January 10, 2023
Health Policy Report – January 10, 2023
118th Congress Elects Speaker, Selects Committee Chairs After Rocky Start
Just after midnight on Saturday morning, after fifteen painstaking votes, the 118th Congress elected Representative Kevin McCarthy (R-CA) as Speaker of the House. The hold-up was due to a group of 20 defecting Republicans predominately aligned with the House Freedom Caucus. This is the first time since 1923 that the House had been unable to select a speaker on the first day of a new Congress, indicating future turmoil and division within the narrow Republican majority, despite wresting control of Congress from Democrats in the midterm election.
With the conclusion of the Speaker vote, House Republicans moved on to finalizing Committee chairs. Congressman Jason Smith of Missouri beat Congressmen Vern Buchanan of Florida and Adrian Smith of Nebraska for the top slot on the Ways and Means Committee, which has jurisdiction over Medicare, Social Security, the tax code, and trade policy. Congressman Jodey Arrington of Texas beat Congressmen Buddy Carter of Georgia and Lloyd Smucker of Pennsylvania for the top post on the House Budget Committee, previously held by Congressman Jason Smith. Congresswoman Cathy McMorris Rodgers of Washington will remain the lead Republican on the House Energy and Commerce Committee.
In the Senate, where Democrats maintained their majority, Senator Bernie Sanders (I-VT) is expected to become Chair of the Health, Education, Labor, and Pensions (HELP) Committee. In this role, Senator Sanders plans to tackle high drug prices and fight against drug makers’ and insurers’ lobbying efforts. While he has yet to release a full agenda, Senator Sanders is known for supporting Medicare-for-All and previously spoke in favor of drug importation to help lower costs. Senator Ron Wyden of Oregon will remain the lead Democrat on the Finance Committee.
To read Congressman Smith’s statement on his selection as Chair of the House Ways and Means Committee, CLICK HERE.
To learn more about Congressman Arrington’s vision for the House Budget Committee, CLICK HERE.
To learn more about Senator Bernie Sanders’ potential health agenda, CLICK HERE.
Representatives Jayapal and Spartz Introduce Bill to Stop Hospitals’ Anticompetitive Behavior
In the waning days of the 117th Congress, Representatives Pramila Jayapal (D-WA) and Victoria Spartz (R-IN) introduced the bipartisan Stop Anticompetitive Healthcare Act, which intends to expand the Federal Trade Commission’s (FTC) ability to enforce antitrust laws on non-profit hospitals. Under current law, the FTC does not have the authority to oversee non-profit hospital systems’ impact on market consolidation and competition.
Both lawmakers highlighted a 2020 Medicare Payment Advisory Commission (MedPAC) report that found hospital mergers lead to higher healthcare prices for patients. If enacted, the Stop Anticompetitive Healthcare Act would clarify that the Federal Trade Commission Act covers non-profit hospitals under unfair methods of competition law in the same manner that it monitors for-profit hospitals. The goal is to increase scrutiny over market consolidation, increase competition, and lower healthcare costs.
“Being able to access quality, affordable healthcare is crucial to living well and to thriving. There is no question that hospital consolidation hurts patients by causing healthcare costs to jump and removing choice,” said Congresswoman Pramila Jayapal, who also chairs the Congressional Progressive Caucus. “Hospital consolidation and lack of competition is a major factor driving unsustainable health care prices,” said Congresswoman Victoria Spartz.
To read more about the bill, CLICK HERE.
To read the MedPAC report, CLICK HERE.
Congressional Inquiry Finds FDA-Biogen Ties During the Aduhelm Approval Process ‘Highly Atypical’
On December 29, Democrats on the House Oversight and Energy and Commerce committees released a report following an 18-month investigation into the Food and Drug Administration’s (FDA) regulatory review and approval process of Biogen’s Alzheimer’s drug Aduhelm. In a statement released with the report, then-Chairman Frank Pallone (D-NJ) called the FDA review process for Aduhelm “atypical.” Among other findings, the report claims that the FDA did not follow agency protocol for documenting interactions with drug companies and alleges that the FDA and Biogen “inappropriately collaborated on a joint briefing document for a key advisory committee.
