with Paulina Firozi
House Democrats have named lowering drug one of their priorities, with Speaker Nancy Pelosi (D-Calif.) promising last week “to lower health costs and prescription drug prices.” Sen. Chuck Grassley (R-Iowa), the newly minted GOP chairman of the Senate Finance Committee, has vowed to crack down on the “shenanigans” played by major drugmakers to limit lower-priced alternative medicines.
There are signals the industry’s influence is waning, after it recently failed in its bid to reverse steeper payments for drugs in Medicare’s so-called "doughnut hole," the coverage gap for seniors. And overlaying all of this are surprisingly aggressive efforts by the Trump administration to lower prescription drug costs in the Medicare program, some of which were outlined in its drug pricing blueprint.
“I’m very optimistic that the long overdue effort to rein in the price gouging from PhRMA is underway,” Rep. Peter Welch (D-Vt.) who is seen as a leader on the issue, told me on Friday.
Members are eyeing at least two bills with bipartisan support: The Creates Act, which would prevent branded drugmakers from guarding their medications so other companies can’t develop alternatives; and legislation to prohibit “pay-for-delay” deals in which drugmakers pay producers of generic medicines to delay introduction of cheaper versions of them.
These measures attempt to introduce more competition among drugmakers by leveling the playing field — an approach some in theTrump administration (including Health and Human Services Secretary Alex Azar and Food and Drug Administration Commissioner Scott Gottlieb) favor even as they remain suspicious of approaches that smack of government price-fixing. As for Democrats, they’d like the government to play a much more robust role in the prescription drug pricing business, but many feel they shouldn’t let the perfect be the enemy of the good.
“I think it would be a shame … to waste an opportunity if President Trump is willing to work on this issue — or have his people work on this issue — to actually get something done,” said former congressman Henry Waxman, a Democrat from California who served as chairman and then ranking member of the House Energy and Commerce Committee.
Ending pay-for-delay tactics is a priority for Grassley, who has teamed up with Sen. Amy Klobuchar (D-Minn.) on their Preserve Access to Affordable Generics Act. The legislation, which would prohibit the deals for generics, would “inject a healthy dose of Midwestern, common-sense medicine into Big Pharma,” Grassley said in a November floor speech.
Grassley has also signed on to the Creates Act, whose House and Senate versions are supported by a broad range of lawmakers — so broad, in fact, that they included both Sen. Ted Cruz (R-Tex.) and former Rep. Beto O’Rourke, who nearly beat Cruz in the November midterms. The measure would allow generic companies to sue branded companies for failing to provide them with samples needed to create generic versions of their products (we explained the Creates Act more in this Health 202).
Of course, the partial government shutdown now in its third week is consuming all the oxygen in the room right now. But advocates say they’re still betting lawmakers will come together on an issue that troubles 80 percent of Americans.
“I am way more optimistic than we’ve ever been before,” said Ellen Albritton, a senior policy analyst at Families USA. “I think a lot of things are aligning in a way that they haven’t aligned before.”
The industry isn't appearing to back down, either. More than three dozen drugmakers began the new year by hiking their product prices an average of 6.3 percent, the Wall Street Journal’s Jared S. Hopkins has reported, although he noted many of the hikes were relatively modest amid pressure on the issue.
Trump tweeted this over the weekend, following the report:
Drug makers and companies are not living up to their commitments on pricing. Not being fair to the consumer, or to our Country!
— Donald J. Trump (@realDonaldTrump) January 5, 2019
The Campaign for Sustainable Rx Pricing launched a new website yesterday to help convince lawmakers to take on high drug prices. “Members of Congress ran and won on the promise to hold pharmaceutical companies accountable and lower drug prices. Our goal with this new website is to provide lawmakers with the information they need to turn their campaign promises into substantive action,” said Lauren Blair, CSRxP communications director.
The Trump administration has several drug pricing efforts in the works, mostly centered on tweaking the way the government pays for drugs in the Medicare program. But it’s been bold enough to have won some respect — if begrudging — from some of the most liberal Democrats in Congress, including Welch.
“There are promising signs out of the Trump administration,” Welch said. “I think there is a significant potential Trump is going to step up on prescription drug pricing.”
Yet politics remain in play. House Democrats certainly aren’t ignoring the 2020 election, which could of course hand them the White House and open the door wider for pushing priorities Republicans don’t favor.
Consequently, there’s talk in the caucus of passing legislation allowing the federal government to directly negotiate lower prices with drugmakers in the Medicare Part D program — a pie-in-the-sky dream for liberals that is strongly opposed by conservatives. It would be mostly a messaging tactic for Democrats, as it would almost certainly die in the Senate.
