HealthCare Roundtable e-News – July 29, 2020

Roundtable Opposes Trump Efforts to Eliminate Rebates

On Friday, July 24, President Trump signed several Executive Orders aimed at addressing the rising cost of drugs in the U.S. Regrettably, the President chose to move forward to eliminate rebates in Medicare Part D – a policy the Roundtable has been vocally opposed to since proposed initially in 2018. We are working closely with bipartisan congressional offices as well as national stakeholder allies to address the Administration’s decision. 

In order to better understand the details of the executive actions from Friday, our colleagues at Healthsperien have authored a memo to provide further insight into the structure of the proposals as well as policy and political considerations. The memo can be found here.

Please do not hesitate to contact Roundtable Senior Policy Advisor, Andrew MacPherson, with questions.

Trump Signs Executive Orders on Drug Pricing Policies

Last Friday (Jul. 24), the Trump administration announced a series of executive orders aiming to reboot proposals that, in several cases, have stalled or been killed by administration officials. Among the four orders is a policy that looks to compare Medicare Part B drug prices to those abroad (also known as the international pricing index), the banning of pharmacy benefit managers’ use of drug rebates, and a new proposal that would make health centers give patients the significant discounts that health centers get on insulin and epinephrine through the 340B program.

HHS Secretary Alex Azar defended the administration’s actions, commenting that the executive orders “make clear these are the policies of his administration…these will happen. He has ordered them to happen. Debate is over.” Some critics, including House Ways & Means health subcommittee chair Rep. Lloyd Doggett, have suggested that the president is “recycling dormant proposals” and other rejected policies, including a “Big Pharma-promoted rebate rule” that opponents say would only increase premiums and government spending. (InsideHealthPolicy)

Trump used the signing ceremony as an opportunity to call out the drug industry and address the administration’s complaints, encouraging industry players to visit the White House this week to discuss the orders, as well as executives’ proposals for an alternative to the international pricing index. The pharmaceutical executives chose not to attend the meeting this week. (InsideHealthPolicy)

Senate GOP Circulates Draft COVID-19 Bill Including More Than $50B for COVID-19 Testing, Vaccines

Details on the Senate GOP’s COVID-19 relief bill have emerged as Senate Finance Committee Chairman Chuck Grassley (R-IA) released details early Tuesday, July 28. The summary draft includes $25 billion in funds HHS to commit to COVID-19 testing, $26 billion for the research and distribution of a COVID-19 vaccine, and $15.5 billion for National Institutes of Health labs and research.

“We have one foot in the pandemic, and one foot in the recovery. The American people need more help. They need it to be comprehensive, and they need it to be carefully tailored to this crossroads. That is what this Senate majority has assembled,” said Senate Majority Leader Mitch McConnell (R-Ky.). Democrats were critical of the bill, with Minority Leader Chuck Schumer (D-N.Y.) commenting that Republicans “ran down the clock and tossed an air ball.”

The proposal includes elements of the Trust Act, a bill introduced in 2019 by Sen. Mitt Romney (R-Utah), which would examine the health of the Medicare Trust Fund, as well as other trust fund-supported programs. Experts believe that the COVID-19 crisis could significantly shorten the period of time before the Medicare Part A Trust Fund becomes insolvent. The bill aims to resolve this threat, suggesting that congressional rescue committees would help to develop recommendations and legislation to improve critical social contract programs. Hospitals had previously called on Congress to make changes to the Medicare loan programs, and the draft summary includes a provision to give providers until Jan. 1 before they have to start paying back those loans. (InsideHealthPolicy)

Negotiations are expected to begin this week with Democrats, who have supported a proposed $3.5 trillion plan that was passed by the House earlier this year. The $600 weekly addition to unemployment benefits approved for Americans back in March have effectively ended this past weekend, though it won’t officially expire until July 31. Senate Republicans are proposing a scaled-back continuation of the benefits as well as another round of $1,200 stimulus checks.

Azar Extends COVID-19 Public Health Emergency Before July 25 Deadline

On Thursday (Jul. 23), HHS Secretary Alex Azar renewed the COVID-19 public health emergency shortly before it was set to expire July 25. The continuation of the order gives the Trump administration authority to extend temporary payments, loosen telehealth restrictions and waive Medicare regulations. (InsideHealthPolicy)

Confirming the emergency’s extension, Azar tweeted, “Today I signed a renewal of the COVID-19 national public health emergency declaration. The Administration will continue its whole-of-America response to ensure Americans can get the care they need throughout the pandemic.”

The COVID-19 public health emergency was declared back in January and was set to expire on Saturday, July 25. Many of the flexibilities that benefit hospitals and patients would have vanished without the order extension, specifically the 20% Medicare add-on payment for admitted COVID-19 patients that is discontinued once the emergency is over. Other changes that are set to continue through the emergency order include the 6.2 percentage point increase to the federal share of Medicaid funding and tweaks to value-based care programs from the CMS innovation arm.

A public health emergency declaration lasts for 90 days after the HHS secretary declares the emergency or until the secretary says an emergency no longer exists.

Appeals Court Upholds California Pay-For-Delay Bill

Last Friday (Jul. 24), a federal appeals court voted to uphold a California law that bans pay-for-delay settlements between brand and generic drugmakers. Generic drug makers had filed an appeal against the law in November of last year, claiming that they had been hurt financially as a result of the law.

California Gov. Gavin Newsom (D) had signed the state’s pay-for-delay law last October, which bans brand drug companies from paying generic competitors to delay research, production or sales. The Association for Accessible Medicines (AAM) filed a suit against the law in the United States District Court Eastern District of California, asking the court to declare the law unconstitutional. (InsideHealthPolicy) I

In their appeal, AAM claimed that the law could potentially harm patients by denying them earlier access to affordable generic and biosimilar medicines, but circuit judge Troy Nunley said the predictions were speculative, commenting that the lobby “has not shown that there is a ‘substantial risk’ that AB 824 [pay-for-delay law] will cause any of its members to suffer injury that is concrete, particularized, and imminent.” The court’s decision was celebrated by California Attorney General Xavier Becerra, commenting that “Californians shouldn’t have to pay and arm and leg to afford a prescription.” (InsideHealthPolicy)