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Mar 26, 2018

Washington Healthcare Update

This Week: Omnibus arrives… Right to Try passes House on the second try… and then Congress is gone for two weeks.

1. Congress


2. Administration

1. Congress



Last-minute wrangling over policy riders delayed agreement and the release of the text of the omnibus spending bill. Late March 21, congressional leaders unveiled a $1.3 trillion omnibus spending bill that was passed by the House on Thursday and by the Senate in the early morning hours of Friday. The president was expected to sign the legislation; however, on Friday morning the president threatened in a tweet to veto the legislation. However, he signed the bill Friday afternoon. Congress had already left for a two-week recess.

The spending package includes an additional $3.6 billion for opioid-addiction and mental-health services. The bill does not include marketplace stabilization measures or brand drug industry-backed changes to the Part D program.

The bill would provide HHS $78 billion in budget authority, which is $10 billion more than the 2017 level. NIH would get the largest increase, $3 billion, while most other agencies would get slight bumps or stayed flat.

In addition appropriators rejected the administration’s efforts to reduce funding for the Centers for Disease Control and Prevention and instead added $1.1 billion to that agency’s funding. The proposal would boost CDC’s Public Health Preparedness and Response programs by $45 million and $480 million for construction of a new biosafety lab to support biodefense research.

It also gives CDC $475 million for prescription overdose prevention activities—an increase of $350 million to help fight the opioid epidemic, with $10 million of those funds dedicated to an opioid abuse awareness campaign. 

Congressional appropriators also rejected the Trump administration’s proposed 41 percent cut to the National Institute for Occupational Safety and Health—CDC’s office dedicated to workplace health—and rebuffed the White House’s attempt to move the office too.

Instead, Congress trimmed the safety office’s $338 million budget by $3 million, or a less than 1 percent cut, while preserving NIOSH’s place within the CDC. The Trump administration’s budget, released in February, would have cut the office’s funding to $200 million while merging it with the NIH.

NIOSH is the agency’s 1,300-person division that investigates workplace chemical exposure, occupational stress and other labor safety issues. The office oversees the World Trade Center Health Program.

CMS would receive $4 billion for administrative expenses, the same as last year. As in previous years, the HHS budget would bar CMS from using program funds for the risk corridor program and require HHS detail all spending on the ACA since its enactment in its next budget request. 

Issuers who had been strongly urging lawmakers to include stabilization measures, particularly funding for cost-sharing payments and reinsurance, immediately expressed their dismay with the bill. 

Of the $3.6 billion to help fight the opioids crisis, the funding includes:

  • $500 million for the National Institutes of Health, including money for researching non-addictive pain killers;
  • $500 million for state opioid grants under the 21st Century Cures Act;
  • $330 million for law enforcement grant programs, including those that were authorized by the Comprehensive Addiction and Recovery Act; and
  • $476 million for HHS grants to help fight the opioid crisis, including funding for state Prescription Drug Monitoring Programs and the National All Schedules Prescription Electronic Reporting system.

A Medicare policy change included in the package will mean that providers will see increased reimbursement for a small group of new drugs for two additional years. The change will allow for five years of pass-through status because the bill also specifies that it only applies to drugs that lost pass-through status on Dec. 31, 2017, and for which payment was bundled into a group of services under Medicare policies beginning Jan. 1, 2018. Pass-through payments are added payments to doctors for the first two to three years a product is on the market to assist in the costs of adopting new drugs and technology.

Less than two dozen products are estimated to benefit from the policy change. The provision also called for a GAO study by March 2021 on the impact of packaging high-cost drugs into these bundled payments for hospital outpatient services after their pass-through payment status has expired.

The omnibus bill did not include a pass-through provision pushed by some brand drug companies that would have excluded biosimilars from any pass-through payments. This provision was vigorously opposed by the generic drug lobby, which said the provision could cripple the biosimilars industry, which is just getting off the ground.

