Health Policy Report

The Week in Review

With the House out for the week ahead of the Independence Day holiday, the Senate’s work was divided between the hugely successful and the continually frustrating. On the latter, senators began the week by continuing consideration of the House-passed Military Construction-Veterans Affairs appropriations bill (H.R. 2577) that includes a funding package to combat the Zika virus. Democrats successfully blocked the bill over insufficient Zika funds and policy riders that would restrict access to birth control and suspend pesticide permitting requirements near waterways. The Senate will be scrambling to try again on the bill in order to pass a Zika funding package before Congress leaves for its summer recess later this month.

On a more positive note, Senate leaders successfully shepherded House-passed legislation (S. 2328) addressing Puerto Rico’s debt crisis through the chamber, with senators approving the measure on a 60-38 vote late last Wednesday. The measure, which was quickly signed into law by President Obama, will create a financial control board to oversee the island territory’s fiscal affairs and the restructuring of its debt. While Senate leaders beat a July 1 due date for Puerto Rico’s latest debt payment, the Puerto Rican government still defaulted on its constitutionally guaranteed debt on Friday and the island could run out of money as early as August. However, the bill’s provisions ensure that the government will be protected from litigation and sets up a process for creditors to receive what they’re owed. 

The Week Ahead

Congress returns from Independence Day with a full slate of legislative action to tackle before recessing in two weeks for the national conventions and the body’s traditional August break. The House reconvenes today after its last floor session ended abruptly due to Democrats’ dramatic sit-in on the chamber floor to force a vote on gun control proposals. House lawmakers will be set to vote this afternoon on a mental health bill unanimously passed by the Energy and Commerce Committee earlier this month. The bill, sponsored by Rep. Tim Murphy (R-PA), is budget neutral and has dodged the inclusion of controversial provisions that have doomed previous efforts at mental health reform. The lower chamber will also resume consideration of the fiscal 2017 Financial Services and General Government spending bill (H.R. 5485), which includes cuts to the budgets of the Internal Revenue Service (IRS) and Securities Exchange Commission (SEC), and would also subject the Consumer Financial Protection Bureau (CFPB) to the annual appropriations process. A rule crafted last week would allow for 70 amendments to be considered with the legislation.

The Senate returns tomorrow to a cloture vote on the vehicle (S. 764) for legislation that would create the first nationwide standard for foods containing genetically modified organisms (GMOs). Votes are also expected on a bill (S. 2193) that would increase penalties for those who illegally re-enter the U.S. after being removed, and a measure (S. 3100) that would direct so-called “sanctuary cities” to cooperate with federal officials seeking to remove undocumented immigrants suspected of crimes or terrorism. Finally, the upper chamber may take up the defense appropriations bill (S. 3000), with the parties likely to battle over a provision pushed by Sen. Lindsay Graham (R-SC) to increase the Pentagon’s budget by $18 billion. Democrats are hoping they will be included in conference negotiations on the defense measure, after being shut out of the process for the Military Construction-VA bill.

Off the floor, both parties are likely to continue accusing each other of failing to reach a compromise on a funding package to battle the Zika virus. Senate Majority Leader Mitch McConnell has reserved the right to reconsider the conference report on a measure (H.R. 2577) rejected by Senate Democrats last week over objections to Zika funding offsets and contentious policy riders. Meanwhile, House and Senate negotiators are trying to wrap up work on a long-term reauthorization of the Federal Aviation Administration (FAA) that is needed by July 15, although lawmakers may elect to pass another stopgap measure to keep the agency running through this fall.

Biden Announces Public-Private Partnerships for Cancer Moonshot

On Wednesday, Vice President Joe Biden made a number of announcement related to the Cancer Moonshot Initiative at a summit in Washington D.C. Before hundreds of medical researchers, oncologists, advocates and officials – its largest gathering to date – speakers revealed a host of steps the White House is taking to expedite medical research and better coordinate treatments for millions of Americans. The new initiatives include, among other things, efforts to give more than 20 drug makers an accelerated path to studying not-yet-approved drugs that would normally be delayed more than a year, aided by the Food and Drug Administration (FDA).  The FDA will also be creating a new oncology-focused research center to be led by Dr. Richard Pazdur. Furthermore, officials at the Centers for Medicare and Medicaid Services (CMS) announced a new pilot program to help patients pay for cancer treatments — one that included twice as many participants than they expected. The five-year Oncology Care Model, which will include 200 physician groups and 17 health plans, will tailor its Medicare reimbursements toward quality rather than quantity for chemotherapy and other cancer treatments. Outside groups also used the summit as a chance to announce new commitments to research. The American Cancer Society, the largest private, nonprofit sponsor of cancer research, declared a new goal to double its annual funding for research by 2021.

