TRP Health Policy Report

The Week in Review

President-elect Donald Trump announced his choices for three more positions within his administration last week: South Carolina Gov. Nikki Haley is to be U.S. Ambassador to the United Nations; Republican donor and school choice activist Betsy DeVos is to be Secretary of Education; and Trump campaign attorney Donald McGahn is to be White House counsel. While it has yet to be formally announced, pediatric surgeon and former presidential candidate Dr. Ben Carson has widely been reported as the likely choice to head the Department of Housing and Urban Development (HUD). Finally, Mitt Romney and Rudy Giuliani are considered the top picks to head the State Department, with Trump’s advisers reportedly divided between the two due, in part, to Romney’s outspoken criticism of the President-elect during the campaign. 

Congress was on recess last week for the Thanksgiving holiday. No legislative action is expected in either chamber until Tuesday, when lawmakers will return for a final few weeks before closing the books on the 114^th Congress. Lawmakers are currently slated to break for the year on Dec. 16.  

The Week Ahead

Funding the government and boosting health research will replace food and football as top priorities for lawmakers this week as they return to Washington from the Thanksgiving holiday. A stopgap bill funding the government through March is currently being hashed out, with negotiators working through issues such as ensuring the continuity of defense contracts and including a provision for President Obama to begin collecting his pension after leaving office in January.

The highlight of this week is likely to be the long-awaited passage of the 21^st Century Cures bill, a new version of which was released on Friday. A vote is expected on the bill in the lower chamber this week, after which it would be sent to the Senate without amendment. Full details on what should be the final iteration of the Cures package is included in our roundup below. House lawmakers will also take another swing at the Dodd-Frank financial reform law by considering a bill (H.R. 6392) this week that would alter Dodd-Frank’s provisions regulating bank holding companies and setting a higher standard for banks to qualify for more stringent supervision from federal regulators.

House Releases Final Version of 21^st Century Cures Act; Vote Expected Wednesday

Late Friday after Thanksgiving, House lawmakers released a revamped 21st Century Cures bill representing many months of on-again/off-again negotiations involving $4.8 billion in new investment for research at the National Institutes of Health (NIH) and a smattering of pro-innovation FDA reforms related to drug and device regulation. The compromise is a result of a tenacious effort by bill sponsors – most notably House Energy & Commerce Committee Chairman Fred Upton (R-MI) – who have been pushing for well over a year to push the measure over the legislative finish line. The bipartisan bill is expected to finds its way to the House floor for a vote on Wednesday, and marks one of the last pieces of legislative business for the 114th Congress and President Obama. The Senate is expected to take it up without amendment before adjourning at the end of the year.

As expected, the revamped Cures bill also includes a mental health measure based largely on language previously introduced by Rep. Tim Murphy (R-PA), though it was been scaled down from its original, more sweeping version. The measure also includes provisions from a bipartisan Senate mental health bill designed and introduced by Sens. Chris Murphy (D-CT) and Bill Cassidy (R-LA). The mental health section establishes a new assistant secretary for mental health in the Department of Health and Human Services as well as a chief medical officer. The bill also authorizes grants for areas like suicide prevention. 

From a procedural perspective, the bills were combined into a single package and slipped into the shell of a suspender measure that already passed both chambers, thus enabling both the House and Senate to expedite consideration of the legislation. A final deal is not completely sewn up, though, according to a senior Democratic aide, who said that talks remain ongoing among congressional leadership. But the prospects for passage are very high.  

The bill’s price tag is offset in part by eliminating $3.5 billion from the Affordable Care Act’s Prevention and Public Health Fund, which came over the opposition of many Democrats. The bill also raises some money by selling oil from the Strategic Petroleum Reserve. 

Schumer, Pelosi Call on Obama Administration to Halt Part B Demo

A pair of top Democratic leaders are calling on the Obama administration to withhold final regulations on the Medicare Part B Drugs Payment Model, potentially dealing a knockout blow to the administration’s preeminent foray into the drug pricing debate. As Politico first reported and TRP has independently confirmed, House Minority Leader Nancy Pelosi (D-CA) and incoming Senate Minority Leader Chuck Schumer (D-NY) held a call with administration officials Thursday, November 18th, in which they asked that the Centers for Medicare and Medicaid Services (CMS) refrain from moving forward on the demonstration.