Right-to-Try Passes House 

On March 21, the House of Representatives passed on party lines a bill designed to let very sick patients request access to experimental medicines without government oversight.

The passage of the bill, known as right-to-try, is a big victory for the small libertarian think tank that crafted the proposal—and for a White House that has vigorously campaigned for the law. It had failed to pass last week on an expedited process that required two-thirds’ support.

H.R 5247 passed by a vote of 267-149. Thirty-five Democrats voted for the proposal and two Republicans against.

In the Senate, following passage of the omnibus bill in the Senate, Sen. Ron Johnson (R-WI)  tried and failed to move his original right-to-try legislation, S. 204, which passed the Senate last summer with broad bipartisan support. In a statement he urged the House to pass the Senate bill so President Donald Trump, who strongly backs right-to-try, can sign it.

Energy and Commerce Committee Subcommittee on Health Holds Hearings on Opioid Crises

As the Energy and Commerce Committee wades through 25 bills addressing the opioid epidemic, the subcommittee on health held hearings on March 20 and 21. The first day of hearings focused on the Drug Enforcement Administration’s role in combating the epidemic. The second day was broadly focused on public health solutions.

2. Administration

Administration Names New CDC Head 

Robert Redfield, MD, is the Trump administration’s choice to lead the Centers for Disease Control and Prevention (CDC). Redfield, a Baltimore-based AIDS researcher, has the support of Rep. Elijah Cummings (D-MD). 

“Although I seldom agree with the Trump administration, I am in complete agreement that Dr. Bob Redfield is the best choice to lead the CDC,” Cummings said in a statement. “Bob has devoted his life to improving the public health, including leading PEPFAR efforts around the world and as the clinical head of the Institute of Human Virology in Baltimore fighting the HIV and Hepatitis C epidemics in this region,” Cummings said in a statement. 

Labor Rolls Out Opioid Grants

Labor Secretary Alexander Acosta traveled to Columbus, Ohio, March 20, to announce $21 million in job training grants for victims of the opioid epidemic, DOL officials said.

The grants will fund seven to ten programs to fund job training for people affected by the crisis. Acosta announced the grants during a visit to Maryhaven’s Addiction Stabilization Center and met with government and business leaders at the Ohio Chamber of Commerce. The announcement came one day after President Donald Trump’s visit to New Hampshire, where he offered few specifics on his plan to fight opioid addiction.

CMS and Final Notice of Changes to the Medicaid National Drug Rebate Agreement

On March 22, 2018, the Centers for Medicare & Medicaid Services (CMS) put on display CMS-2397-FN, the final notice that announced changes to the Medicaid National Drug Rebate Agreement (NDRA), which will be applicable as of the March 23, 2018, publication in the Federal Register. The updated NDRA can be viewed at the following link:

The updated NDRA incorporates legislative and regulatory changes that have occurred since the NDRA was last published on Feb. 21, 1991, and also makes editorial and structural revisions, such as references to the updated Office of Management and Budget (OMB)-approved data collection forms and electronic data reporting. Manufacturers with an existing active NDRA(s) as of the applicability date of the notice have until Sept. 30, 2018, to complete (including the CMS-367d), sign and submit the updated NDRA in order to continue participation in the Medicaid Drug Rebate Program (MDRP). 

Today, the Centers for Medicare and Medicaid Services (CMS) issued a notice of proposed rulemaking (NPRM) that would provide exemptions from the regulatory access to care requirements within the Medicaid program. Specifically, the NPRM would exempt states with high rates of comprehensive Medicaid managed care from analyzing data and monitoring access in fee-for-service delivery systems. Additionally, the NPRM would provide similar exemptions to all states when they make nominal rate reductions to fee-for-service payment rates.

To view the Final Rule with comment, visit

Note: Because Congress is on recess for two weeks, the next issue will be Monday, April 9. 

If you have any questions, contact the following individuals at McGuireWoods Consulting:

Stephanie Kennan, Senior Vice President
Anne Starke, Research Associate

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