HealthCare Roundtable e-News – Jan. 27, 2017

Republicans Wrestle with How to Replace ACA

After seeking to eliminate the Patient Protection and Affordable Care Act (ACA) for nearly seven years, congressional Republicans are now expressing concerns about how to do it.

A year ago, the Republican-controlled Congress used the budget reconciliation process to pass a bill that, among other things, would have repealed major portions of the ACA, including the law’s individual mandate, employer mandate, subsidies for the purchase of insurance through the state-level exchanges, “Cadillac tax” on high-value health insurance plans, 2.3 percent medical device tax, creation of the Medicare Independent Payment Advisory Board, and expansion of Medicaid eligibility.

Then-President Barack Obama vetoed the bill, but Republican lawmakers had demonstrated that they could get a repeal bill to the president’s desk, since budget reconciliation legislation does not allow for filibusters and, thus, requires only a simple majority of votes to get through the Senate. Republican leaders are expected to repeat the process now that Donald Trump has become president.

The GOP-controlled House of Representatives voted dozens of times during the Obama administration to repeal all or part of the ACA. During a recent private meeting of Republican lawmakers in Philadelphia, however, several members of Congress noted that, now that repeal is possible, political risks must be considered, The Washington Post reported after being provided with a recording of the meeting.

“We’d better be sure that we’re prepared to live with the market we’ve created” after repeal, Rep. Tom McClintock, R-Calif., said during the meeting. “That’s going to be called Trumpcare. Republicans will own that lock, stock and barrel, and we’ll be judged in the election less than two years away.”

Sen. Lamar Alexander, who will have a leading role in developing a replacement for the ACA as chairman of the Senate Health, Education, Labor and Pensions Committee, similarly urged caution.

“Our goal, in my opinion, should be not a quick fix,” Alexander said. “We can do it rapidly, but not a quick fix. We want a long-term solution that lowers costs.”

The Congressional Budget Office (CBO) has estimated that, in the first year following repeal, if no replacement plan is put in place, 18 million people would lose health coverage, with that number increasing to 32 million within a decade. That prospect appears to have convinced some GOP officials to slow down the process.

“We’re telling those people [who have coverage through the ACA] that we’re not going to pull the rug out from under them, and if we do this too fast, we are in fact going to pull the rug out from under them,” Rep. Tom MacArthur, R-N.J., said.

Some lawmakers also warned against tying a measure that would eliminate federal funding for Planned Parenthood to the bill. While this was included in the legislation a year ago, some now argue that it would rally opponents and make repeal more difficult to enact.

Although there is no official Republican plan to replace the ACA, GOP Sen. Bill Cassidy of Louisiana proposed the “Patient Freedom Act” (S. 191) on Jan. 23, which would give states the option of keeping the ACA, enacting a new “market-based” system with federal funding, or implementing their own plan without federal funding. (Fact sheet)

“Republicans think that if you like your insurance, you should keep it, and we mean it,” Cassidy said. “[States] could opt to stay in Obamacare or they could opt for no federal help. So, California and New York, you love Obamcare? You can keep it.”

Rep. Darrell Issa, R-Calif., meanwhile, is proposing in his “Access to Insurance for All Americans Act” that people be allowed to participate in the Federal Employees Health Benefits Program. A fact sheet about the proposal states that it would “give Americans access to hundreds of affordable, high quality, privately-run health insurance plans that would be offered without mandates, new taxes, or endless bureaucratic hurdles.”

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Trump Withdraws U.S. from TPP

President Donald Trump has pulled the United States out of what would have been the world’s largest free trade agreement, the Trans-Pacific Partnership (TPP).

In October 2015, trade officials from 11 nations finished work on the TPP. One of the issues that held up negotiations near the end was reportedly the insistence by the United States on guaranteeing 12 years of exclusive sales for biologic drugs before generics could enter the market, which was longer than other countries were willing to accept. In the end, the pact would have required participating countries to provide at least five years of exclusive sales to brand-name biologics, and the somewhat ambiguous language indicated that the requirement could have been as much as eight years.