Still, Democrats point to the huge support among their own members for the idea. Several Democrats have offered bills requiring Medicare price negotiations, but the most popular — offered by Rep. Lloyd Doggett (D-Tex.) — has 104 co-sponsors. Welch said he holds out hope Trump would sign such a measure (assuming Democrats could somehow get it through the Senate), given the support he expressed on the campaign trail.
A spokesman for House Energy and Commerce Chairman Frank Pallone (D-N.J.) also pointed to Medicare price negotiations, as well as the more likely efforts to lift barriers to generic drugs. “He is hopeful that Democrats can work with the president in a bipartisan way,” spokesman C.J. Young said.
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AHH, OOF and OUCH
AHH: This year, there will be more female CEOs than men named "Michael" giving corporate presentations at the year's biggest biotech conference, Stat News reports. Last year, the website had noted there were more "Michaels" presenting than women at the J.P. Morgan Healthcare Conference.
"The tables have turned: At next week’s confab, there will be 33 female CEOs presenting corporate updates, compared to 19 men named Michael," Rebecca Robbins writes. "And yet women will still be massively outnumbered on one of biotech’s biggest stages: Men represent 90 percent of the 553 executives who will give corporate presentations at JPM. That’s down from 94 percent last year."
OOF: Insurers have pocketed more than $9 billion in taxpayer funds by overestimating their annual costs for Medicare Part D prescription drug plans, the Wall Street Journal’s Joseph Walker and Christopher Weaver report. Mysterious Medicare payment rules, and the resulting payment discrepancies, are examples of “how the secrecy of the $3.5 trillion U.S. health-care system promotes and obscures higher spending,” the pair write in this investigation.
Here’s how the system works: Insurers like CVS Health Corp., UnitedHealth Group and Humana submit estimates of how much providing Medicare’s prescription drug benefit will cost them, and Medicare in turn uses that estimate to make payments to the insurers.
“After the year ends, Medicare compares the plans’ bids to the actual spending. If the insurer overestimated its costs, it pockets a chunk of the extra money it received from Medicare—sometimes all of it—and this can often translate into more profit for the insurer, in addition to the profit built into the approved bid,” Joseph and Christopher write. “If the extra money is greater than 5% of the insurer’s original bid, it has to pay some of it back to Medicare....A detailed analysis of the confidential industry data obtained by the Journal shows that 69% of Part D members from 2009 to 2013 were in plans that overestimated costs by at least 5% over that time."
OUCH: The Food and Drug Administration says e-cigarette start-up Juul and Altria, the country’s largest cigarette maker, are going back on their pledges to combat youth vaping, an issue that’s become a critical focus for commissioner Gottlieb.
Gottlieb plans to write letters to the companies to “criticize them for publicly pledging to remove nicotine flavor pods from store shelves, while secretly negotiating a financial partnership that seems to do the opposite,” the New York Times’s Sheila Kaplan reports. The commissioner also wants the companies leaders to come to the agency to explain their plans.
Despite making promises to help address youth vaping, Sheila writes the FDA is worried the December agreement Altria made to purchase 35 percent of Juul will expand the reach of the very pod-based products it said it would stop selling until the youth vaping problem was addressed.
TRUMP TEMPERATURE
The partial government shutdown is dragging into its third week, and while no progress seems to have been made in negotiations, Trump administration officials have begun taking new steps to contain the fallout, our Post colleagues Robert Costa, Juliet Eilperin, Damian Paletta and Nick Miroff report. Meanwhile, various federal agencies and health programs have been impacted by the stalemate:
— For 38 million low-income Americans, the shutdown could mean severe food stamp reductions if it stretches on. “The SNAP program is rare among federal initiatives because it requires annual funding from Congress, even though its existence is automatically renewed,” our Post colleagues Damian Paletta and Erica Werner report. “Congress has not allocated funding for SNAP beyond January, and the program’s emergency reserves would not cover even two-thirds of February’s payments, according to past disbursements.” A disruption of the program impacts not only the families who receive food stamps but the retailers where that money is spent, our colleagues add. An Agriculture Department spokesman said the administration is looking at options amid the halt.
— For the FDA, the shutdown means the agency hasn’t been able to accept some new applications for drugs or medical devices. Those applications that require user fee payments could not be accepted because “it can’t accept new FY2019 user fees without an appropriations bill for FY2019,” Commissioner Gottlieb explained in series of tweets last week. But the agency can accept new regulatory submissions that don’t require a fee. Stat's Ike Swetlitz and Erin Mershon also reported last month the shutdown would not stop the agency from recalling harmful food and drugs but would slow the process for drug approvals as well as some administrative actions.
