Health Policy Report

The Week in Review

With Congress on recess, the Trump administration took the biggest action of the week in Washington by announcing their intention to withdraw the United States from the Paris Agreement on climate change. The Agreement, signed by nearly every nation on Earth, set out voluntary carbon emissions standards to be met in order to prevent global temperatures from rising more than 2 degrees Celsius from pre-industrial levels. In announcing the decision to withdraw, President Trump cited unfairness in the American targets compared to India and China, as well as U.S. contributions to the United Nations’ Green Climate Fund, which is intended to help developing countries invest in environmentally-friendly technologies as they industrialize. Other major signatories, including France, Germany, China, and Russia, have all suggested that they will remain in the Agreement and intend to meet their emissions targets. A handful of U.S. states with Democratic governors have also pledged that they will maintain their commitment to the Agreement’s conditions.  

The Week Ahead

With lawmakers returning from recess, House Republicans will push forward on a long-held goal to revamp the Dodd-Frank financial reform law by bringing replacement legislation to the House floor. When the House reconvenes tomorrow, it will begin consideration of legislation (H.R. 10), championed by Financial Services Committee Chairman Jeb Hensarling (R-TX) that would adjust bank regulations to focus on capital rather than regulatory supervision, significantly alter the structure and authority of the Consumer Financial Protection Bureau (CFPB), and eliminate the Federal Deposit Insurance Corporation’s (FDIC) liquidation process for federally-regulated banks. Support for the bill has largely been along partisan lines, with Democrats arguing that the package endangers the financial system to benefit Wall Street and Republicans maintaining that burdens stemming from Dodd-Frank have limited economic growth and harmed the community banking sector. House Republicans seem to be united on the legislation and it is expected to pass the lower chamber, but given that most of its changes are not eligible to be considered under budget reconciliation, it faces a treacherous path in the Senate.

The Senate will meet today for a ceremonial vote on a resolution (S. Res. 176) recognizing the 50^th anniversary of the reunification of Jerusalem before moving to consideration of presidential nominations and a veterans’ affairs bill. A final roll call vote is expected tomorrow for the nomination of Courtney Elwood to be General Counsel of the Central Intelligence Agency, which is unlikely to draw much opposition from Democrats. A voice vote is also expected on Tuesday for a bill (S. 1094) that aims to improve the accountability of employees at the Department of Veterans Affairs.

A number of important hearings are scheduled for this week, perhaps none more significant than former Federal Bureau of Investigation (FBI) Director James Comey’s planned appearance before the Senate Intelligence Committee on Thursday. His highly-anticipated testimony is likely to focus on conversations with President Trump before he was fired from the FBI post last month. Additionally, Health and Human Services Secretary Tom Price will appear before both the Senate Finance and House Ways and Means Committees on Thursday to defend his agency’s proposed budget for the 2018 fiscal year.

Key Senators Appear Skeptical on Healthcare Reform

As Republican senators trudge forward in their efforts to craft a modified version of the House-passed American Health Care Act (AHCA), for some, the veneer of optimism that was once shared across the conference is starting to fade. The prospect of passing comprehensive healthcare reform on a party-line vote using reconciliation always promised to be a challenging proposition for GOP lawmakers, but the stark reality of reconciling ideological differences over such complex issues – from Medicaid reforms to insurance subsidies and regulations – is coming into clearer focus.

Sen. Richard Burr (R-NC) offered a cynical view of the Senate's outlook on the GOP's health care bill last Thursday, stating that he doesn't think they'll reach a deal on the House-passed plan when the Senate returns from a recess next week. He added that that the bill was "dead on arrival," and said "I don't see a comprehensive health-care plan this year." Majority Leader Mitch McConnell also recently said “I don’t know” how the party would get the needed 50 of the 52 Senate Republicans to pass a healthcare bill under special budget reconciliation rules requiring only a simple majority. Sens. Jeff Flake (R-AZ), Joni Ernst (R-IA), and Pat Toomey (R-PA) have also offered comments portraying doubts as to whether the Senate will pass a healthcare bill this summer.

The public acknowledgment of the challenges ahead – particularly from the typically-measured Majority Leader – are especially notable given the tight timeline that Republicans have to pass the bill. The Fiscal Year (FY) 2017 reconciliation instructions that could allow Senate Republicans to pass a healthcare bill with as few as 50 votes expires on Sept. 30. The Senate will be in session for seven critical weeks in June and July, followed by a five-week recess in August. With must-pass measures on government funding for FY 2018 and a debt ceiling hike looming in September, if a deal is not struck before August, calls for Congress to move on from healthcare to tax reform are likely to grow even louder.

