Health Update (September 30)
Speaker Nancy Pelosi’s (D-CA) recently unveiled drug pricing plan, the Lower Drug Costs Now Act of 2019 (H.R. 3), had hearings this week in both the House E&C and Ed.& Labor Committees. However, it is likely to take a backseat on Capitol Hill with the recent impeachment inquiry led by House Democrats into President Trump. Also atop the healthcare headlines this week was news out of the Senate Finance Committee as it released the text of the Drug Pricing Reduction Act, along with a response from Centers of Medicare and Medicaid Services (CMS) about the Medicaid program in Puerto Rico. Elsewhere, CMMI Director Adam Boehler will be departing as he was confirmed by the Senate to lead U.S. investment in developing countries.
House Energy & Commerce Hearing
The House Energy & Commerce Committee’s Subcommittee on Health held a hearing on Wednesday (Sep. 25) entitled: “Making Prescription Drugs More Affordable: Legislation to Negotiate a Better Deal for Americans.” The Committee’s hearing on Speaker Pelosi’s new drug pricing plan was quite contentious from the start, as Ranking Member Michael Burgess (R-TX) and Ranking Member (Full Committee) Greg Walden (R-OR) blasted Democrats for succumbing to the speaker’s plan instead of working in a bipartisan manner on drug pricing and surprise billing legislation, which both parties worked on up until the August recess. Walden has shown his frustration for the process throughout the last few hearings in the subcommittee. Committee Democrats led by Chairwoman Anna Eshoo (D-CA) continually dropped statistics on rising out of pocket costs for Americans and stressed the need to pass legislation. Rep. John Sarbanes (D-MD) railed against the role of big pharma lobbyists in maintaining high drug prices and said the tides are finally turning against their influence. Committee Republicans maintained their disdain for H.R. 3 during their five minute remarks, but finally cooled once Eshoo promised to go through regular order with a subcommittee markup of the bill. To read a more detailed summary of this hearing, click here.
House Ed. & Labor Hearing
The House Education and Labor Committee’s Subcommittee on Health, Employment, Labor, and Pensions held a hearing on Thursday (Sep. 26) entitled: “Making Health Care More Affordable: Lowering Drug Prices and Increasing Transparency.” Committee Republicans, led by Ranking Member Tim Walberg (R-MI), lashed out at H.R. 3 and the process of the rollout of the bill. Walberg called it a socialist, partisan act and noted that the bill might make it through the House but has no chance of becoming law. Committee Democrats fought back and highlighted the potential for lower costs through price negotiations and recounted the large number of Americans that continue to be hurt by these high drug prices, by taking lower doses of drugs, or even outright not taking them to avoid having their bank accounts take large hits. The hearing became very contentious when Rep. Rick Allen (R-GA) asked questions during his allotted time, and two of the witnesses, Mr. Frederick Isasi, the Executive Director of Families USA, and Dr. Craig Garthwaite, a Professor at Northwestern University’s Kellogg School of Management, argued over government price negotiations. Garthwaite claimed that other countries walk away from negotiations and the U.S. doesn’t want to follow that model, while Isasi argued that H.R. 3 doesn’t involve walking away from negotiating and that the negotiated-drug would still be available. To read a more detailed summary of this hearing, click here.
Senate Finance Bill Released
The Senate Finance Committee released the text of its sweeping bill to reform drug pricing: S. 2543, the Drug Pricing Reduction Act. Chairman Chuck Grassley (R-IA) pitched the bill, which the committee advanced in July on a 19-9 vote, as a bipartisan solution to high drug costs. But other Republicans have been hesitant to get on board, pointing to controversial provisions such as a measure to cap price increases in Medicare Parts B and D at the rate of inflation. Senate Majority Leader Mitch McConnell (R-KY) has not committed to allowing a vote on the bill, though President Trump has tweeted his support. The text hews closely to Grassley’s mark that passed committee, including the inflation caps and provisions requiring transparency, such as rebate disclosures, from pharmacy benefit managers. Senate Finance Committee Ranking Member Ron Wyden (D-OR) said he hopes the Senate and House will work together to get a bill to the president’s desk. But several Republicans argued that Pelosi’s drug pricing legislation, rolled out this month with provisions allowing for federal pricing negotiation, amounts to government price controls.  A full text of the bill can be found here.
Puerto Rico Medicaid Program
Grassley received a response from Centers of Medicare and Medicaid Services (CMS) Administrator Seema Verma to a July 17, 2019, letter penned with several Finance Committee Republicans. Grassley’s original letter sought information on how much Medicaid funding Puerto Rico receives, what processes, if any, are in place to reduce waste fraud and abuse of federal dollars allocated to its Medicaid program, and what timelines are in place for Puerto Rico to implement transparency processes in the program. “Oversight of Puerto Rico’s Medicaid program is a duty of the Senate Finance Committee that I take very seriously, even more so given the disarray in the Puerto Rican government,” Grassley said. “Longer-term discussions have been ongoing, and as I’ve been reviewing the statements made by Puerto Rican officials and new data from HHS, there are inconsistencies that need more explanations. There are proposals on Capitol Hill to raise the federal matching rate significantly for Puerto Rico, but Congress must have a thorough and serious discussion before enacting such policies. It’s my goal to provide Medicaid beneficiaries the help they need while holding the government accountable as stewards of the program.” The statutory federal matching rate for Puerto Rico is 55 percent. However, the response letter from CMS shows that the effective matching rate is much higher. Letters and conversations with the Puerto Rican government have only mentioned the 55 percent rate. Grassley intends to follow up with CMS on this and other issues. Text of Grassley’s July 17, 2019 letter is available here. Text of the response letter from HHS is available here. 
New CMMI Director
The Senate confirmed CMMI Director Adam Boehler by voice vote to lead U.S. investment in developing countries, a merging of two government entities that’s launching Oct. 1. Boehler has led the CMS Innovation Center since April 2018 and has shaped HHS strategy on value-based care as a senior advisor to HHS Secretary Alex Azar. Boehler’s speedy confirmation caught HHS by surprise; agency leaders were expecting the vote would slide to mid-October or later. Now HHS faces a quick decision about who to tap to lead the powerful innovation center — one expected to be made as soon as this weekend. 
 Owermohle, Sarah. “Text of Senate Finance Committee drug-pricing bill is released.” Politico Pro. 25 Sept. 2019. https://subscriber.politicopro.com/article/2019/09/text-of-senate-finance-committee-drug-pricing-bill-is-released-3909357
 “Grassley receives more questions than answers from CMS on Puerto Rico Medicaid program.” Politico Pro. 23 Sept. 2019. https://www.grassley.senate.gov/news/news-releases/grassley-receives-more-questions-answers-cms-puerto-rico-medicaid-program
 Roubein, Rachel. “CMMI Head Confirmed to New Post.” Politico Pro. 27 Sept. 2019. https://subscriber.politicopro.com/newsletter/2019/09/new-leader-looms-at-cms-innovation-center-762172