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May 21, 2018

Washington Healthcare Update

This Week: More opioid legislation marked up…Questions about the need for the rescission package…President releases drug pricing plan…And FDA and CMS start to act

1. Congress

House

Senate

2. Administration


1. Congress

House

Ways and Means Committee and Energy and Commerce Committee Hold Markups on Opioids

On May 16, the Ways and Means Committee marked up seven bills related to opioids and the Medicare and Medicaid programs. 

On May 17, the Energy and Commerce Committee held the second of its opioid legislation markups, clearing 32 bills. The previous markup reported out 25 bills.   

Rescission Package Revisited

The White House’s plan to reduce $15.4 billion from the federal budget would actually only save $1.3 billion over a decade, the Congressional Budget Office announced May 11. There are two reasons for that big discrepancy: Most of the funding is “no longer necessary” or it wouldn’t be spent under current law, so it hasn’t actually been counted as part of the $4 trillion budget.

CREATES Act

In responding to questions about the president’s plan to lower drug prices, House Speaker Paul Ryan (R-WI) said the Energy and Commerce Committee and the Judiciary Committee are working out a compromise on legislation known as the CREATES Act, which is designed to lower drug prices by penalizing drug companies that try to keep generic drugs off the market. Some Republicans have previously objected to the bill because they say it would invite lawsuits against drug companies.

Right to Try—Again

The House will vote next week on “right-to-try” legislation, which would make it easier for terminally ill patients to get experimental drugs, that passed the Senate by unanimous consent in August. House Energy and Commerce Committee Chairman Greg Walden (R-OR), who had previously expressed reservations about the Senate bill, said he would like to see the legislation land on President Donald Trump’s desk.

Senate

HELP Committee Holds Second Hearing on 340B Program

On May 15, the Senate Health Education, Labor and Pensions Committee held a second hearing concerning the 340B Program. Testifying at the hearing were

  • Ann Maxwell, Assistant Inspector General, Evaluation and Inspections, HHS
  • Debra Draper, Ph.D., Director, Health Care Team, Government Accountability Office

Both witnesses raised issues concerning HRSA’s oversight of the rel="noopener noreferrer" program. 

See the hearing or read the testimony.

2. Administration

Trump Releases Plan to Lower Drug Prices

On May 11, President Trump announced his plan to lower drug prices. The plan does not call for a major overhaul of drug companies’ pricing practices, but does include some proposals that they oppose.

Much of Trump’s plan is in the form of suggested actions, and it will take time for actual detailed proposals to be put forward.

Among the biggest policy changes floated by the White House are requiring drug companies to disclose their prices in television ads and cracking down on delay tactics drug companies use to prevent cheaper generic drugs from reaching market.

Much of the plan focuses on the “middlemen”—pharmacy benefit managers (PBMs), who have been criticized for a lack of transparency.

Trump also called for adding more competition into Medicare Part B, moving Part B drugs to Part D, allowing restricted use of the six protected classes of drugs on Part D plans and removing barriers to getting generics on the market faster.

Following the release of the plan, on May 17, FDA Commissioner Scott Gottlieb released a “list of shame,” a list of 40 companies the FDA believes have acted to delay generics coming on the market.   

HHS to Issue Request for Proposal on Medicare Part B Competitive Acquisition Program

In a speech HHS Secretary Azar said the department will issue a request for proposal to use an alternative system known as a competitive acquisition program for buying Medicare Part B drugs. 

The program would let private-sector companies negotiate costs of physician-administered drugs. Currently Medicare reimburses doctors for these often-expensive drugs on a formula: average sales price plus 6 percent. That gives drug companies complete control of the costs of medicines and some health policy experts say it creates incentives for physicians to prescribe higher-cost products.

Azar also reiterated the call for HHS to merge Medicare Part B drugs in Medicare Part D. The Part D program, which covers drugs purchased at the pharmacy counter, lets private health insurance companies negotiate for lower costs.

CMS Warns About Gag Clauses on Pharmacists

On May 17, CMS sent a memo to Part D Plan sponsors warning them to drop so-called “gag clauses” on pharmacists. The memo said in part:

An important step in putting patients first and lowering out-of-pocket costs is addressing “gag clauses” that some health plans and pharmacy benefit managers include in their contracts with pharmacies. Gag clauses are contracting terms and conditions that prevent pharmacies from telling customers about the availability of lower cash prices. Specifically, they prevent pharmacies from sharing with customers that their copay is more than the total cost of the drug and that they could pay less out-of-pocket by not using insurance.

We are committed to empowering patients with the information they need to make informed decisions about their care. This includes ensuring that all patients have access to drug price information that can help them save money and get the most value from their insurance coverage. In Medicare Part D, our existing policy requires plan sponsors to ensure enrollees pay the lesser of the Part D negotiated price or copay, or be subject to CMS compliance actions. We want to make it clear that CMS finds any form of “gag clauses” unacceptable and contrary to our efforts to promote drug price transparency and lower drug prices.


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

Stephanie Kennan, rel="noopener noreferrer" Senior Vice President

Founded rel="noopener noreferrer" in 1998, McGuireWoods Consulting LLC (MWC) is a full-service public affairs firm offering infrastructure and economic development, strategic communications & grassroots, and government relations rel="noopener noreferrer" services. rel="noopener noreferrer" McGuireWoods Consulting is a subsidiary of the McGuireWoods LLP law firm and has been named in The National Law Journal's special annual report, "The Influence 50," for the past several years. In the most recent report, McGuireWoods Consulting was ranked 15th of the 1,900 government relations firms in rel="noopener noreferrer" Washington, D.C.

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