HealthCare Roundtable e-News – March 24, 2017

Republican Effort to Repeal ACA Fails

The Republican effort to repeal and replace the Patient Protection and Affordable Care Act (ACA) failed on March 24 when GOP leaders withdrew their proposal just before a vote in the House of Representatives.

Ever since the ACA was enacted in 2010, Republicans have sought to eliminate the law, characterizing its mandates and consumer subsidies as an excessive and expensive government encroachment into the health care sector. The House of Representatives has voted dozens of times to repeal all or part of the ACA, and in January 2016, Congress sent to then-President Barack Obama legislation that would have repealed major portions of the law, which he vetoed. With the GOP holding majorities in both houses of Congress and with Donald Trump in the White House, ACA repeal was to be the fulfillment of both that seven-year-goal and one of Trump’s biggest and most often repeated campaign promises.

In the end, though, Republicans were unable to produce a bill that they could get through the House, even though their majority would have allowed as many as 21 of their members to vote against the legislation. Facing opposition from some moderates who were concerned about Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) projections that the proposal would increase the number of people without insurance by 24 million within a decade and from some conservatives who disparaged the bill as “Obamacare Lite,” Speaker of the House Paul Ryan, R-Wisc., pulled the “American Health Care Act” (H.R. 1628) prior to the scheduled vote. This followed a visit to the White House to tell Trump, who a day earlier had pushed for an up-or-down vote to be held after weeks of negotiating and lobbying, that the bill did not have enough votes for passage.

“Moving from an opposition party to a governing party comes with growing pains,” Ryan said. “And, well, we’re feeling those growing pains today. … I don’t know what else to say other than Obamacare is the law of the land. It’ll remain law of the land until it’s replaced. We’re going to be living with Obamacare for the foreseeable future.”

Leading up to the canceled vote, Ryan had agreed to the demands of conservatives to eliminate the ACA’s requirement that insurers provide coverage for certain “essential benefits,” but even that was not enough to win over members of the right-wing House Freedom Caucus. Democratic Rep. Jim McGovern of Massachusetts described this revision as “so cartoonishly malicious that I can picture someone twirling their mustache as they drafted it in their secret Capitol lair last night.”

Trump, meanwhile, blamed the minority party for the bill’s failure, complaining that, “we had no Democratic support” for the Republican effort to repeal a law that Democrats passed without a single GOP vote. Despite the defeat, he framed the failure to approve the bill as “the best thing that could happen,” saying that the ACA is about to fail amid big premium increases, which will lead to a bipartisan health care reform bill.

“Obamacare, unfortunately, will explode,” Trump said. “It’s going to have a very bad year. & [Then] Democrats will come to us and say, ‘Look, let’s get together and get a great health care bill or plan that’s really great for the people of our country.'”

Democrats have no such expectations and celebrated the preservation of a law that seemed doomed following the election results in November.

“Today is a great day for our country,” House Minority Leader Nancy Pelosi, D-Calif., said. “It’s a victory. What happened on the [House] floor is a victory for the American people – for our seniors, for people with disabilities, for our children, for our veterans. Also, it’s not just about the 24 million people who now won’t be off of health insurance, it’s about the 155 million people who receive their health benefits in the workplace, who will not be assaulted by some of the provisions that the Republicans put in the bill, especially last night when they removed the essential benefits package.”

GOP leaders in Congress are now expected to focus on other parts of the Republican agenda, most likely starting with tax reform. The failure of the health care effort and the ideological divisions within the party, though, have raised some doubts about how effective Republicans will be, even with a unified government. At least one Republican member of Congress offered a bleak forecast for his party before the health care bill was pulled from consideration.

“If we don’t pass this, I personally don’t think we pass a 2018 budget,” Rep. Chris Collins of New York said. “We couldn’t pass a 2017 budget. So if we couldn’t pass a 2017 budget and this happens today, how are we going to pass a 2018 budget? And that’s the vehicle for tax reform. And if you don’t do tax reform, where does the money come from for infrastructure? That’s how critical this vote is today.”

The American Health Care Act would have, among other things:

  • Dropped the ACA’s subsidies for consumers in the state-level insurance exchanges in favor of less generous tax credits to be used in the individual market
  • Repealed the ACA’s expansion of Medicaid and capped federal Medicaid spending
  • Exchanged the ACA’s individual mandate and employer mandate for a 30 percent penalty on the premiums of people who fail to maintain coverage
  • Repealed most of the ACA taxes, but not the “Cadillac tax” on high-value employer-provided health insurance plans
  • Allowed insurers to charge older beneficiaries five times the amount they charge younger people; the ACA limits the ratio to 3:1

The legislation would not have repealed all of the ACA because it was structured so that it could be passed using the budget reconciliation process, which is limited to tax and spending-related measures. This procedure does not allow for filibusters and, thus, would require only a simple majority of votes to get through the Senate, rather than a 60-vote supermajority that would otherwise be needed.

