The following LPG Weekly Healthcare Watch provides a summary update of legislative and regulatory healthcare activities from February 16 – February 22. Where available, hyperlinks are included to the relevant documents. Please let us know if you have any questions or would like additional information on the items below.
LEGISLATIVE UPDATE
On February 19, lawmakers launched the “Personalized Medicine Caucus” to expand support and knowledge of the emerging field. Reps. Eric Swalwell (D-CA) and Tom Emmer (R-MN) and Sens. Tim Scott (R-SC) and Kyrsten Sinema (D-AZ) will serve as chairs. The group plans to hold an introductory briefing on February 26.
Senate
On February 18, Sen. Jodi Ernst (R-IA) endorsed the Senate Finance Committee (SFC) drug pricing bill (S. 2543), raising the total number of Republicans who have expressed support for the bill to 12. Chairman Chuck Grassley (R-IA) has said he needs the support of at least 25 GOP senators to bring the bill to the floor. Note that some of the Republicans who expressed support have said that they would not vote for it on the floor unless the inflation penalty measure was removed from the bill – a measure that is considered necessary for Democrat support. Sen. Ernst is also a cosponsor of S. 3129, competing drug pricing legislation that largely reflects the House GOP’s bill.
On February 20, it was reported that Sen. Martha McSally (R-AZ) will introduce drug pricing legislation next week that would allow Medicare to directly negotiate prices of drugs past their patent expiration. Republican lawmakers generally oppose drug price negotiation, and Chairman Grassley has indicated that Sen. McSally’s proposal will not be included in S. 2543. Sen. McSally’s bill also reportedly would cap Part D annual out-of-pocket costs at $3,100 and allow for importation of drugs from Canada.
In the coming weeks, Sens. Michael Bennet (D-CO) and Richard Burr (R-NC) plan to introduce legislation to unite in vitro diagnostic and laboratory tests under one regulatory framework. Reps Larry Bucshon (R-IN) and Diana DeGette (D-CO) will introduce companion legislation in the House. The measure builds off of legislation drafted by Rep. DeGette in the 115th Congress.
The Senate stands in recess until February 24.
House
On February 21, it was reported 76 House lawmakers sent the Centers for Medicare & Medicaid Services (CMS) a letter requesting a unique Medicare Severity Diagnosis Related Group (MS-DRG) for CAR-T therapy under the Medicare Hospital Inpatient Prospective Payment System (IPPS). CMS currently applies a temporary New Technology Add-on Payment (NTAP) for inpatient CAR-T therapy administration, but the NTAP is scheduled to expire on October 1, 2020. Absent a permanent payment mechanism, the lawmakers claim hospitals will face “a reimbursement cliff” that will block patient access. The letter was led by Reps. Roger Marshall (R-KS), Suzan DelBene (D-WA), Tom O'Halleran (D-AZ), and Bucshon.
The House stands in recess until February 25.
REGULATORY UPDATE
On February 18, the Biomedical Advanced Research & Development Authority (BARDA) announced a joint partnership with Sanofi to develop a coronavirus vaccine. Johnson & Johnson is also partnering with BARDA to develop a vaccine and treatment options, while Moderna Therapeutics is working alongside the National Institutes of Health on a vaccine.
On February 18, 338 Americans were evacuated from the Diamond Princess cruise ship off the coast of Japan. Most of these individuals have not contracted the virus and have been placed in a two-week quarantine at U.S. military bases; however, reports suggest the State Department allowed 14 infected citizens to return on the evacuation plane – against the advice of the Centers for Disease Control & Prevention (CDC). These patients are being treated at U.S. hospitals. Rep. Phil Roe (R-TN) played a pivotal role in evacuating the Americans before the end of Japan’s two-week quarantine. In addition, 44 Americans tested positive for the virus while on the cruise and have been receiving treatment in Japanese hospitals. At least 10% of the 3,700 passengers and crew aboard the ship have been diagnosed with coronavirus. Two elderly Japanese citizens that contracted the virus on the cruise died on February 20.
On February 18, the World Health Organization announced there have been 92 reports of human-to-human transmission of the coronavirus across 12 countries outside of China.