Notably, Vice President Biden delivered an emotional appeal to those attending the summit whose support is needed for the “moonshot” bid to find a cure for cancer. “Cancer touches everyone in some way. Almost every one of us in here has lost someone relatively close to us,” he said. “We’re all here because we can do something about it.” During his speech, the Vice President touted the national show of support he has seen for the high-profile effort, which was launched after his older son died of cancer last year. “I’ve been stunned, stunned, stunned at the response to the president's announcement,” he said. “It’s nothing about me or the president, it’s about the intensity with which people feel about this subject and the overwhelming desire to have some concrete hope.”

House and Senate Members Introduce Legislation to Reduce Biologic Exclusivity To 7 Years

On Thursday, Sens. Sherrod Brown (D-OH) and John McCain (R-AZ), along with Rep. Jan Schakowsky (D-IL) introduced legislation that would reduce exclusivity for brand-name biologic products from twelve to seven years. While a number of organizations have already endorsed the bill – including AARP, Families USA, and Center for Medicare Advocacy – the Biotechnology Innovation Organization has come out against the legislation, arguing that language would disrupt the careful balance struck in the Biologics Price Competition and Innovation Act. “Data exclusivity of 12 years is an essential incentive for the huge risks associated with biotechnology investment. The majority of biotechnology companies are small, private start-ups, heavily reliant on venture capital investment,” the group stated.

The identical House and Senate bills stipulate that changes would only apply to a biological product for which the reference product is licensed under the Public Health Service Act on or after the date of enactment of the bill. There would be a group of biological products with 12 years of exclusivity and others with seven years if the bill is signed into law. The legislation strongly aligns with President Obama and Democratic presidential candidate Hillary Clinton's plan to lower prescription drug costs. This includes increasing competition for specialty drugs, such as new biologic drugs, which Clinton says are often the most expensive new treatments. The Democratic presidential hopeful also calls for the Food and Drug Administration (FDA) to prioritize and expedite review to biosimilar applications that only have one or two competitors in the marketplace.

Senate Finance Committee Criticizes Stark Law, Suggests Changes

According to a report released by Senate Finance Committee Chair Orrin Hatch (R-UT), the Stark Law – also known as the physician self-referral law – is long overdue for changes. As detailed in the report released Thursday, the law has become “increasingly unnecessary” and a “significant impediment” to the value-based payment models that are replacing traditional, fee-for-service models. The report argues that the type of overuse of services the law was meant to prevent is mostly eliminated in alternative payment models. In such models, it’s believed that it’s in physicians' best interests to eliminate unnecessary services because they don't get paid per service as they did in traditional payment models. Furthermore, the report said that many of the comments that followed a December roundtable focused on potential new waivers or exceptions to Stark, expansion of existing waiver or exceptions, a broadening of the CMS' regulatory authority, and repealing parts of Stark or the entire law. However, commenters did acknowledge that the physician self-referral law has been effective in restricting physician ownership and investment in providers of ancillary services and has encouraged close scrutiny of physician relationships. They also praised the way the law allows providers to self-disclose violations and the CMS to compromise on repayment amounts.

Chairman Hatch noted in the report that the Committee would consider all the comments as it evaluates and develops potential changes to the physician self-referral law. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) already finalized some changes to the law last year within the Medicare physician fee schedule for 2016 that offered providers a little more flexibility when it came to technical violations of the law. But some say those changes did not necessarily address the law within the context of the industry's move to value-based care.

House and Senate Opioid Conference Committee to Hold Meeting this Week

The House and Senate Opioid Conference Committee is slated to meet this Wednesday, July 6, according to House Energy and Commerce Chair Fred Upton (R-MI). Among the Senate conferees appointed by Senate Majority Leader Mitch McConnell (R-KY) include: Sens. Chuck Grassley (R-IA), Lamar Alexander (R-TN), Orrin Hatch (R-UT) Pete Sessions (R-TX), Patrick Leahy (D-VT), Patty Murray (D-WA) and Ron Wyden (D-OR). House conferees include 21 Republicans and 14 Democrats, who were appointed by Chairman Upton and Democratic Minority Leader Nancy Pelosi (D-CA).

House and Senate Democrats are expected to push for a number of provisions centered around combatting opioid abuse. Democrats in the House have said they hope to increase the cap on how many patients a physician can treat with buprenorphine, a medication-assisted treatment for opioid-use disorder. Meanwhile, Democrats in the Senate have said they seek to preserve a pharmacy lock-in provision not included in the House package. The most contentious debate is likely to center around funding, however, as Democrats in both chambers as well as the Obama Administration have long called for emergency funding to address the epidemic. Earlier this month, Sen. Jeanne Shaheen (D-NH) urged Senate conferees to include funding for prevention, treatment and recovery for state and local efforts. Meanwhile, Sen. Sheldon Whitehouse (D-RI) offered and passed a motion to instruct Senate conferees to press for key Senate provisions in their negotiations, including: rejecting proposals that would replace key programs authorized in the Senate-passed Comprehensive Addiction and Recovery Act (CARA); authorizing grants for states to improve prescription drug monitoring programs; and addressing the unique needs of rural communities.