As Washington speeds towards Election Day on November 8th, it is a good time to examine the status of the key legislative and policy issues impacting the healthcare and life sciences sectors. Congress has few legislative working days remaining in 2016, but could make some headway on legislation to promote innovation as well as prevent certain rulemakings like the Medicare Part B demonstration project. In addition to closing out existing priories, Congress will turn its attention to new and recurring issues such as increasing the amount of generic drugs. Here is an overview of what’s left to be done this year during the “lame duck” session that begins in mid-November and what is on the horizon for 2017.
21st Century Cures: Congress’s signature effort to dramatically change the regulatory process for biomedical research and innovation remains stalled, but there are signs of life. For months, the main point of contention has been the amount of funding for research at the National Institutes of Health. Senate Democrats have held firm that the amount included in the House of Representatives-passed version, $8.75 billion over ten years, is not sufficient. Health, Education, Labor and Pensions Committee leaders Lamar Alexander (R-TN) and Patty Murray (D-WA), working closely with House Energy and Commerce Committee Chairman Fred Upton (R-MI), appear to be close to crafting a compromise in order for a bill to reach the Senate floor.
Even if a compromise on funding is reached, there will also have to be an agreement on including or excluding controversial issues such as controlling rising drug costs. Drug pricing has been a high profile issue for much of 2016, and progressive Senators including Bernie Sanders (I-VA) and Elizabeth Warren (D-MA) have sent signals that they would like the legislation to include measures to curb pricing such as public disclosure of pricing decision making.
House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) have announced that they have prioritized passage of 21st Century Cures when Congress returns in November.
Mylan fallout/drug pricing: The drumbeat about cost of drugs will continue to escalate to and beyond Election Day. Indeed, the Democratic nominee for President Hillary Clinton addressed the issue in a policy plan released earlier this month. The Mylan EpiPen pricing story has added grist to the pricing debate mill. In the wake of details about the price of EpiPen auto injectors rising from $100 to $600 since 2007, members of Congress have called for hearings, investigations, and additional regulations. In response, there have been hearings before the House Oversight and Government Reform and Judiciary committees. Leaders of the House Energy and Commerce and Ways and Means Committees, as well as the Senate Permanent Select Committee on Aging have hinted that additional hearings are possible this year. These hearings have honed in on the decision to price EpiPens, competition for epinephrine delivery devices, and discounts provided to schools. Beside the hearing, the its notable the number of letters sent by members of Congress to Mylan’s regulators and enforcement agencies including DOJ, FDA, HHS and the FTC. The questions raised during the Mylan inquiry echo those raised for other prescription drugs. Therefore, it pays to keep an eye on signals coming from policymakers and advocates, as Mylan may become the proxy for a larger conversation on ways to address pricing in 2017.
History Sidebar: When Democrats took control of the House of Representatives in 2006, leadership created a “100-hour” legislative agenda that included repealing the provision in Medicare Part D that precludes the government from negotiating directly with pharmaceutical companies over drug prices.
Generics: Perhaps the most significant attempt to increase competition from generic drugs is the Creating and Restoring Equal Access to Equivalent Samples CREATES Act. CREATES, introduced by Sen. Patrick Leahy (D-VT), targets two tactics proponents believe are used to delay introduction of generic drugs into the marketplace: preventing generic drug companies from obtaining samples of a branded product and preventing generic drugs from participating in Risk Evaluation Mitigation Strategy with Elements to Assure Safe Use (REMS with ETASU) safety protocols which can impact FDA approval. CREATES allows a generic drug manufacturer facing one of these delay tactics to bring an action in federal court for injunctive relief and provides a judge with the ability to award monetary damages sufficient to “deter future delaying conduct.” While there may be additional committee actions or hearings, it is unlikely that CREATES advances far in the House or Senate. However, its introduction and support lays the foundation for possible action in 2017.
Medicare Part B Demonstration Project: In March, CMS proposed changes to Medicare Part B reimbursement that would allow variation on what the program spends on certain drugs given in a doctor’s office or similar settings, in hopes of reducing physicians’ incentive to prescribe high-cost drugs. Dubbed the “Part B Demo”, the program has faced stiff opposition from industry, some providers and Congress. A significant number of members of the House of Representatives from both political parties have backed legislation that would block CMS from finalizing the rule. While there is no matching legislation in the Senate, many Republican Senators have asked CMS to scrap the current plan and some Democrats have called on CMS to make modifications. Notwithstanding attempts to pass legislation to prevent the rule, many Washington insiders expect that CMS will try to move forward and finalize the project sometime this year.
History Sidebar: In years past, agencies have sought to have all major rules completed 60 days from the start of a new Presidential administration on January 20th. That means November 21st is the latest date for CMS to finalize the rule.
Additional items of interest that we believe will see some action in 2017:
340B Drug Discount Program – While legislative action on modifying the 340B drug discount plan is not likely this year, it is likely to be one of the priority issues put before Congress when it convenes January 5, 2017.
Off Label – As we discussed in our post here, the FDA is convening a two day public hearing to take stakeholder input for what is commonly called off-label communications. Some in Congress are not pleased by the FDA action, calling it “kicking the can down the road” (see release from the House Energy and Commerce Committee here). Look for policymakers to closely monitor the hearing and its outcome for possible actions in 2017.
User Fee Agreements – Negotiations continue for the various user fee agreements. In August, the FDA and medical device industry reached an agreement in principle for reauthorization of the medical device user fee program (FDA statement here). However, negotiations for the Prescription Drug User Fee Agreement (PDUFA) and Generic Drug User Fee Agreement (GDUFA) have not been completed. Industry representatives are pushing to complete the negotiations and get at least the PDUFA agreement to Congress by the end of the year to avoid the delays that accompany a transition to a new Administration. Also complicating matters for both agreements are concerns from consumer groups and others that the agreements need to address rising costs of drugs.