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February 5, 2024

This Week in Health Policy for February 5

This Week (February 5 - 9)

Both the House and Senate will be in session as lawmakers continue to work toward an agreement ahead of March spending deadlines.

House Energy & Commerce Oversight and Investigations Subcommittee will hold a hearing on "Protecting American Health Security: Oversight of Shortcomings in the FDA's Foreign Drug Inspection Program."

  • Date: Tuesday, February 6 at 10:30am ET
  • More information available here.

Senate Finance Committee will hold a hearing on "Artificial Intelligence and Health Care: Promise and Pitfalls."

  • Date: Thursday, February 8 at 10am ET
  • Witnesses: Peter Shen of Siemens Healthineers; Mark Sendak, of Health AI Partnership; Michelle Mello of Stanford University, Ziad Obermeyer of University of California; Katherine Baicker of University of Chicago
  • More information available here.

Senate HELP Committee will hold a hearing on "Why Does the United States Pay, by Far, the Highest Prices in the World for Prescription Drugs?"

  • Date: Thursday, February 8 at 10am ET
  • More information available here.

House Budget Committee may hold a markup of the Preventative Health Savings Act.

  • Date: TBD
  • More information available here.

 Last Week (January 29 - February 2)

Health Care Highlights

House passes tax package with R&D provision. On Wednesday (January 31), the House voted 357-70 to pass the $78 billion Tax Relief for American Families and Workers Act of 2024 (H.R. 7024), which includes provisions to to expand the Child Tax Credit (CTC), and a research and development (R&D) expensing provision to delay a Tax Cuts and Jobs Act change requiring businesses to deduct their R&D expenses over five years, instead of allowing for immediate deduction, among other provisions. Plans for Senate consideration aren't yet clear, but some Republicans want to amend the bill and others have reservations about it generally. Senate Majority Leader Chuck Schumer (D-NY), who has expressed support for the bill said on January 31, "I'm working with Senator Wyden to figure out the best way forward." It's unclear if the bill will be marked up in the Finance Committee or brought straight to the floor, and whether it could come up as a standalone bill or be attached to appropriations legislation required to meet March 1 and March 8 deadlines.

CMS issues CY 2025 MA, Part D Advance Notice. On Wednesday (January 31), the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2025 Medicare Advantage (MA) and Part D Advance Notice, which includes a projected 3.7% payment bump for MA plans in CY 2025. This amounts to a $16 billion increase in overall payments for CY 2025, when compared with CY 2024, but represents a nearly 0.2% reduction in the 2025 benchmark rate. CMS also released Part D Redesign Program Instructions, providing additional detail regarding implementation of the Inflation Reduction Act's (IRA) Part D drug benefit changes. Comments on the Advance Notice and Part D Redesign Program Instructions must be submitted by 6:00 PM Eastern Time on Friday, March 1, 2024. The 2025 Rate Announcement and the Final CY 2025 Part D Redesign Program Instructions will be published no later than Monday, April 1, 2024. Click here for the Press Release, Click here for the Advance Notice Fact Sheet, Click here for the Draft Part D Redesign Program Instructions, Click here for the Draft Part D Redesign Fact Sheet, Click here for the Advance Notice.

SAMHSA removes in-person requirement for telehealth opioid treatments. On Wednesday (January 31), the Substance Abuse and Mental Health Services Administration (SAMHSA) issued the Medications for Treatment of Opioid Use Disorder final rule that allows providers in Opioid Treatment Programs to prescribe buprenorphine via telehealth, including audio-only, without an in-person visit, and gives them more flexibility to prescribe larger doses of methadone and decide when patients can take the drug at home. The rule also implements a provision of the Consolidated Appropriations Act of 2023 that eliminated the "X-waiver" requirement for dispensing or prescribing schedule III, IV or V controlled substances approved by the US Food and Drug Administration (FDA) for use in "maintenance and detoxification treatment." The rule, which only applies to Opioid Treatment Programs, takes effect April 2, with compliance beginning October 2, 2024. The Drug Enforcement Agency is working on rulemaking that will apply to non-OTP providers, such as community physicians and hospitals.

