HealthCare Roundtable e-News – July 28, 2017

GOP Effort to Repeal ACA Comes Up Short

The seven-year Republican effort to repeal the “Patient Protection and Affordable Care Act” (ACA) came to an end, at least for the time being, with a series of failed votes in the Senate, the last of which prompted the party’s leader in that chamber to concede, “It’s time to move on.”

Republicans were expected to repeal the ACA with relative ease after Donald Trump was elected president and the party held on to its majorities in both the House of Representatives and the Senate last year.

The process turned out to be not easy at all, though, and with Senate Republicans unable to rally around a health care proposal in sufficient numbers to ensure passage, Senate Majority Leader Mitch McConnell, R-Ky., last week put multiple proposals up for a vote, with none getting the 50 votes needed to be sent to the House.

Finally, in an effort simply to keep the process alive, McConnell held a vote on a “skinny repeal” bill, a plan to eliminate the individual mandate, delay the employer mandate for eight years and make certain other, relatively minor, changes. This was no more than a placeholder, though, a way to move things back to the House – where Republicans passed a health care bill (H.R. 1628) after their own intraparty struggles in May – and ultimately, to a conference committee. It would then be in this committee where GOP lawmakers would, presumably, devise a health care plan that they have been unable to develop so far this year, or, really, since the ACA’s passage in 2010. Repealing the individual mandate in the absence of other changes – particularly to the ACA’s guaranteed issue provision – would almost certainly wreak havoc in the insurance markets and drive up premiums, and Republican senators sought and received assurances from GOP leaders in the House that that chamber would not pass the bill as is, but would, instead, go to conference.

Republicans have a 52-48 advantage in the Senate, and Sens. Susan Collins, R-Maine, and Lisa Murkowski, R-Alaska, were already certain no votes, leaving no room for any more defections. (Vice President Mike Pence would break a 50-50 tie.) Around 1:30 a.m. on July 28, however, Sen. John McCain, who returned to the Senate floor just days after being diagnosed with a brain tumor during surgery to remove a blood clot near his left eye, literally gave the bill a thumbs down, signaling his no vote, ensuring the bill’s defeat and preserving the signature legislative achievement of the man who defeated him in the 2008 presidential election, Barack Obama.

“I’ve stated time and time again that one of the major failures of Obamacare was that it was rammed through Congress by Democrats on a strict party-line basis without a single Republican vote,” McCain said. “We should not make the mistakes of the past that has led to Obamacare’s collapse, including in my home state of Arizona, where premiums are skyrocketing and health care providers are fleeing the marketplace. We must now return to the correct way of legislating and send the bill back to committee, hold hearings, receive input from both sides of the aisle, heed the recommendations of the nation’s governors, and produce a bill that finally delivers affordable health care for the American people. We must do the hard work our citizens expect of us and deserve.”

Though he granted that, “It’s time to move on” from attempts to repeal the ACA, McConnell also said that, “The American people are going to regret that we couldn’t find a better way forward. And as I said, we look forward to our colleagues on the other side suggesting what they have in mind.”

The Public Sector HealthCare Roundtable announced on July 17 that it was “deeply concerned” about the potential impact of the Republican health care proposals.” The Roundtable cited concerns with “the loss of health care options, the financial harm for public sector employers, and the damage to the long-term stability of plan sponsors that will result” from the GOP plans. It said that the proposals “work against the policy priorities of the Roundtable … and would have a severe deleterious impact on public sector workers, retirees, and their dependents, as well as the state and local taxpayers who fund their benefits.”

Not unexpectedly, Trump lashed out in a series of tweets after it became clear that he would not be able to deliver on his campaign promise to repeal the ACA. In one tweet, he referenced previous comments that Republicans should let the structure created by the ACA collapse, at which point Democrats, he said, would be eager to work with the GOP on crafting a replacement.

“3 Republicans and 48 Democrats let the American people down,” Trump tweeted. “As I said from the beginning, let ObamaCare implode, then deal. Watch!”

Trump further indicated that he might help to cause the ACA to implode, with a threat to end subsidies that reduce costs for lower-income consumers in the state-level insurance exchanges that were created by the law. He tweeted, “If a new HealthCare Bill is not approved quickly, BAILOUTS for Insurance Companies and BAILOUTS for Members of Congress will end very soon!”

The ACA provides for about $7 billion in federal cost-sharing reduction payments to insurers each year. In 2016, a federal judge ruled, in a case filed by House Republicans, that the Obama administration’s payment of the subsidies was unconstitutional because, although they were included in the ACA, the Republican-controlled Congress had not appropriated the funds for the payments. The judge who issued the ruling, though, put it in abeyance, pending an appeal. Under Trump, the federal government has been making the payments as usual, but has not decided whether to appeal. In May, in a joint filing with congressional Republicans, the administration asked the U.S. Court of Appeals for the District of Columbia Circuit to delay the implementation of last year’s ruling for at least 90 more days.

Senate Minority Leader Chuck Schumer, D-N.Y., accused Trump of being unpresidential for making such a comment.

“If the president refuses to make the cost-sharing reduction payments, every expert agrees that premiums will go up and health care will be more expensive for millions of Americans,” Schumer said. “The president ought to stop playing politics with people’s lives and health care, start leading and finally begin acting presidential.”

