Washington Healthcare Update

March 19, 2018

Pardon Our Dust

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This Week: President’s budget released and hearings begin … health care spending expected to rise … and the FDA releases guidance for neurological drug development.

1. Congress


2. Administration

3. Courts

1. Congress


Omnibus Bill Consideration Delayed

The House had planned to take up the Omnibus spending bill the week of the 12th in order to give the Senate plenty of time to consider the bill before the March 23 deadline. Because of wrangling over more than 100 potential riders, consideration was delayed. 

The drug industry is pressing on in its quest to undo a multibillion-dollar cut in the budget deal that would force pharma to pick up more of the tab for prescription spending in the Medicare doughnut hole.  It is also unclear at this writing if a package of stabilization measures for health exchanges will be put in place.  Abortion language had hampered negotiations.

However, House Republicans are expected to meet late Monday to go over the omnibus and the package may be released at that time.  The government lacks funding after Friday, Mar. 23, so it is important that the Omnibus be passed by then to avoid another government shutdown.

Right to Try Legislation Fails to Pass

On March 13, the House failed to pass under suspension of the rules the revised Right to Try legislation Energy & Commerce Committee leaders unveiled on March 11. The final vote tally, 259-140, was not enough to secure the two-thirds majority needed to pass a bill under suspension. However it is anticipated that sponsors of the bill will push for another vote.

The legislation was unveiled the weekend before the vote after weeks of negotiations with the Food and Drug Administration, Energy and Commerce Committee members and patient advocates.

These negotiations made a number of changes to Sen. Ron Johnson’s (R-WI) Right to Try bill (S.204) that passed the Senate unanimously. Changes included a new definition for which patients qualify, requiring drug companies to notify FDA within seven days of providing the medicine and immediate notification of any adverse events. Another key change is that the bill limits what companies can charge for investigational drugs. Over 80 patient and provider groups wrote to the House in opposition to the bill in its modified form.

Energy and Commerce Democrats Oppose Lifetime Coverage Limits on Medicaid Beneficiaries

In a letter to HHS Secretary Azar, all 24 Democrats on the House Energy and Commerce Committee wrote that state proposals to impose lifetime coverage limits on Medicaid beneficiaries are “outside the statutory objectives for the Medicaid program” and should be rejected by CMS. The letter was sent March 8. Five states—Arizona, Kansas, Maine, Utah and Wisconsin—have 1115 waiver requests pending before CMS to cap the amount of time that some beneficiaries can remain in the Medicaid program. No state has enacted lifetime limits in Medicaid. Azar declined to take a position on the issue when asked about it during a hearing last month before the Energy and Commerce Committee.

The letter said the details of the state waiver proposals do not matter, because any lifetime cap on Medicaid benefits would be illegal. State Medicaid waivers must serve the objectives of the Medicaid program, according to statute. Democrats have said that other waivers the administration has approved on work requirements don’t meet the program’s objectives, either.

Pallone Asks for Hearings on Consolidation 

House Energy and Commerce ranking member Frank Pallone (D-NJ) is requesting a hearing on Cigna’s proposed plan to acquire Express Scripts for $67 billion, as well as the proposed $69 billion plan for CVS to acquire Aetna. In a letter to Chairman Greg Walden (R-OR) sent today, Pallone expressed concerns about the “ongoing trend of consolidation” in the health care system.

2. Administration

CMS Names Ombudsman

CMS has named James Bailey its Medicare pharmaceutical and technology ombudsman, a role created under the 21st Century Cures Act. The position is to improve customer service and innovation in Medicare. Bailey in this role “will receive, and look into, concerns and questions from pharmaceutical, biotechnology, medical device, diagnostic product manufacturers and other stakeholders regarding Medicare coverage, coding and payment for products already covered or for which coverage is being sought,” CMS said.

FDA Seeks Public Feedback on Setting Nicotine Levels

The FDA is seeking public comment ahead of a proposed rule to set a maximum nicotine level in cigarettes for the first time, to make them less addictive. In a statement issued March 15, FDA Commissioner Scott Gottlieb said lowering nicotine levels will make it harder for future generations to become dependent on cigarettes and make it easier for current smokers to quit or switch to less harmful products.

In the advance notice of proposed rulemaking issued March 15, the FDA said it is particularly interested in comments about the merits of nicotine levels at 0.3, 0.4 and 0.5 milligrams of nicotine per gram of tobacco filler.

The nicotine rule is one of a number of tobacco-related regulations FDA is working on. The agency will soon seek comment on the role that flavors like menthol play in tobacco use, and get feedback and data concerning the possible regulation of premium cigars. The FDA is also working to modernize its approach to the development and regulation of nicotine replacement products like gum and patches.

On the nicotine limit, the FDA is seeking comment on whether a maximum level should be implemented at once or gradually. The FDA also wants to know about unintended consequences, such as the potential for an illicit cigarette market.

The FDA was given the authority to regulate nicotine levels under the 2009 Tobacco Control Act.

Presidential Advisory Panel on Cancer Makes Recommendations

The President’s Cancer Panel advises in a lengthy report that policymakers must develop better ways to pay for cancer medicines as treatment costs continue to escalate. Drugs should be paid for based on how well patients respond to them, rather than let manufacturers set prices and negotiate discounts with middlemen. Doctors should also be encouraged to use high-value drugs through different payment models.

Costs of cancer drugs have increased from more than $54,000 in 1995 to more than $200,000 in 2013 with no sign of slowing, according to the report.

The advisory panel also recommended providing better information to patients about drug costs during treatment, increasing competition through biosimilars and other generic drugs, and boosting resources for FDA and biomedical research funding.

The report comes about a month after HHS outlined some steps that could bring down drug costs for patients and the government. The department’s budget recommended shifting some physician-administered drugs—including many cancer drugs—from Medicare Part B into Part D, where insurers can use formularies and negotiations to lower drug costs. HHS also suggested cutting payments for new physician-administered treatments in Part B.

The three-member advisory panel, funded by the NIH’s National Cancer Institute, met over the last two years to develop the recommendations.

3. Courts

Judge Rejects Massachusetts Case to Stop Contraception Rule

A federal judge in Boston Tuesday rejected Massachusetts’ bid to stop a Trump administration rule allowing virtually any company to seek an exemption to the Affordable Care Act’s contraception mandate on religious or moral grounds.

District Court Judge Nathaniel Gorton, a former President George H.W. Bush appointee, found Massachusetts failed to prove it or its residents would be harmed by the rule.

Massachusetts Attorney General Maura Healey filed a lawsuit immediately after the Trump administration issued the new rule in October. The rule vastly broadens exemptions to Obamacare’s birth control mandate, which generally requires employers to cover FDA-approved contraception at no cost to the woman.

In December, federal judges in California and Pennsylvania agreed to preliminary injunctions, which temporarily blocked the rule from going into effect while the states’ lawsuits continue through the courts.

If you have any questions, contact the following individuals atMcGuireWoods Consulting:

StephanieKennan, Senior Vice President
Anne Starke, Research Associate

Founded in 1998,McGuireWoods Consulting LLC(MWC) is a full-service public affairs firm offering infrastructure andeconomic development, strategic communications & grassroots, and governmentrelations services. McGuireWoods Consulting is a subsidiary of theMcGuireWoods LLPlaw firm and has been named in The National Law Journal’s special annualreport, “The Influence 50,” for the past several years. In the most recentreport, McGuireWoods Consulting was ranked 15th of the 1,900 governmentrelations firms in Washington, D.C.

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