FDA updates quality standards for medical devices. On Wednesday (January 31), FDA issued a final rule updating quality system regulations for medical devices, known as the Quality Management System Regulation (QMSR). The rule brings the US into alignment with other countries' device quality standards by calling for device sponsors to adopt the International Standards Organization (ISO) device quality standard. In response to industry feedback, FDA finalized a two-year phase-in period, meaning full compliance will begin February 2026.

Medicare sends first drug negotiation offers. On Thursday (February 1), CMS sent drugmakers their initial offers for the 10 prescription drugs selected for the first round of Medicare drug price negotiations. Drugmakers have until March 2 to accept CMS' offer or propose a counteroffer, with final prices scheduled to be set by September 1.

CMS announces first Cell and Gene Therapy Access Model. On Tuesday (January 30), CMS announced that sickle cell disease will be the first focus of the Cell and Gene Therapy Access Model, which is set to begin in January 2025. The model is designed to test outcomes-based arrangements with state Medicaid programs that link sickle cell treatment pricing to health outcomes for patients. CMS will negotiate outcome-based agreements with manufacturers who elect to participate. CMS will host a webinar on February 6 to provide more information. Click here for a press release. Click here for a fact sheet.

HHS unveils plan to combat syphilis. On Tuesday (January 30), HHS announced new actions its has taken and will take in the new year to reduce the growing number of syphilis and congenital syphilis cases in the US. According to a newly published CDC report, syphilis cases have increased 80% since 2018.

White House provides update on AI EO activity. On Monday (January 29), the White House released a fact sheet detailing actions taken by the Biden-Harris administration to implement Biden's Executive Order (EO) on AI issued in October 2023. The fact sheet shows that the administration has completed all of the 90-day actions outlined in the EO, as well as many of the longer-term directives.

Senate 340B bipartisan working group release discussion draft. On Friday (February 2), members of the Senate 340B bipartisan working group released a legislative discussion draft that would make updates to the 340B program. Last year, the group sought input on bipartisan policy solutions that would provide stability and transparency to the 340B program to ensure the program can continue to achieve its original intent of supporting entities serving eligible patients. In a letter sent to stakeholders today, the group indicates that passing legislation in the 118th Congress remains a top priority.

House Budget Committee announces markup of CBO Preventive Health Scoring bill. In a House Budget Committee hearing this week, Representative Burgess announced the Committee would mark up the bipartisan, bicameral Preventative Health Savings Act (S.114/ H.R.766), which would require the Congressional Budget Office to consider savings from preventive health measures over a 30 year period, rather than the current 10 year period.

Hearings, Markups, and Other Committee Activity

House Energy & Commerce Subcommittee on Health held a hearing titled "Health Care Spending in the United States: Unsustainable for Patients, Employers, and Taxpayers." On Wednesday (January 31), the subcommittee heard from a panel of witnesses representing academics, economists, patient advocates, state plan administrators, and the Congressional Budget Office (CBO). The hearing centered on ways the House-passed Lower Costs, More Transparency Act (LCMT) would increase transparency and competition in the health care market to lower health care costs for patients and employers, with committee leaders calling for the Senate to quickly take up the bill. Many lawmakers also focused their questions on ways to build on the LCMT and increase transparency into Medicare Advantage plans, private equity (PE) ownership in health care, the drug supply chain, as well as reducing incentives for horizontal and vertical consolidation in health care. Committee Chair Cathy McMorris Rodgers in her statement also suggested an increased focus on consolidation and lack of price transparency in vision insurance. Several lawmakers also asked direct questions about CBO's scoring practices in relation to drug innovation, weight loss drugs, and preventive care and early diagnosis. Many lawmakers have been critical of CBOs methodology for scoring proposals that reduce health care costs by catching diseases earlier and enabling patients to live longer.