GOP leaders understand the need to work quickly, and are meeting formally at least twice a week to keep negotiations moving forward. Among the most significant of the looming questions: how to improve on the Congressional Budget Office’s (CBO) estimates that 23 million individuals will lose insurance under the plan. If there was one thing to be learned from the House’s healthcare reform process, it’s that a potential deal could materialize very quickly. But given the recent spate of lukewarm comments from the GOP’s rank-and-file, it appears that a skeptical tone is likely to cast a shadow over these discussions in the months ahead.

NIH Announces Joint Initiative on Opioids

The National Institutes of Health last Wednesday announced a joint initiative with pharmaceutical companies to spur the development of drugs to address the opioid epidemic. It will start with a series of private workshops over the next six weeks and focus on three areas. Developing interventions for reversing overdoses was named as the first priority, including stronger, longer-lasting medicines to counteract synthetic opioids. NIH expressed hope, in the long-term, to develop potentially wearable devices that sense an overdose and automatically inject naloxone. Another issue of importance will be in identifying new treatments for opioid addiction.

The NIH is investigating new medications, beyond the three currently available, repurposing and reformulating approved drugs (like lorcaserin), and even vaccines that would spur the production of antibodies against opioids and prevent them from entering the brain. Additionally, the NIH will be seeking non-addictive treatments for chronic pain. The NIH plans to target two separate pain-signaling pathways in hopes of developing an alternative to synthetic opioid medications. They are also researching compounds that target other opioid receptors and ways to formulate drugs so they can't be snorted or injected.

Leaked Regulation Would Expand Exemption to ACA Contraception Coverage Requirements

An unpublished draft circulated last week of a forthcoming HHS interim final rule that would expand an exemption to Affordable Care Act (ACA) contraceptive coverage requirements. The rule, which currently is under review by the Office of Management and Budget, would expand an existing exemption to requirements that employers offer first dollar contraceptive coverage to employees to a broader range of entities who object to such requirements on religious grounds.

The leaked version of the draft regulation would allow any employer to request an exemption based on religious beliefs or moral objections. This would widen the exemption to apply to any company instead of the closely held private organizations permitted under the Hobby Lobby decision. Under the leaked rule, employers also would not have to file notices or certifications of their exemptions, as required by former regulation, but would have to notify employees of any changes through plan documents. The rule would also allow health insurers to refuse to cover contraception for religious or moral reasons.

 

Citing “good cause,” the administration waives notice and comment procedures typically required for rulemaking. HHS says notice and comment is not necessary. The leaked rule does provide for a 60-day comment period, but the rule would be effective immediately upon publication in the Federal Register.

 

Industry Experts ask for Continued CSR Payments, Individual Mandate

 

Last week, the Bipartisan Policy Center (BPC) hosted a panel of health policy experts to discuss possible policy actions to stabilize the insurance marketplaces. Panelists included policy experts from all areas of the health care industry and were insistent that the administration commit to funding cost-sharing reduction (CSR) payments and enforcing the individual mandate in order to stabilize the marketplaces. Additionally, a strong consensus emerged for stabilizing policies that reflect the variability between state marketplaces instead of a “one-size-fits-all” approach. There was also some discussion on enrollment outreach efforts. Insurance companies in about half a dozen states have already filed for premium increases ranging from 6 percent to 58 percent for 2018, citing uncertainty surrounding the new Trump administration's implementation of the health care law. Blue Cross Blue Shield of North Carolina, present on the panel, noted in a filing last week that the likely disappearance of cost-sharing reduction funding was a huge reason for its requested 22.9 percent hike. The federal filing deadline is June 21, and not every state makes the information public early in the process.

 

While the tenor of the panel was bipartisan, broader political forces are driving decisions being made by a Republican-controlled Congress and the Trump administration. The GOP is currently committed to their ongoing efforts to repeal and replace the Affordable Care Act (ACA), and it remains highly uncertain whether they will adopt consensus policies that could improve stability of the Exchange markets. If Senate Republicans ultimately fail to reach consensus on healthcare reform, lawmakers could quickly turn to a more bipartisan approach to fix the insurance markets – in which case, the bipartisan approaches contemplated by the panel may be more relevant.

 

Mylan May Have Overcharged Medicaid By $1.27 Billion

 

Mylan, the producer of EpiPen, may have overcharged taxpayers by as much as $1.27 billion over the past decade for emergency allergy treatment, per a new report by a government watchdog. According to a Department of Health and Human Services (HHS) Office of Inspector General (OIG) report, Mylan classified the EpiPen as a generic drug rather than a brand-name product. Under the Medicaid program, brand-name drugmakers have to provide steep discounts for their products that generic drugmakers don't have to offer. According to the OIG, Mylan improperly classified the EpiPen and then ignored federal regulators when they informed the company that it was the wrong rebate. Sen. Chuck Grassley (R-IA) has made public a copy of a letter from the OIG on the issue. The company allegedly reached a $465 million settlement with the Department of Justice (DOJ) last year over the classification issue, but the DOJ has not confirmed the settlement.