— In Indian Country, the shutdown has meant critical funding hasn't arrived to keep health clinics running. “Generations ago, tribes negotiated treaties with the United States government guaranteeing funds for services like health care and education in exchange for huge swaths of territory,” the New York Times’s Mitch Smith and Julie Turkewitz write. But that means a government shutdown can largely sideline a tribe's basic functions.
— Not all agencies have halted work. While many federal scientists across the country have been affected by stalled funding and the inability to continue research, the New York Times's Alan Blinder points out the Centers for Disease Control and Prevention and the National Institutes of Health were "entirely or mostly funded through other legislation."
HEALTH ON THE HILL
—One day after retaking the majority in the House, Democratic lawmakers took an initial step toward intervening in a case in which U.S. District Judge Reed O'Connor ruled that the Affordable Care Act is unconstitutional.
As part of a rules package for the new Congress, the party voted to granted itself the authority to intervene in the lawsuit, and scheduled a vote for this week "designed to force GOP lawmakers into a political corner: agree to defend a law many members have spent years reviling or appear to oppose popular ACA protections for millions of Americans with preexisting medical conditions that many have pledged to uphold," our Post colleague Amy Goldstein reports.
The move came hours after California Attorney General Xavier Becerra led a coalition of 17 Democratic state AGs in filing an appeal to challenge the district court's ruling.
It's a move that could bring the health-care law all the way to the Supreme Court for a third time, Amy writes.
“This shouldn’t be a debate; the ACA has been the law for nearly a decade and is the backbone of our health-care system,” Becerra said during a call with reporters last week. “This case impacts nearly every American — workers covered by employers, families, women, children, young adults, and seniors — so we will lead the ACA’s defense as long and far as it takes.”
Colorado Attorney General-elect Phil Weiser called the decision “mind boggling” and said it “goes against the role of government to protect people. I just can’t begin to express the magnitude of what a threat that is to the rule of law.”
— For the first time, House Democrats are planning to hold hearings on "Medicare for all," a step that comes as Pelosi has backed the process, as our Post colleague Dave Weigel reports.
Working toward a version of universal health care has been a Democratic goal for decades. But it seemed to pick up some momentum after Sen. Bernie Sanders (I-Vt.) pushed for Medicare for all during his presidential campaign in 2016. The next year, House Democrats cosponsored H.R. 676, a Medicare for all bill.
Rep. Pramila Jayapal (D-Wash.), the House sponsor of the legislation, called it a “huge step forward” to have Pelosi’s support. “We have to push on the inside while continuing to build support for this on the outside.”
“With Democrats locked out of power in the Senate and the White House, Jayapal said supporters of universal health care were proceeding ‘one step at a time’ and that getting the first real hearings on the bill — for years, it has been aspirational, and not even subject to a Congressional Budget Office score — would force a larger discussion,” Dave writes.
— House lawmakers are planning to introduce a bipartisan gun-control measure on Tuesday, an effort led by Pelosi, Gun Violence Prevention Task Force Chairman Rep. Mike Thompson (D-Calif.), and Rep. Peter T. King (R-N.Y.).
The proposal will call for universal background checks for firearm purchases and transfers, our colleague Karoun Demirjian reports.
House Democrats promised to tackle the issue of gun control with their new majority. “The new Democrat-controlled House will almost certainly be able to muster the votes to pass a gun-control measure that expands background checks,” Karoun writes. “The measure may even pull along some Republican support. … But it remains unclear whether such legislation could clear procedural hurdles in the Senate, which remains under Republican control. The closest that the Senate has come to passing gun-control legislation expanding background checks was in 2013, following the Sandy Hook Elementary School shooting, when 56 senators rallied behind a measure — four votes shy of what they needed to clear procedural hurdles."
AGENCY ALERT
— Politico's Dan Diamond spoke with Chris Meekins, who left HHS last week after helping oversee migrant family reunifications. Meekins called the family separation policy headed by the Department of Homeland Security an "ill-fated policy that was devised by Jeff Sessions and Stephen Miller." "I think that it’s unconscionable to do it in this way," Meekins said. Listen to the podcast here.
— In the final snapshot released by CMS, the agency revealed enrollment on the federal health care exchange this season fell nearly 4 percent overall from last year's sign-up period. A total of 8.4 million people signed up or were automatically enrolled in health plans for 2019 on Healthcare.gov, compared with 8.7 million who were signed up during last year's open enrollment.