The administration’s proposal to test alternative reimbursement policies for drugs administered in physicians’ offices was already on shaky ground after this month’s elections, which will leave Republicans in control of both chambers of Congress and the White House in the 115th Congress. If CMS were to release a final rule during the final two months of the Obama administration, Congress could utilize their powers under the Congressional Review Act (CRA) to overturn the rule quickly after President-elect Trump takes office.

Republicans and even some Democrats in Congress have objected to the proposed demonstration, arguing that it could limit patient access to certain drugs, is too large in scope, and could harm independent, small and rural physician practices. Many pharmaceutical stakeholders, doctors, and some consumer groups have opposed the demonstration, and will likely point to it as evidence for why Congress should consider curbing the wide-ranging authority of the Center for Medicare and Medicaid Innovation (CMMI) in 2017.

Republicans Introduce Legislation to Block ACA Risk Corridors

Sen. Ben Sasse (R-NE) announced in a statement last week that he had introduced legislation aimed at blocking the Obama administration from distributing additional funding to insurers as part of the Affordable Care Act’s (ACA) “risk corridor” program. Under this program, marketplace insurers paid into a fund, then the administration redistributed that money to companies that lost funding on the exchanges. Its purpose, according to supporters, is to help insurers adjust to the new marketplace created by Obamacare. But the program didn’t bring in as much money as expected, and insurers that haven’t received the funding the say they are owed have now sued the administration to recover that money.

A group of Congressional Republicans have backed the bill, introduced in the House by Rep. Morgan Griffith (R-VA), and have raised concerns that the Obama administration could get around restrictions on using other funds for the program by simply settling with the insurers that have sued, effectively keeping the program in operation. This new bill would prohibit the administration from using the “Judgement Fund” to pay out any settlements. The Obama administration has suggested it is open to agreeing to settlements, but has also sought to have the lawsuits dismissed.

House GOP Looks to Freeze Health Care Spending Lawsuit

Last Monday, House Republicans asked a federal appeals court to freeze the lawsuit they filed against the Obama administration over appropriations in the 2010 health care law until after President-Elect Donald Trump’s inauguration. Lawyers for the House filed for the stoppage after deciding there is “a significant likelihood of a change” in a Trump administration strategy to the situation. Trump’s transition officials “are discussing potential options for resolution of this matter” to take effect after the January 20 inauguration, the House lawyers said. The government has not agreed to such a pause.

The Obama administration has fought the case all the way to the U.S. Court of Appeals for the D.C. Circuit, defending President Barack Obama’s signature legislative accomplishment. The lawmakers initially sued the administration in 2014 to stop what they called executive overreach, particularly the spending of $175 billion over 10 years without congressional approval to reimburse insurers. House Republicans won initially when a judge ordered the Obama administration to stop making the payments. But that order was placed on hold as the Justice Department appealed the case to the D.C. Circuit, where briefs are still being filed. It’s not clear if a Trump administration would have to immediately stop making the payments to insurers if it drops the appeal.

Senate Judiciary to Consider Subpoenaing Witnesses for EpiPen Hearing

After the Centers for Medicare & Medicaid Services (CMS), the Justice Department, and Mylan failed to send witnesses to testify before the Senate Judiciary Committee, Chairman Sen. Grassley (R-IA) is considering subpoenaing witnesses to testify at a now-delayed hearing on the supposed settlement over Medicaid rebates for EpiPen between the Justice Department and drug manufacturer Mylan. Mylan was the most recent of the three to turn down the invitation to testify, leaving an HHS Inspector General official as the lone witness, and Sen. Grassley's spokesperson said the hearing will be rescheduled to give the chair time to hold a committee meeting to consider subpoenas.

After Mylan declined to testify, Grassley asked the Securities and Exchange Commission whether it is investigating whether the company misled investors by announcing a settlement with the Justice Department over the alleged misclassification of EpiPens as a generic in the Medicaid rebate program. The accusation is based on an October 7^th announcement by Mylan that the company had reached a settlement with the Justice Department in which Mylan went as far as detailing some terms of the deal and provided a settlement amount of $465 million. Sen. Grassley is suspicious of the administration's handling of EpiPen's Medicaid rebates, and blamed Mylan’s inability to provide a witness on the Justice Department and CMS, claiming they jointly gave Mylan an “out.”