HealthCare Roundtable e-News – April 13, 2021

Fiscal 2022 Discretionary Budget Includes Funding for HCBS, No Confirmation on Drug Pricing Offsets

President Joe Biden on Friday released his fiscal year 2022 discretionary budget preview, which builds off health priorities from the president’s American Rescue Plan enacted last month. The budget preview only includes discretionary spending and does not include tax proposals or mandatory spending on programs like Medicare, nor does it include drug pricing offsets.

The budget preview includes the proposed American Jobs Plan by calling for additional funding for home- and community-based services (HCBS), $10.7 billion to tackle the opioid crisis, increased funding for Health Resources and Services Administration to help rural health care providers, as well as funding for residency programs and efforts to increase medical training for rural citizens. Overall, an additional $551 million will go towards funding for HCBS on top of $400 billion that would be dedicated to the services through Biden’s infrastructure plan. (InsideHealthPolicy)

Despite general interest in drug pricing, there were no formal drug pricing measures included in the president’s budget preview. However, it’s expected that the measures will appear in the president’s budget request this spring, according to senior administration officials who said the budget will include offsets. According to House Speaker Nancy Pelosi (D-Calif.) and other congressional leaders, drug pricing is expected to be one of the primary offsets for the administration’s health priorities.

Confirmation Hearings set for CMS Administrator and Deputy HHS Secretary Nominees on April 15

The Senate Finance Committee is preparing to hold confirmation hearings for Biden’s nominees to take on the roles of CMS administrator and Deputy HHS Secretary later this week. Chiquita Brooks-LaSure, Biden’s pick to lead CMS, had previously held the position of deputy director for policy at the Center for Consumer Information and Insurance Oversight during the Obama administration, while Andrea Palm, also an Obama administration alum, is Biden’s pick to take on the role of Deputy HHS Secretary.

If confirmed, Brooks-LaSure would become the first Black woman to become the head of CMS. Most recently, Brooks-LaSure has been an adviser on Medicare and Medicaid policy at law firm Manatt. Avalere CEO Dan Mendelson, who had previously worked with Brooks-LaSure, praised her nomination.

“Chiquita has very broad experience at CMS, and also has experience in the major governmental organizations where CMS collaborates,” Mendelson said. “She is also an outstanding listener which combined with her experience will help her succeed.”

Palm, the nominee for Deputy HHS Secretary, has also held several positions within the Obama administration, including acting assistant secretary and chief of staff to the secretary. Palm had also served as secretary-designee for Wisconsin’s Department of Health and Human Services under Gov. Tony Evers (D).

Backlog in FDA Onsite Facility Inspections Leads to Risk of Exclusivity for Generic Drug Manufacturers

The FDA unveiled its latest guidance last week for generic drug manufacturers, notifying drugmakers that the agency may not allow producers in the industry to meet requirements for tentative approval and, therefore, qualify for 180-day exclusivity. The guidance is likely the result of a backlog of onsite facility inspections that the agency is currently grappling with.

The guidance raises questions or whether the FDA will use its authority to disqualify companies from exclusivity, though according to some sources, it’s more likely the agency will require inspections in order for a company to qualify. If the FDA chooses to disqualify companies, the question still remains on how the agency would decide which companies qualify and which don’t. According to Kalah Auchincloss, senior vice president of regulatory compliance and deputy general counsel at Greenleaf Health, it’s unlikely the FDA will cause a company to forfeit its exclusivity simply because the agency was unable to conduct an inspection. If the agency opted to disqualify companies, it would likely disincentivize generic drug development and lead to many losses for the industry overall.

“If exclusivity were lost, I think there would need to be other circumstances that warranted forfeiture, in addition to not being able to conduct an inspection,” Auchincloss said. However, because there were not many (if any) instances of ANDA exclusivity forfeiture happening during the COVID-19 pandemic, Auchincloss also believes that it would be unlikely the FDA would start the process now only as it begins to restart onsite inspections. (InsideHealthPolicy)

Some lawyers believe that the agency’s guidance on inspections is in response to pressure from congressional leaders who are concerned about the FDA’s inspection backlog. The agency responded that they are in the process of assessing technology and tools to explore how the agency might better conduct remote facility inspections and ease the backlog.

Congressional Leaders Set Focus on Drug Price Offsets in Anticipation of Health Care Priorities Roll-Out

House and Senate leaders are waiting in anticipation of the health care components of President Biden’s two-part infrastructure package, which is expected sometime this spring. Ultimately, the president’s health priorities will be determined by how much Congress can get to offset the cost of the plan, which many congressional leaders have said in recent months could come from drug price legislation.

According to sources, the highest priority for the package may be addressing the gap in coverage that keeps Americans who make less than the poverty level from accessible health coverage, since they’re neither eligible for Medicaid nor ACA subsidies. Some Democrats have discussed prioritizing the lowering of the Medicare age to 60 or younger and adding vision, dental and hearing benefits, while others in Congress believe lawmakers should focus on finding a way to cover the millions of Americans with no insurance due to their states’ refusal to expand Medicaid. (InsideHealthPolicy)

Drug pricing legislation, which most lawmakers believe will help pay for the price tag of Biden’s infrastructure package, has been a priority for many Congressional leaders in recent years. In 2019, former Senate Finance Committee Chair Chuck Grassley (R-Iowa) and then-minority leader Ron Wyden (D-Ore.) collaborated on bipartisan legislation to lower drug prices, but the bill stalled in the Senate and failed to garner enough support from other members of the GOP. In June 2020, House leadership turned again to H.R. 3 and hoped to use the savings to offset their massive ACA improvement bill (H.R. 1425). But the 2020 bill also stalled in the Senate. (InsideHealthPolicy)