- Senate Republicans Delay Health Care Vote
- Medicaid Spending Growth Would Slow Significantly Under Senate GOP Proposal: CBO
- FDA Releases List of Drugs that Have No Generics
- U.S. Chamber of Commerce and Others Urge Repeal of ‘Cadillac Tax’
- Application for Biosimilar Rejected
Senate Republicans Delay Health Care Vote
Republican leaders in the Senate abandoned their plan to hold a vote on a health care bill before Congress’ Independence Day recess when they were unable to secure enough support to pass the legislation.
The “Better Care Reconciliation Act,” is the Senate GOP’s answer to the “American Health Care Act” (H.R. 1628), which passed the House on May 4 but found little support in the upper chamber.
Both bills would, among other things, eliminate or make major changes to the Patient Protection and Affordable Care Act’s (ACA) individual and employer mandates, Medicaid expansion, subsidies for the purchase of health insurance in the state-level exchanges, prohibition on setting premiums based on a person’s health status, and requirement that policies cover certain “essential health benefits,” all while cutting taxes ($701 billion over 10 years in the Senate bill; $883 billion over 10 years in the House bill).
Several conservative senators have objected that the bill is not sufficiently different from the ACA, which Republicans have railed against since its passage without a single GOP vote in 2010. Some moderate Republicans, meanwhile, have expressed concerns about the sudden loss of coverage that would result from the legislation. The CBO concluded that the bill would result in 15 million fewer people having health insurance in 2018 than would have had it under current law and 22 million fewer people being insured in 2026 than would have been under the ACA.
In addition, some GOP senators said the process has been too rushed, since the legislation was only unveiled to the public – and to most rank-and-file Republicans – on June 22.
“We’re still working toward getting at least 50 people in a comfortable place,” Senate Majority Leader Mitch McConnell, R-Ky., said.
The GOP has only a two-seat majority in the 100-member Senate, so McConnell needs near unanimous support from his party to pass the bill. Republicans plan to use a procedural maneuver that will avoid the possibility of a Democratic filibuster and require only a simple majority for passage.
Some senators are once again advocating a “repeal then replace” approach in which Republicans would repeal major parts of the ACA, but delay the effective date to give them time to develop a replacement.
“Let’s do clean repeal like we’ve promised,” Sen. Rand Paul, R-Ky., one of the party’s conservative holdouts, said on “Fox News Sunday.”
President Donald Trump backed this approach, tweeting, “If Republican Senators are unable to pass what they are working on now, they should immediately REPEAL, and then REPLACE at a later date!”
This option was discussed several months ago, but was shelved amid concerns about the negative impact it would have.
American Enterprise Institute (AEI), a conservative think tank, published a paper in January stating that repeal-and-delay “carries too much risk of unnecessary disruption to the existing insurance arrangements upon which many people are now relying to finance their health services.”
“The most likely end result of ‘repeal and delay’ would be less secure insurance for many Americans, procrastination by political leaders who will delay taking any proactive steps as long as possible, and ultimately no discernible movement toward a real marketplace for either insurance or medical services,” AEI stated.
Even Paul saw risks to this plan early this year, saying, “If Congress fails to vote on a replacement at the same time as repeal, the repealers risk assuming the blame for the continued unraveling of Obamacare.”
Medicaid Spending Growth Would Slow Significantly Under Senate GOP Proposal: CBO
Spending increases in Medicaid would be sharply reduced over the long term under a Republican-backed health care bill being considered by the Senate, according to the Congressional Budget Office (CBO).
Senate Republicans plan to vote on the “Better Care Reconciliation Act” sometime after Congress returns from its weeklong Independence Day recess. The legislation, which is the Senate GOP’s answer to the “American Health Care Act” (H.R. 1628), which passed the House on May 4, would make major revisions to the Patient Protection and Affordable Care Act (ACA). Among other things, it would end the ACA’s Medicaid expansion and transition Medicaid to a block grant program.
The CBO concluded in a June 26 report that the Senate proposal would result in 15 million fewer people having health insurance in 2018 than would have had it under current law and 22 million fewer people being insured in 2026 than would have been under the ACA, with the bulk of those numbers resulting from decreased Medicaid enrollment.
The agency released another report three days later on the bill’s impact on Medicaid spending beyond 10 years that found that, while under current law, Medicaid spending is projected to grow at a 5.1 percent annual rate during the next two decades, it would, under the Senate bill, grow by 1.9 percent per year through 2026 and 3.5 percent per year through 2036. By then, annual Medicaid spending would be more than one-third lower than what it would have been under current law.
The CBO, along with the Joint Committee on Taxation, noted that it does not have insurance coverage projections beyond 10 years, so it is “not able to quantify the legislation’s effect on insurance coverage over the longer term.”
“However, the agencies expect that after 2026, enrollment in Medicaid would continue to fall relative to what would happen under the extended baseline,” the report stated.
While spending on Medicaid would continue to increase under the Senate bill, CBO determined that it would do so at a long-term rate slower than overall economic growth, so that, by 2036, it would account for 1.6 percent of the nation’s gross domestic product, compared to 2 percent today and the current law 2036 projection of 2.4 percent.