On February 18, researchers at the Chinese Centers for Disease Control & Prevention suggested that the coronavirus is more contagious than SARS and MERS, in part because asymptomatic individuals can transmit the disease.
On February 20, it was reported that 50 House Democrats plan to ask the Trump administration not to grant drug manufacturers monopoly rights for a coronavirus vaccine. The group, led by Rep. Jan Schakowsky (D-IL), wants the Administration to “use every tool” necessary to ensure the vaccine is affordable and, in turn, accessible.
On February 21, the CDC confirmed 34 domestic cases of the coronavirus.
On February 20, Food & Drug Administration (FDA) Commissioner Stephen Hahn added Jeet Guram and Tim Solberg to his team of top advisors. Guram, a senior advisor at CMS, will work on drug and tobacco issues. Solberg, a former professor at the University of California San Francisco (UCSF), will focus on medical devices.
On February 20, FDA released a final rule defining a “biological product” that brings the agency’s definition of a biological product in line with the definition under the Biologics Price Competition and Innovation Act (BPCIA) of 2009. The effective date of the rule (March 23) coincides with the date that all proteins that are currently regulated as drugs will transition to biologics – opening them up to competition from biosimilars and interchangeable products. According to the FDA, “The availability of approved biosimilar and interchangeable insulin products is expected to increase patient access, adding more choices and potentially reducing costs of insulin products.”
On February 20, Premier sent the Center for Medicare & Medicaid Innovation (CMMI) a letter requesting greater detail on the new Direct Contracting Model. The provider group claims that “certain aspects of the model are still unknown, such as how CMS plans to adjust the Medicare Advantage rate book for regional benchmarking or risk adjust the benchmark.” They also propose creating additional opportunities for shared savings and reducing the withhold amount.
On February 20, CMS proposed extending CMMI’s Comprehensive Care for Joint Replacement model for another three years, as well as updating episode definition and pricing. CMMI projects the proposed changes would save $269 million for the federal government over three years.
On February 20, CMS released the tentative agenda for the ICD-10 Coordination and Maintenance Committee Meeting that will be held on March 17-18. The meeting will discuss new ICD-10-PCS (procedure) and ICD-10-CM (diagnosis) codes under consideration. The tentative agenda for new ICD-10-PCS codes, including those for new technologies applying for NTAP under IPPS, can be found here. The tentative agenda for new ICD-10-CM codes can be found here.
RULES AT THE WHITE HOUSE OFFICE OF MANAGEMENT & BUDGET (OMB)
Pending Review
HHS-CMS
Conditions for Coverage for End-Stage Renal Disease Facilities—Third Party Payments (CMS-3337-P); Proposed Rule; Received 6/6/2019
International Pricing Index Model for Medicare Part B Drugs (CMS-5528-P); Proposed Rule; Received 6/20/2019
Medicare Coverage of Innovative Technologies (CMS-3372-P); Received 7/30/2019
Medicaid & CHIP Managed Care (CMS-2408-F); Final Rule; Received 9/26/2019
Interoperability and Patient Access (CMS-9115-F); Final Rule; Received 9/26/2019
Strengthening the Program Integrity of the Medicaid Eligibility Determination Process (CMS-2421-P); Proposed Rule; Received 12/20/2019
Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value Based Payments (VBP) for Drugs Covered in Medicaid (CMS-2482-P); Proposed Rule; Received 12/27/19
Hospital Inpatient Prospective Payment Systems for Acute Care Hospitals; the Long-Term Care Hospital Prospective Payment System; and FY 2021 Rates (CMS-1735); Proposed Rule; Received 1/30/2020
Strengthening Oversight of Accrediting Organizations (AO) and Preventing AO Conflict of Interest, and Related Provisions (CMS-3367); Proposed Rule; Received 2/18/2020
SHHS-FDA
Institutional Review Boards; Cooperative Research; Proposed Rule; Received 10/31/2019
The “Deemed to Be a License” Provision of the Biologics Price Competition and Innovation Act: Questions and Answers; Guidance for Industry; Availability; Notice; Received 2/20/2020
HHS-OIG
Civil Monetary Penalties Law Notice of Proposed Rulemaking; Proposed Rule; Received 1/23/2020
HHS-ONC
21st Century Cures Act: Interoperability, Information Blocking, and the ONC Health IT Certification Program; Final Rule; Received 10/28/2019
HHS-HRSA
Reimbursement of Travel and Subsistence Expenses toward Living Organ Donation Program Eligibility Guidelines; Notice; Received 11/8/2019
REPORTS
Government Accountability Office (GAO)
On February 19, GAO released a study entitled National Biodefense Strategy: Additional Efforts Would Enhance Likelihood of Effective Implementation. The report examines how well the National Biodefense Strategy has worked so far. GAO found no clear processes, roles, or responsibilities for joint decision making between multiple federal agencies and private sector partners, as well as no documented methodology for how data should be analyzed to identify gaps and opportunities. GAO made several recommendations to address the fragmented nature of the federal and nonfederal resources inherent to the Strategy. Congress directed GAO to conduct the study as part of the National Defense Authorization Act for FY 2017.
