TRP Health Policy Report
May 4, 2015Last week, Congress opened debate on an Iran nuclear deal, created a unified budget blueprint, passed two appropriations bills and introduced legislation to repeal the ‘Cadillac Tax.’ Senate Majority Leader Mitch McConnell (R-KY) has brought to the Senate floor an Iran nuclear bill for amendment consideration. Separately, the House passed a Republican Party budget blueprint by a vote of 226-197. The legislation sets the funding priorities for Congress in 2016. The budget calls for cutting $5.3 trillion to balance federal receipts and expenditures over nine years. It would also provide Congress with the ability to use reconciliation procedures to circumvent filibusters by Senate Democrats to pass policy changes, which could include a repeal or revision to the Affordable Care Act (ACA). Further, the House passed the first two spending bills for FY 2016—Energy and Water Development and Military Construction-Veterans Affairs—by a vote of 240 to 177 and 255 to 163 respectively. The President has issued a veto threat for both pieces of legislation. House Democrats also unveiled legislation to repeal the ACA’s "Cadillac tax" on high-cost healthcare plans. Lawmakers argue that the tax unfairly targets individuals who live in more costly regions of the U.S., such as the Northeast and the west coast.
The Week Ahead
This week, the House is in recess and will return on Tuesday, May 12th. The Senate is expected to take up a House-passed conference report on the budget resolution and continue debate on an Iran nuclear deal. The chamber plans to take up the House-adopted conference report, which would set discretionary spending in 2016 at the budget cap level of $1.016 trillion, and boost defense funding levels to $96 billion. The Senate will also move forward with the Iran nuclear legislation, which is expected to go through an open amendment process. Matters could be complicated if Sen. Tom Cotton (R-AR) and Sen. Marco Rubio (R-FL) implement a procedural maneuver to force Sen. Majority Leader McConnell to schedule a vote on an amendment requiring Iran to recognize Israel’s right to exist as part of any nuclear deal. Lastly, the Senate will attempt to override President Obama’s veto of a resolution that would strike down a National Labor Relations Board (NLRB) rule to speed up union-representation elections.
21st Century Cures Picks up Steam in the House and Senate
On Wednesday, House Energy and Commerce Committee Chairman Rep. Fred Upton, (R-MI) and Rep. Diana DeGette (D-CO) released an updated draft of the 21st Century Cures initiative legislation. The bipartisan initiative seeks to overhaul the government's evaluation of medical products and includes major reforms to the Food and Drug Administration (FDA) as well as the National Institutes of Health (NIH). Specifically, the bill would reform the government’s rules for clinical trials, create new incentives for drug companies to study rare diseases and focus on patient data and electronic health records. The updated draft also authorizes at least $31 billion to be appropriated annually for the NIH in fiscal years 2016, 2017 and 2018. The new authorization levels are an increase over current NIH funding levels of $30 billion for fiscal year 2015.
With the recent flurry of activity, the House convened a hearing this week to examine the new draft. Members from both sides of the aisle praised the work of the Committee to move the initiative forward, though stressed that unresolved issues remain in the latest draft legislative iteration, including funding adequacy issues relative to FDA and NIH, as well as issues concerning the inoperability of electronic health records (EHRs), among others. It is expected that the House will mark-up a 21st Century Cures bill sometimes this year. Separately, the Senate also held an exploratory hearing on the issue asking officials from FDA and NIH to offer ideas on how to speed up the discovery and approval of new medicines. Sen. Lamar Alexander (R-TN) and Sen. Patty Murray (D-WA) will be leading the Senate’s efforts to help new cures reach market faster.
CMS Releases Vault of Drug Spending Data
On Thursday, the Centers for Medicare and Medicaid Services (CMS) released a report on the top 10 most-used drugs and expensive drugs in the Medicare Part D program for 2013. CMS found that the 10 most-used drugs were all generics and the 10 most-expensive drugs were all brand-name drugs. The study includes data on the number of prescriptions and refills and the total cost paid by Part D beneficiaries. According to the report, CMS spent $103 billion on medication for Part D beneficiaries in 2013, assisting 36 million Medicare beneficiaries. The new information by CMS seeks to increase transparency about the program and help better understand the patterns of more than 1 million health care providers who prescribed more than 3,000 distinct drug products to Medicare Part D beneficiaries.
Republicans Debate King v. Burwell Response
Congressional Republicans have begun formulating their response to a potential favorable ruling in the landmark Supreme Court case, King v. Burwell. The Supreme Court will decide whether ACA subsidies can be provided to individuals who purchased insurance through federally established healthcare exchanges in states that did not create their own. If the court strikes down the federal exchange subsidies, the ruling would eliminate about $28.8 billion in subsidies to 9.3 million individuals in 34 states.
Currently, House and Senate Republicans are considering at least four different legislative proposals. The common theme throughout all of the proposals is to provide some kind of temporary assistance to individuals who would lose their subsidies. According to senior aides, Republicans would be willing to compromise with the President to ensure that the 7.5 million people who would lose their subsidies are protected. Under the proposed Republican compromise, individuals would be allowed to maintain their coverage if the President repeals the employer and individual mandates for insurance coverage. Although there appears to be a general consensus among Republicans, some conservative lawmakers propose a full repeal of the ACA through the budget reconciliation process, which require only a 50 votes threshold and prevent a Democratic led filibuster. Republican Leadership, however, prefers a fix in the event the Supreme Court rules in favor of King. The Supreme Court is expected to release a decision by the end of June.