Despite the defeat, Senate Republicans could, in theory, return to the repeal issue at any point, and McCain’s health and continued ability to serve may be the only thing preventing that for now. Alternatively, the GOP could drop its “repeal and replace” mantra and pursue a health care bill in consultation with Democrats.

Schumer said he hopes Republicans take the latter approach.

“Every place in every corner of the country where we go, the No. 1 thing we are asked – and I know this because I’ve talked to my colleagues on the other side of the aisle – is, ‘Can’t you guys work together,'” Schumer said. “Let’s give it a shot.”

Trump, though, encouraged a different tactic in a July 29 tweet: “Unless the Republican Senators are total quitters, Repeal & Replace is not dead! Demand another vote before voting on any other bill!”

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House Panel Examines Practices that Block Generic Drug Competition

Preventing brand-name drug companies from employing Food and Drug Administration (FDA) rules to block generic competition may be one of the few issues that can unite Republicans and Democrats.

A House Judiciary Committee subcommittee held a hearing on July 27 to examine, from an antitrust perspective, the use by brand-name companies of the FDA’s risk evaluation and mitigation strategies (REMS), which are typically intended to control the distribution of medicines for which there are safety concerns, to deny generic companies access to their products. Without such access, generic firms are unable to show the bioequivalence – or, in the case of biologics, biosimilarity – that is needed for approval by the FDA.

“While it is imperative that the U.S. continue to remain the world leader and innovator in the pharmaceutical market, it is important that these antitrust concerns be given significant deliberation,” Judiciary Committee Chairman Bob Goodlatte, R-Va., said at the hearing. “The benefits from such leadership and innovation are undermined if our consumers unfairly bear the brunt of anticompetitive conduct through above-market prices.

Rep. John Conyers of Michigan, the ranking Democrat on the committee, expressed similar concerns.

(“These regulatory requirements are an important safeguard to ensure that drugs … with potentially dangerous characteristics and side effects are safely and carefully distributed,” Conyers said. “The process, however, may also serve to stifle competition and keep drug prices high, artificially high.

Conyers also referenced other issues that affect drug pricing, including “pay-for-delay” agreements in which brand-name companies pay generics not to introduce a competing product for a certain period of time.

FDA Commissioner Scott Gottlieb noted that, since the first generic applicant is granted 180 days of exclusive sales – and that clock does not start until commercial marketing begins – delay agreements between brand-name companies and first applicants “are particularly powerful because one such agreement has the potential to affect when the subsequent generic drug applicants for a given drug product can enter the market.”

Gottlieb also repeated his criticisms of brand-name companies for having “leveraged – or gamed” the FDA’s system to slow generic drug approvals.

“This can serve to thwart expected competition,” Gottlieb said. “We are actively considering the ways our rules and laws are being used and, in some cases, misused, to diminish competition, and in turn, reduce access to medicines.”

Markus Meier, the acting director of the Federal Trade Commission’s Bureau of Competition, agreed that “certain aspects of the existing structure have proven susceptible to strategic – and potentially anticompetitive – behavior.”

“Despite clear guidance from both Congress and the FDA that drug firms should not use REMS programs to block or delay generic or biosimilar competition, complaints about abuse of the regulatory process persist,” Meier said. “Instances of extreme price hikes of some off-patent drugs and efforts to limit their distribution to prevent competition have made headlines in recent years. The problem, however, is not confined to just a handful of drugs. One study estimates that Americans have lost $5.4 billion in annual savings due to delays in accessing drug samples caused by REMS misuse and other non-FDA mandated restricted distribution programs.”

Meier added that the FTC “supports the goal” of the “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act,” (H.R. 2212; S. 974), which would allow generic companies to bring federal lawsuits and seek damages when brand-name companies improperly withhold their products. (Summary) The bill was introduced in the House by Rep. Tom Marino, R-Pa., who chairs the subcommittee that held the July 27 hearing.

The Public Sector HealthCare Roundtable signed on to an April 27 letter to lawmakers that supported the proposal and warned that, “These abuses are growing and the resulting delay in generic and biosimilars competition is costing patients, the federal government, and the health care system billions of dollars annually.”

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FDA Proposes ’21st Century Cures Act’ Work Plan

The Food and Drug Administration has proposed a work plan for its new funding from the “21st Century Cures Act.”

The measure, which was signed into law by then-President Barack Obama in December, would, among other things, revise and speed up the approval process for drugs and medical devices and provide an extra $4.8 billion in funding to the National Institutes of Health (NIH) and an additional $500 million in funding to the FDA.

“The Cures Act includes provisions that have the potential to have far-reaching effects on scientific advancements in medical product development,” the FDA stated in the work plan. “The speed at which science is evolving is unprecedented – creating an era of biomedical discovery and innovation.”

The plan earmarks portions of the additional FDA funding across several program areas – patient-focused drug development; advancing new drug therapies; modern trial design and evidence development; patient access to therapies and information; medical device innovation; and improving scientific expertise and outreach. The most money would go to “patient access to therapies and information” – $185.2 million through 2025.

“Together with other funding sources, as available, FDA’s proposed Innovation Account funding allocations can help chart a path for advancing medical product development and reviews and help bring innovative new therapies and products to patients and health care providers in a more timely and efficient manner,” the plan stated.

The FDA submitted the plan to members of Congress for their review.

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