The final numbers don't include sign-up rates for states that have their own insurance exchange and many of those states have sign-up periods that extend into mid-January. CMS said it would release additional data, including information from those state-based exchanges, in March.
— Mary Mayhew, the Trump administration’s Medicaid director, resigned from her post last week after less than three months on the job. Mayhew, who was tapped in October to be the director of the Center for Medicaid and CHIP Services, will now run Florida’s health-care agency, the Miami Herald’s Elizabeth Koh reports. Before her stint in the Trump administration, Mayhew served for seven years as the health and human services commissioner under Maine’s former Republican governor Paul LePage.
Mayhew, long a critic of expansion under the ACA, was praised by CMS administrator Seema Verma in a Friday statement. “I am excited for Mary as she transitions to serve Governor-elect DeSantis and the people of Florida,” Verma said. “I appreciate her efforts at CMS and I look forward to continuing to work with her as she uses her many talents to help the state of Florida create a healthcare system that serves the needs of its citizens.”
— James Carroll was confirmed by the Senate on Wednesday to lead the Office of National Drug Control Policy after leading the office in an acting capacity since February. The White House had gone without a permanent drug czar since nearly the beginning of the Trump administration.
— ICYMI: The Centers for Medicare and Medicaid Services finalized in late December its overhaul of Medicare’s so-called Accountable Care Organizations (ACOs) program — and the agency followed through on stricter rules that could expose these health savings cooperatives to losses sooner. The Health 202 detailed the proposed new rules here.
— Veterans Affairs Secretary Robert Wilkie, who has been the subject of multiple reports about his previous affiliation with Confederate groups, failed to disclose that affiliation to the Senate Veterans' Affairs Committee during his confirmation process, CNN's Andrew Kaczynski reports.
Our Post colleagues Lisa Rein and Paul Sonne have reported Wilkie built his career working alongside polarizing figures and was once a member of the Sons of Confederate Veterans, a group that defends Confederate symbols. CNN’s Andrew, Nathan McDermott and Chris Massie also reported Wilkie has given a speech to the group. “Wilkie was required to disclose in a sworn statement submitted to the Senate committee his public statements, published materials and memberships he held in organizations over the past decade,” Andrew writes. “Wilkie, however, did not disclose any of his ties to Confederate groups.”
STATE SCAN
— In Maine, new Gov. Janet Mills issued an executive order to move forward with expanding Medicaid in the state, fulfilling a campaign promise to make doing so her first priority, the Associated Press’s Marina Villenueve reports.
The Democrat called for expedited approval of benefits to 70,000 additional low-income residents in the state and called for the state’s health agency to work with lawmakers to find a way to fund the expanded program. The plan still needs to be approved by federal regulators.
— In California, the soon-to-be-sworn-in Gov.-elect Gavin Newsom is expected to introduce an ambitious leave policy that would give families six months of paid leave after a child is born, which would be the longest in the country.
Newsom is set to propose the policy and include it in his budget after his swearing in on Monday, the New York Times’s Claire Cain Miller and Jim Tankersley report. But what’s missing in the Democrat's policy is a plan to fund it. “It’s the same challenge that has stymied the policy at the federal level,” Claire and Jim write. “Around 80 percent of Americans consistently say they support paid parental leave, and some Republican lawmakers have joined Democrats in embracing the idea. Yet federal lawmakers have declined to pass tax increases or corporate mandates to make it a reality.”
Newsom’s plan comes as other state’s are looking to move forward with state-based plans instead of waiting for the federal government. Massachusetts, Washington and New Jersey have new or recently expanded policies on the books, and Jim and Claire report Oregon, Colorado and Connecticut are poised to follow. Still, Newsom’s proposal for California would be the most generous.
— And here are a few more good reads from The Post and beyond:
MEDICAL MISSIVES
INDUSTRY RX
REPRODUCTIVE WARS
DAYBOOK
Today
- The 37th annual J.P. Morgan Healthcare Conference begins in San Francisco.
Coming Up
- A joint meeting of the FDA’s Arthritis Advisory Committee and the Drug Safety and Risk Management Advisory Committee is scheduled for Friday.
- Brookings India and Tufts University hold a roundtable on ‘Opportunities for India Beyond 2019: The Future of Health and Geopolitics’ on Jan. 15.
- Politico hosts an event on health care innovators on Jan. 16.
SUGAR RUSH
President Trump said he may declare a national emergency to get funding for his border wall depending on how negotiations develop:
In a wide-ranging interview with CBS News's “60 Minutes,” Rep. Alexandria Ocasio-Cortez (D-N.Y.) said there’s “no question” President Trump is a racist: