax Credit for various renewable energy programs. Republican leaders have suggested that the final bill will include that provision, with Senate Finance Chairman Orrin Hatch (R-UT) saying a deal to add the credits was “pretty well done.”
 
In significant committee action, the Senate Health, Labor, Education, and Pensions (HELP) Committee advanced five bills in the final of its series of markups on medical innovation known as the “Innovation for Healthier Americans” initiative. Committee leaders hope that an agreement can be reached soon to bring the HELP Committee’s entire package of 19 bills to the floor along with new mandatory funding for National Institutes of Health (NIH) during the April work period. A full breakdown on the bills and the markup is included in the first entry on health policy developments below.
 
The Week Ahead
 
House members return from a two-week recess to a full slate of legislative business, including a trio of regulatory bills.  The House may take up measures that would bar the federal government from regulating consumer broadband Internet rates (H.R. 2666); bring the Financial Stability Oversight Council (FSOC) and Treasury Department’s Office of Financial Research (OFR) under the congressional appropriations process (H.R. 3340); and allow banks and thrifts with assets of less than $5 billion to incur higher amounts of debt when acquiring another firm (H.R. 3791).
 
Off the floor, House Republicans will look to build support for legislation to address Puerto Rico’s debt crisis. The House Natural Resources Committee plans a Wednesday hearing on the measure. Republicans concede they will likely need Democratic help to pass the bill, and party leaders are trying to figure out which concessions will be needed to secure the necessary votes.  Puerto Rico’s insolvency prompted the island’s government to halt payments on a wide swath of its $70 billion debt this week. In the Senate, Finance Committee Chairman Orrin Hatch (R-UT) said it would be “disastrous” if Puerto Rico’s bondholders don’t get paid.
 
In the Senate, watch for efforts to pass legislation to reauthorize Federal Aviation Administration (FAA) operations and revenue-collection authority through Sept. 30, 2017.  With the Senate working through amendments to the legislative vehicle for the FAA bill (H.R. 636), we expect Democrats to keep pressing for inclusion of renewable energy tax credits.
 
As Senate HELP Completes 'Innovation' Package, NIH Funding Challenge Looms
 
On Wednesday, the Senate Health, Education, Labor and Pensions (HELP) Committee advanced five bills in the final markup of the Innovation for Healthier Americans initiative, as Democrats on the Committee intensified their push for a deal on funding medical research.  Chairman Lamar Alexander (R-TN) noted that the Committee is still working to reach bipartisan agreement to boost funding for the National Institutes of Health (NIH), a step that would address the Democrats’ chief demand for the legislation.  Committee leaders hope that an agreement can be reached as soon as this week to bring the HELP Committee’s package of 19 bills to the floor along with new mandatory funding for NIH during the April work period. 
 
At Wednesday’s hearing, Chairman Alexander acknowledged that the package would not come to the floor without an agreement on NIH funding, but also held out the funding as a ‘carrot’ to encourage Democrats to support the package.  “Without that agreement, we don’t get this bill,” he said. “But without this bill, we don’t get mandatory funding, either.” Chairman Alexander said he has been working with Finance Chairman Orrin Hatch (R-UT), and recently met with the Sen. Ron Wyden (D-OR), ranking member on the Finance Committee, and Department of Health and Human Services (HHS) Secretary Sylvia Mathews Burwell to find ways to offset new NIH funding. Both sides expressed optimism that they could work out a deal, the starting point for which is likely the House bill’s $8.8 billion over five years. “I hope we’ll be able to share an agreement with committee members soon,” Chairman Alexander stated.
 
While the contentious issue of drug pricing was not addressed at Wednesday’s markup, Sen. Susan Collins (R-ME) said she expects it to come up on the Senate floor. Sen. Collins, who has been tackling drug pricing as Chair of the Senate Aging Committee, previously introduced a bill that would speed up the review process for generic drugs in order to spur competition to off-patent drugs that have undergone price hikes.  Chairman Alexander also said he expects to address the regulation of lab tests on the Senate floor. He said Wednesday he might introduce a bill on the issue, and pledged to work with Ranking Member Patty Murray (D-WA). Democrats have been opposed to legislation on the oversight of lab tests, and the FDA is expected to release a controversial final guidance on the issue this year.
 
MEDPAC Recommends Controversial Change to Medicare Part D 
 
Last week, the Medicare Payment Advisory Commission (MedPAC) unanimously approved a package of recommendations on Medicare Part D, including changes that would remove antidepressant and immunosuppressant drugs from the protected classes, modify Part D reinsurance, change beneficiary cost-sharing, and implement other reforms. Among the most controversial recommendations are ones that would: (1) exclude manufacturers' discounts in the coverage gap from enrollees' true out-of-pocket spending; (2) eliminate enrollee cost sharing above the out-of-pocket threshold; and (3) remove antidepressants and immunosuppressants for transplant rejection from the program’s classes of clinical concern (or “protected classes”).
 
The Pharmaceutical Research and Manufacturers of America (PhRMA) and Partnership for Part D Access, which includes patient groups and others, quickly came out against the proposals. “PhRMA strongly opposes the sweeping new Medicare Part D recommendations approved by MedPAC earlier today. Taken together, these recommendations will significantly harm beneficiaries by eroding coverage and protections for some of the most vulnerable enrollees in the program. MedPAC’s vote also ignores broad stakeholder concerns raised in response to these proposals,” PhRMA said in a statement Thursday. Notably, PhRMA expressed concern that the recommendation to exclude manufacturer discounts in the coverage gap from enrollees’ true out-of-pocket spending would in effect widen the coverage gap, thus increasing beneficiary out-of-pocket spending and hurting patients. Some Commissioners raised concerns over increasing costs for beneficiaries in the so-called coverage “donut hole,” such as Commissioner Katherine Baicker, who was apprehensive about exposing beneficiaries to more costs.
 
Furthermore, the Partnership for Part D Access and PhRMA, among other stakeholders, expressed concern that removing two protected classes of drugs would jeopardize access to those medications for program beneficiaries.  In a statement Thursday, the Partnership called the recommendation short-sighted, stating, “Restricting timely access to medicine jeopardizes patient health, puts patients at greater risk for poor clinical outcomes, and increases costs for patients and taxpayers. The Partnership for Part D Access is activating to alert patients and affected stakeholders about the danger of MedPAC’s ill-advised proposal to limit access to essential medications.” Despite the unanimous vote of approval, the recommendation to remove antidepressants and immunosuppressants from the six protected classes was met with skepticism from several commissioners.  For example, Commissioner Craig Samitt of Anthem questioned whether the benefits of the policy outweighed the potential risks, adding that “it’s not clear the degree to which we would achieve savings in the program.”
 
MedPAC Discuss Role Of Market In Controlling Part B Drug Spending
 
On Thursday, MedPAC approved a recommendation that aligns closely with the Center for Medicare and Medicaid’s (CMMI) pending Part B drug demonstration. Specifically, MedPAC recommended a number of options to replace the current average sales price (ASP) six percent add-on payment for storing and furnishing Part B drugs. The recommendation follows concerns that the dispensing fees for some Part B drugs were originally set based on limited data and that Part B pays much more for such fees compared to other programs like Part D and Medicaid.
 
During the meeting, MedPAC Commissioners weighed a number of policy options, with a goal of honing in on policies for consideration at future meetings to sort out the various recommendations. The list of options weighed by commissioners included: restructuring the add-on payment, limiting the growth of drugs’ average sales price, placing biologics in single billing codes and bringing back the Competitive Acquisition Program with a new design. MedPAC voted unanimously to support a recommendation for its June 2016 report to Congress which suggested that the Secretary of the Department of Health and Human Services reduce the Medicare Part B dispensing and supplying fees to rates similar to other payers.
 
House Likely to Vote on Opioid Bills in May
 
On Thursday, House Majority Leader Kevin McCarthy stated that a vote on legislation related to the nation’s opioid epidemic would likely occur in May. He cited that this would allow committees to wrap up work on bills in April so that they will be ready for May floor votes. “We want to build on efforts to prevent addiction and treat those suffering, crafting legislation that will gather bipartisan support and get signed into law,” McCarthy said. “The President’s own proposals to combat opioid addiction demonstrate that there is ample opportunity to reach a bipartisan consensus, and the Senate’s recent work to combat opioid addiction shows bicameral legislative interest.” Among the bills in the works are one from Reps. Jim Sensenbrenner (R-WI) and Larry Bucshon (R-IN) that would improve opioid abuse treatment and prevention efforts, as well as others that would improve guidelines for physicians, help infants born to opioid-addicted mothers and refine the nation’s drug laws.
 
Not everyone is satisfied with Majority Leader McCarthy’s announcement, however. Concerned that the May timeline wasn’t fast enough, Sen. Rob Portman (R-OH), lead sponsor of the Senate’s Comprehensive Addiction and Recovery Act which passed last month by a vote of 94-1, urged the House Thursday to speed up McCarthy’s timeline. He pressed the House to start to act on legislation addressing the opioid epidemic when members return to D.C. this week.
 
FDA Approves Second Biosimilar, But May not Enter Market Until June
 
On Tuesday, the Food and Drug Administration (FDA) approved the second biosimilar that can enter the U.S. market, Celltrion's and Hospira's Inflectra, a version of Janssen’s drug Remicade that is used to treat Crohn's disease, ulcerative colitis, rheumatoid arthritis, psoriasis and arthritis of the spine.  However, according to a Janssen amicus brief in the Amgen v. Apotex court case, despite FDA approval, the drug will likely not enter the market until June due to litigation issues. Janssen had filed suit against the biosimilar sponsors alleging the companies refused to “participate to date in required statutory procedures.” Janssen stated that “by serving a premature notice of commercial marketing,” unless reversed by the court, the biosimilar makers “would thwart the statutory purposes of litigation actual disputes and burden the parties and the Court with unnecessary litigation.” In a brief filed in support of Amgen's argument against Apotex, Janssen said that Celltrion and Hospira agreed to refrain from entering the market until after June 29, even though their product could be approved before that time.
 
GAO Report: Security Flaws in ACA State Exchanges
 
Last week, the Government Accountability Office (GAO) revealed that it found significant cybersecurity flaws in three state-run Affordable Care Act (ACA) exchanges: California, Kentucky, and Vermont. Among the vulnerabilities found in the GAO’s study of these three states includes insufficient encryption and inadequate firewalls, putting millions of Americans at risk for having their personal data stolen.  California’s system, known as Covered California, is the nation’s largest state-run exchange. Both California and Kentucky have been touted as national models, though Vermont has had a documented history of issues with its exchange. Federal officials said their findings in the investigation, which was initially limited to those three states, likely means that other states’ websites have faced similar cyber issues. The GAO’s investigation had originally been released in March, but did not include the names of the states affected. The Associated Press reported the names of the three states Thursday in response to a Freedom of Information Act request.