HHS Office of Inspector General (OIG)
On February 20, the HHS OIG released a report entitled Michigan Made Capitation Payments to Managed Care Entities After Beneficiaries’ Deaths. OIG estimates that Michigan made unallowable capitation payments of at least $39.9 million ($27.5 million federal share) to managed care entities on behalf of deceased beneficiaries between January 1, 2014 and December 31, 2016. The Agency recommends for Michigan to refund the federal share payment and recover unallowable payments made to managed care entities.
UPCOMING HEARINGS
Senate
Appropriations Labor, Health & Human Services (HHS), Education & Related Agencies Subcommittee
February 25, 10:30 a.m., 124 Dirksen Senate Office Building
Secretary Alex Azar will be the sole witness.
HELP Committee
March 3, 430 Dirksen Senate Office Building
An Emerging Disease Threat: How the U.S. Is Responding to COVID-19, the Novel Coronavirus
Details will be forthcoming.
House
Energy & Commerce Health Subcommittee
February 26, 1:30 p.m., 2123 Rayburn House Office Building
Proposed FY 2021 HHS Budget and Oversight of the Coronavirus Outbreak
Secretary Azar will be the sole witness.
Appropriations Departments of Labor, HHS, Education & Related Agencies
February 26, 9:30 a.m., 2358-C Rayburn House Office Building
Secretary Azar will be the sole witness.
Appropriations Agriculture, Rural Development, FDA & Related Agencies Subcommittee
February 27, 11:00 a.m., 2362 Rayburn House Office Building
Sue Murrin, HHS OIG Deputy Inspector General for Evaluation & Inspections, will be the sole witness.
Foreign Affairs Asian, the Pacific & Nonproliferation Subcommittee
February 27, 2:00 p.m., 2172 Rayburn House Office Building
Coronavirus Disease: the U.S. and International Response
Ian Brownlee, Principal Deputy Assistant Secretary, Bureau of Consular Affairs, State Department; Jonathan Fritz, Deputy Assistant Secretary, Bureau of East Asian & Pacific Affairs, State Department; William A. Walters, Executive Director and Managing Director for Operational Medicine, Bureau of Medical Services, State Department; and Robert Redfield, Director, CDC.
Ways & Means Committee
February 27, 10:00 a.m., 1100 Longworth House Office Building
Secretary Azar will be the sole witness.
OTHER HEALTH POLICY NEWS
On February 18, UCSF sent Secretary Azar a letter endorsing the proposed interoperability rule issued by the Office of the National Coordinator for Health IT (ONC). Their support is notable as most large providers have generally expressed caution with the rule. UCSF writes that “standardized API access to health data will help patients and providers manage care more effectively and achieve better health outcomes.”
On February 18, civil rights activist Rev. Al Sharpton sent a letter to the Congressional Black Caucus and House Leadership criticizing the E&C-HELP “surprise billing” proposal, which relies on a federal benchmark to resolve most payment disputes between payers and providers. Rev. Sharpton believes the measure would “require patients and doctors to sort out [surprise bills] together – effectively cutting insurance companies out of paying for them.” Since black Americans are more likely to receive high medical bills, he argues the legislation “protects Big Insurance companies at the expense of black patients and the medical care they rely upon.”