“Under this legislation, after the next decade, states would continue to need to arrive at more efficient methods for delivering services (to the extent feasible) and to decide whether to commit more of their own resources, cut payments to health care providers and health plans, eliminate optional services, restrict eligibility for enrollment, or adopt some combination of those approaches,” the report stated. “Over the long term, there would be increasing pressure on more states to use all of those tools to a greater extent.”
FDA Releases List of Drugs that Have No Generics
The Food and Drug Administration (FDA) has released a list of hundreds of off-patent drugs that do not have an approved generic.
The publication of the list is part of the FDA’s Drug Competition Action Plan and is intended to encourage the development of generic drugs.
“No patient should be priced out of the medicines they need, and as an agency dedicated to promoting public health, we must do our part to help patients get access to the treatments they require,” FDA Commissioner Scott Gottlieb said. “Getting safe and effective generic products to market in an efficient way, being risk-based in our own work and making sure our rules aren’t used to create obstacles to new competition can all help make sure that patients have access to more lower-cost options.”
The FDA, which plans to update the list every six months, will expedite the review of an application for a generic version of any drug on the list. In addition, the agency announced that it will expedite the review of generic applications for any drug for which there are fewer than three approved generics.
The FDA plans to hold a public meeting on July 18 “to solicit input on places where FDA’s rules … are being used in ways that may create obstacles to generic access.”
“These are the first of a series of steps the agency intends to take to help tackle this important issue,” the FDA stated. “The agency will unveil additional aspects of this plan in the near future.”
U.S. Chamber of Commerce and Others Urge Repeal of ‘Cadillac Tax’
Twenty-eight business groups wrote to senators on June 26 to urge them to repeal the tax on high-value employer-provided health insurance plans.
The 2010 Patient Protection and Affordable Care Act included a provision that will impose an excise tax – informally known as a “Cadillac tax” – of 40 percent on the cost of employer-provided insurance plans that exceed certain thresholds. The tax was to go into effect in 2018, but in December 2015, Congress passed legislation that postponed the effective date for two years. The baseline thresholds for the tax, which are subject to annual revision based on inflation, are $10,200 for employee-only coverage and $27,500 for family coverage. The tax is projected to raise $87 billion over the first 10 years, largely resulting from the presumption that employers will increase wages – which are taxable – to offset decreases in health benefits – which, apart from the new excise tax, are exempt from taxation.
The health care proposal that Republicans are trying to get through the Senate would repeal most of the ACA’s taxes but would keep the Cadillac tax, though it would delay implementation until 2026.
The letter from the U.S. Chamber of Commerce and other groups asked that this be changed.
“As you know, U.S. employers provide stable, highly valued health benefits to more than 177 million Americans – the largest source of health care coverage in the country,” the letter stated. “As senators work to revise and amend this legislation to repeal and replace the ACA, we encourage you to protect the employer-sponsored system by fully repealing the ACA’s 40% ‘Cadillac Tax’ and refrain from imposing any new taxes on employee health care benefits.”
The Public Sector HealthCare Roundtable supports repealing the tax.
Application for Biosimilar Rejected
The Food and Drug Administration (FDA) rejected an application for what would have been the sixth biosimilar to be sold in the United States.
Biologic drugs are highly advanced medicines derived from biological, rather than chemical, processes. They are among the most innovative of drug treatments and, as such, are also among the most expensive, potentially costing tens, even hundreds, of thousands of dollars each year for a single patient. Generic biopharmaceuticals are expected to offer lower-cost alternatives to brand-name products, as generic versions of traditional drugs do.
The FDA’s Oncologic Drugs Advisory Committee voted 14-1 on May 25 in support of approving an epoeitin alfa biosimilar that is manufactured by Hospira, a subsidiary of Pfizer. The reference product is Epogen from Amgen. The drug treats anemia in patients with cancer, HIV and certain other conditions.
The FDA, however, rejected the application because of problems with a plant involved in the manufacturing of the drug.
Pfizer said after the rejection that it had “submitted a corrective and preventative action plan to the FDA in March 2017, and has been diligently working to address the items” identified by the agency.
Separately, an FDA official predicted that interchangeable biosimilars will be on the market within two years.
The FDA in January released draft guidance on demonstrating biosimlar interchangeability with a brand-name reference product. If a drug is designated as “interchangeable” with its reference product, pharmacists may substitute it when a doctor prescribes the reference product. The interchangeability issue is more complicated with biologics than it is with traditional, chemical drugs because biologics involve living material, so a biosimilar can never be an exact copy of the original biologic.
Regulatory Focus reported that FDA Associate Director for Therapeutic Biologics Leah Christl said at a Drug Information Association conference that “FDA is reviewing industry’s comments on the draft and will issue either revised draft guidance or final guidance within the next two years.”
On May 18, the Public Sector HealthCare Roundtable and nine other groups submitted comments on the guidance in which they wrote that they were “generally supportive” of the document, but would like to see a few revisions made.
“Most importantly, FDA should permit a designation of biosimilarity parallel to granting an interchangeability designation if the applicant seeks both at the time of initial approval,” the groups wrote. “Any applications which demonstrate that the product can be expected to produce ‘the same clinical results as the reference product in any given patient,’ as required by statute should be deemed interchangeable.”
In addition, the groups expressed opposition to a provision of the guidance that directs that switching studies referenced in an interchangeability application should involve only U.S.-licensed reference products.