The report recommends that the FDA improve its documentation of meetings and clarify proper protocols to avoid future irregularities. The FDA has said it already began implementing the recommendations provided.
Biogen released a statement following the committees’ report saying it stands by the integrity of its actions and will continue to engage diverse stakeholders as it launches Aduhelm.
On January 6, the FDA granted accelerated approval to another drug, Leqembi (lecanemab), intended for patients in the early stages of Alzheimer’s. The drug was developed by Eisai in partnership with Biogen and will be priced at $26,500 per year. Under current CMS policy, coverage for Alzheimer’s drugs approved on an accelerated basis is limited to patients enrolled in a randomized clinical trial. Shortly after the accelerated approval was announced, Eisai and Biogen announced they would seek full FDA approval.
To read the full report, CLICK HERE.
To read Biogen’s response, CLICK HERE.
HHS Inspector General Finds Gaps in Part B Oversight
On January 3, the Office of the Inspector General (OIG) of the Department of Health and Human Services (HHS) released two new reports exposing gaps in the Centers for Medicare & Medicaid Services’ (CMS) oversight of pharmaceutical companies’ drug pricing practices under Medicare Part B. Both reviews were required by the Consolidated Appropriations Act of 2021, which directed OIG to review the accuracy of manufacturer-reported ASP data.
In the first report, the OIG found that CMS failed to accurately monitor the average sales price (ASP) reported by drug manufacturers. The OIG reviewed Medicare Part B ASP and drug payment data from 2016 to 2020 and determined that CMS did not correctly implement reductions in Part B payments for multiple drug codes, which resulted in a loss of $2.8 million in savings to Medicare and its enrollees. CMS was also unable to calculate an ASP-based payment amount for 8 percent of drug codes at least once between 2016 and 2020 due to missing or invalid ASP data. The OIG recommended that CMS strengthen its internal controls to ensure the accuracy of Part B drug payments.
The second OIG report identified “a small number of inconsistencies in manufacturer calculations of ASPs,” such as for TRICARE-related drugs sales and whether certain fees paid to third parties meet the criteria for being considered a “bona fide service fee” to be excluded from ASP. This report also identified areas where manufacturers would like additional guidance, such as regarding the treatment of sales and rebates offered through value-based purchasing arrangements. In total, OIG noted nine areas where CMS should review current guidance and determine whether additional clarification may prove beneficial.
PBMs, Drug Formularies Stunt Access to Biosimilars
Despite nearly 40 FDA-approved biosimilars being on the market, only three are currently interchangeable. Pharmaceutical benefit manager (PBM) rebate agreements have significantly impacted the ability of plans to offer lower-cost alternatives on their formularies. In turn, this has reduced patient access to biosimilars and likely led to more money being spent than if biosimilars were more readily available. According to a report by the IQVIA Institute for Human Data Science, widespread access to biosimilars could save $133 billion by 2025.
The rebate system, through which biosimilar manufacturing companies feel compelled to offer high rebates to PBMs to secure access to certain formularies, is anti-competitive and contributes to higher drug spending—even when lower-cost alternatives are available. In May, the Biosimilar Forum wrote a letter urging the Federal Trade Commission (FTC) to investigate and litigate against PBMs that erect unfair and anticompetitive barriers intended to block access to biosimilars.
On December 8, the Pharmaceutical Care Management Association (PCMA), the industry group representing PBMs, released a set of policy recommendations to remove barriers to biosimilars and lower drug costs. PCMA’s policy recommendations include removing the “interchangeability designation” on biosimilars, ending pharmaceutical companies’ “pay for delay” practices, and prohibiting anticompetitive practices that unnecessarily extend branded biologic monopolies.
To read the IQVIA Institute for Human Data Science study, CLICK HERE.
To read the May letter from the Biosimilars Forum to the Federal Trade Commission, CLICK HERE.
To read the PCMA’s policy recommendations to remove barriers to biosimilars, CLICK HERE.