  • More information available here.

Senate Health, Education, Labor & Pensions Committee cancelled a scheduled hearing on " Authorization for Investigation into the High Costs of Prescription Drugs and Related Subpoenas." Committee Chair Bernie Sanders (I-VT) cancelled the hearing, which was scheduled for Wednesday (January 31), after the CEOs of Merck and Johnson & Johnson agreed to testify before the committee on February 8 alongside the CEO of Bristol Myers Squibb.

  • More information available here.

Senate Committee on Veterans' Affairs held a hearing on "Vet Centers: Supporting the Mental Health Needs of Servicemembers, Veterans and their Families." On Wednesday (January 31), the Committee heard testimony from a group of witnesses representing the Veterans Health Administration, the VA's Office of Inspector General, and the Government Accountability Office on ways to improve mental health services and access to mental health services for servicemembers, veterans, and their dependents.

  • More information available here.

House Committee on Oversight and Accountability held a hearing on "Overseeing the Department of Health and Human Services' Compliance with Congress." On Wednesday (January 31), the Committee heard testimony from HHS Assistant Secretary for Legislation Melanie Egorin who said the Department had provided more than 30,000 pages of documents and responded to thousands of congressional letters, inquiries, and requests for information and assistance since the 118th Congress began. Ms. Egorin fielded many questions on ways HHS could be more responsive to congressional inquiries, with several Republican members critiquing the department's compliance with congressional requests.

  • More information available here.

Senate Committee on Homeland Security and Governmental Affairs held a mark up of several bills. On Wednesday (January 31), the Committee advanced several measures but ultimately delayed consideration of a bill (S. 3558) that would prohibit federal agencies from contracting with or obligating loans or grants to entities that use biotechnology equipment or services provided by a biotechnology "company of concern."

  • More information available here.

House Budget Committee held a hearing on "Creating a Culture of Fiscal Responsibility: Assessing the Role of the Congressional Budget Office." On Wednesday (January 31), the Committee heard testimony from CBO Director Phillip Swagel on the methodologies and timeline CBO uses to analyze legislation. During the hearing, Swagel said the agency is working to incorporate new research into its considerations of the budgetary impact of proposals to allow Medicare coverage of anti-obesity medications. Swagel said CBO also is re-examining methodologies and data related to hepatitis C drugs.

  • More information available here.

Senate Judiciary Committee held a hearing on "Big Tech and the Online Child Sexual Exploitation Crisis." On Wednesday (January 31), the Committee heard testimony from social media CEOs, who fielded questions and criticism from both Democratic and Republican senators on their platforms' impact on children's mental health. Lawmakers and witnesses also discussed the bipartisan Kids Online Safety Act, which has support from some social media companies, but advocacy groups have raised concerns about the potential for increased data collection and privacy violations.

  • More information available here.

Reports, Studies, and Journals

ASPE: Comparing Prescription Drugs in the U.S. and Other Countries: Prices and Availability. The reports, which were completed by RAND Health care, compare the cost of prescription drugs, including insulin, in the United States and the cost of drugs in other Organisation for Economic Co-operation and Development (OECD) countries, as well as the availability of new drugs in the US compared with other OECD countries.

ASPE: Medicare Enrollees and the Part D Drug Benefit: Improving Financial Protection through the Low-Income Subsidy. The report examines how the Inflation Reduction Act expanded the financial protection available through the Low-income Subsidy (LIS) program for Medicare beneficiaries enrolled in prescription drug coverage.

Government Accountability Office: National Cyber Director Needs to Take Additional Actions to Implement an Effective Strategy. The report recommends the Office of National Cyber Director develop outcome-oriented measures and estimate the costs of implementation activities to better protect critical infrastructure including health care from cyberattack.

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Contact Information

For additional information concerning this Alert, please contact:

Washington Council Ernst & Young