The CBO and JCT forecast that the proposal would result in 14 million more people not having insurance in 2018 and 24 million more people being uninsured in 2026. The bill, according to their report, would have reduced budget deficits by a combined $150 billion between 2017 and 2026.

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House Panel Examines Certain Efforts to Thwart Competition from Generics

A House of Representatives panel held a hearing on March 22 to examine complaints that brand name drug manufacturers are misusing restricted distribution systems to block generic competition.

Generic drug manufacturers and supporters of increased use of generics charge that brand name drug companies sometimes use risk evaluation and mitigation strategies (REMS) and similar programs – some of which are self-imposed – that are typically intended to control the distribution of medicines for which there are safety concerns to deny generic firms access to their products. Without such access, generic firms are unable to show the bioequivalence – or, in the case of biologics, biosimilarity – that is needed for approval by the Food and Drug Administration (FDA).

During the hearing held by a subcommittee of the House Oversight and Government Reform Committee, Bruce Leicher, senior vice president and general counsel of Momenta Pharmaceuticals, said that preventing generic companies from acquiring the brand name drugs they are seeking to copy results in “indefinitely preventing patients from accessing affordable treatment options.”

“We are now forced to consider how difficult it will be to obtain the brand product when selecting generic or biosimilar development programs,” said Leicher, who was speaking on behalf of the Association for Accessible Medicines, which, until recently, had been known as the Generic Pharmaceutical Association (GPhA). “In cases where access is restricted, we have not initiated some programs. Uncertain litigation is often the only option to gain access, and that is too costly and time-consuming for companies like Momenta. Some of the larger companies that have the resources to sustain such litigation have been suing over access to individual products for years.”

FDA Center for Drug Evaluation and Research Director Janet Woodcock said the agency does not have the authority to require brand name companies to turn over samples to generic firms.

In June 2016, Sen. Patrick Leahy, D-Vt., proposed the “Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act” (S. 3056), which would allow generic companies to bring federal lawsuits and seek damages when brand-name companies improperly withhold their products. Leahy has not introduced the bill during the current session of Congress.

The Public Sector HealthCare Roundtable signed on to a June 14, 2016, letter to lawmakers organized by the GPhA that stated that the legislation “would provide a clear solution to abusive, anticompetitive business practices that increase costs to the American health care system by impeding patient access to generic medicines.”

“These abuses are growing and the resulting delay in generic and biosimilars competition is costing patients, the federal government, and the health care system billions of dollars annually,” the letter stated.

Besides GPhA and the Roundtable, 13 other groups also signed on to the letter, including the National Coalition on Health Care, Public Citizen and the UAW Retiree Medical Benefits Trust.

The Roundtable also signed on to a letter supporting efforts to address the issue in December 2015.

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Three European Drug Trade Groups Release Guidelines Related to Biosimilars

Three brand name pharmaceutical organizations in Europe have released guidelines for switching between biologics and biosimilars that have been approved to treat the same condition.

Biologic drugs are highly advanced medicines derived from biological, rather than chemical, processes. They are among the most innovative of drug treatments and, as such, are also among the most expensive, potentially costing tens, even hundreds, of thousands of dollars each year for a single patient. Generic biopharmaceuticals, known as biosimilars, offer lower-cost alternatives, as with generic versions of traditional drugs.

Only four biosimilars have been approved for sale in the United States so far, but 24 are sold in Europe.

Since biologics are made from living organisms, they, unlike traditional generics, can never be exact copies. As a result, the European Federation of Pharmaceutical Industries and Associations, the International Federation of Pharmaceutical Manufacturers & Associations, and European Biopharmaceutical Enterprises released a position paper that stated:

“The complex nature of biological molecules, which are often used to treat patients who have multifaceted chronic diseases, means that any decision to switch should be made on a case-by-case basis and must be patient, disease and product specific. A ‘one size fits all’ approach is not appropriate. Rather, it is important for the physician to balance the level of evidence against the level of risk or uncertainty in each particular case.”

Some European governments are using – or are considering using – pressure or incentives to get doctors to prescribe biosimilars as much as possible.

The paper lists six “key considerations” for switching from a brand name biologic to a biosimilar or switching between biosimilars for the same condition. It also identifies two situations in which switching is not recommended: when the initial treatment loses efficacy or there are tolerability issues, and if the physician thinks that switching would compromise future treatment options.

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