On February 18, the American Action Forum (AAF) published a report that concludes the total cost of paid and unpaid long-term care could double over the next decade as the “baby boomer” generation ages and rates of chronic conditions climb. Specifically, AAF estimates about 24 million patients will require long-term care by 2030 at a cost of between $1.3 trillion to $2.5 trillion, up from $849 billion in 2018.
On February 19, Politico and the Harvard T.H. Chan School of Public Health released survey results showing that reducing health care and prescription drug costs rank as voters’ top priorities, regardless of political affiliation. About 80% of the survey respondents ranked “taking steps to lower the cost of health care” as “extremely” or “very” important, including 89% of Democrats and 76% of Republicans. Furthermore, 75% of those surveyed (85% of Democrats and 69% of Republicans) ranked “taking steps to lower prescription drug prices” as extremely or very important. To compare, implementing a Medicare buy-in or Medicare for All ranked sixth and 10th, respectively, among the 22 issues survey respondents were asked to prioritize.
On February 19, Oscar Health announced it will lower members’ out-of-pocket costs for a one-month supply of 100 common drugs to $3 in an effort to boost medication adherence. The “$3 drug list” represents 90% of the use cases that a patient may need a prescription for and Oscar plans to include even more drugs next year. The list applies to individual member plans residing outside New York, New Jersey, and California and is unavailable for catastrophic plans, small group plans, and Medicare.
On February 19, California Gov. Gavin Newsom (D) proposed spending $3.5 billion to expand Medicaid services and to use the program for social supports, such as housing. Gov. Newsom hopes his Medi-Cal overhaul will steer patients away from costly visits to nursing homes, the emergency room, and jail cells.
On February 19, the American Society of Clinical Oncology released a position statement endorsing repository programs for oral cancer medications, if maintained within a closed system. Their statement also outlines how these donation and reuse programs should be implemented to ensure patient safety. Thirteen states currently have drug repository programs.
On February 20, the New Mexico legislature unanimously passed a bill to create a drug importation program. Gov. Michelle Lujan Grisham (D) is expected to sign it. Vermont, Colorado, and Florida have passed similar legislation. These state drug importation programs are contingent on the Trump administration finalizing the proposed importation rule and approving each state program.
On February 21, Altarum released their latest health care spending projections. According to their findings, overall health care spending climbed 5.7% in December 2019 – the highest growth rate since August 2015. During this period, spending on prescription drugs grew the fastest (11.7%) and growth in spending on physician and clinical services was the slowest (2.9%). Throughout 2019, they estimate health spending increased 4.9%, compared to a GDP growth rate of just 2.1%. Lastly, Altarum claims annual health spending reached $3.92 trillion in 2019.
On February 21, it was reported that Oklahoma Gov. Kevin Stitt (R) is considering expanding Medicaid this July, before the state applies for the Trump administration’s “Healthy Adult Opportunities” block grant proposal.
On February 21, the Supreme Court held a private meeting to determine whether and when it will consider Texas v. Azar (the lawsuit challenging the constitutionality of the ACA).
On February 21, oncologist Peter Bach wrote an op-ed in the Boston Globe arguing the recent decline in cancer deaths is not due to better treatments, but rather a rise in deaths linked to poverty, obesity, addiction, and depression.
On February 21, former MedPAC Director Mark Miller posted a New York Times op-ed arguing the rise in MA enrollment may be benefiting plans more than patients.
On February 21, the U.S. 3rd Court of Appeals reinstated Walgreen Co; Kroger Co. v. Johnson & Johnson; Janssen Pharmaceuticals, an antitrust suit terminated by a lower court. The pharmacies have accused Johnson & Johnson of using anticompetitive practices to incentivize payers and providers to favor Remicade over its biosimilar counterpart Inflectra.
The “Bayh-Dole 40” publicly launched this week. The coalition intends to preserve the original intent of the Bayh-Dole Act of 1980, which created a pathway for the government to transfer its patents on inventions to private entities for commercialization. Forty years after its enactment, the group claims the law is facing “imminent threats” that jeopardize the productivity of U.S. medical research. Specifically, they believe the law’s “march-in rights” may be used inappropriately by lawmakers eager to lower drug prices.