Though former President Barack Obama strongly supported the deal, ratification by Congress appeared unlikely, and Trump campaigned against it as part of his “America First” policy approach. In a Jan. 23 executive order, Trump directed the United States Trade Representative to “withdraw the United States as a signatory to the Trans-Pacific Partnership (TPP), to permanently withdraw the United States from TPP negotiations, and to begin pursuing, wherever possible, bilateral trade negotiations to promote American industry, protect American workers, and raise American wages.”

If the deal had been approved by all of the participating nations, the TPP could have affected as much as 40 percent of global trade. China was not included in the pact.

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65 Senators Back Medicare Advantage in Letter

Nearly two-thirds of the U.S. Senate wrote to the head of the Centers for Medicare & Medicaid Services (CMS) to express their “strong support for the Medicare Advantage program and the high-quality, innovative, and affordable health care it provides.”

Medicare Advantage (MA) offers managed care plans through private companies, which receive a fixed amount of money from the federal government per beneficiary each month. About 18 million people – about one-third of all Medicare beneficiaries – are in Medicare Advantage.

The 65 senators who signed on to the letter asked CMS Acting Administrator Patrick Conway to implement policies “to strengthen this vital and proven part of the program that has led the way on value-based care.”

“Medicare Advantage is of particular importance to beneficiaries with chronic conditions, as plans have the flexibility to offer in-home health clinical visits and disease management programs not always available in traditional Medicare,” the letter stated.

Proposed payment rates for Medicare Advantage, typically a heavily debated topic each year, are scheduled to be announced on Feb. 2. The announcement could give some indication of the Trump administration’s attitude toward Medicare Advantage.

CMS will accept public comments on the proposed rates for 30 days and will announce the final rates on April 3.

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Committee Chairman Looks to Address Prescription Drug Prices

The chairman of the Senate Judiciary Committee is reportedly planning to hold hearings this spring on proposals aimed at lowering the cost of prescription drugs.

Sen. Chuck Grassley, R-Iowa, said in an interview with Axios that he would like to pursue three approaches to bring down drug prices: cracking down on pay-for-delay agreements between brand-name drug manufacturers and generic companies, passing the “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act,” and allowing the importation of prescription drugs.

The CREATES Act, which was unsuccessfully proposed by Sen. Patrick Leahy, D-Vt., in 2016, would allow generic companies to bring federal lawsuits in response to brand-name firms using risk evaluation and mitigation strategies (REMS) to deny generic firms access to their products in order to block the development of competing generic drugs.

Grassley expressed confidence in getting two of the three proposals passed, but he had doubts about the chances for drug import legislation.

“I wish importation of drugs would be easier, but I’ve been involved in debates on importation of drugs, I’ll bet, for 20 years,” Grassley said. “Sometimes they pass the Senate but they never get to the president, sometimes they don’t pass the Senate, because the pharmaceutical industry is so strong politically.”

He also said that other, non-congressional, approaches are needed to address drug prices.

“I think [the Federal Trade Commission] being a little more aggressive would help,” Grassley said. “I think more oversight by Congress and just public opinion, where you’ve got like over the last year, we’ve had so many outstanding examples.”

Judiciary Committee hearings on the proposals are likely to take place in March or April, he said, after the panel completes its work on presidential nominations.

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FDA Releases Guidance on 180-Day Exclusivity for Generic Drugs

The Food and Drug Administration (FDA) has released guidance related to the 180-day exclusivity period for generic drugs.

The first company to apply for FDA approval of a generic for a given reference product generally gets 180 days of exclusive sales before other generics for the same drug can enter the market.

The new guidance document compiles nonbinding recommendations that the FDA has issued over the years within decisions for specific applications.

“FDA believes that a guidance for industry that provides answers to commonly asked questions about 180-day exclusivity would enhance transparency and facilitate the development, approval, and timely marketing of generic drug products,” the guidance states.

The guidance is presented in a Q&A format, with most of the questions related to how the FDA determines the “first applicant” for a given generic, the specifics of the 180-day period, and how the first applicant might lose exclusivity.

The FDA will accept public comments on the guidance through March 14.

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