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Congressional:
House Oversight & Accountability Committee Holds Hearing on PBMs; Chairman Comer Releases PBM Report
On Tuesday, the House Oversight and Accountability Committee held a hearing on the “anticompetitive practices” employed by pharmacy benefit managers (PBMs). The witnesses included the executives from the three biggest PBMs, CVS Caremark, OptumRx, and Express Scripts. Committee members on both sides of the aisle expressed frustration with how PBMs operate and the witnesses' responses to their questions. Members brought up several issues with PBMs, including steering patients into pharmacies the PBM parent company owns, Direct and Indirect Remuneration (DIR) fees, vertical integration and market competition, group purchasing organizations (GPOs), and the closure of independent pharmacies. The three witnesses defended PBMs and the benefits PBMs provide their customers and the overall health system by negotiating patient drug costs. Witnesses pointed out that pharmaceutical companies set list prices of drugs, not PBMs, and that drug companies engage in abusive patent practices that result in high drug costs and reduced access for patients. Read Mehlman’s hearing summary here.
Prior to the hearing, House Committee on Oversight and Accountability Chairman James Comer (R-KY) issued a report outlining how the three largest Pharmacy Benefit Managers (PBMs) —CVS Caremark, Express Scripts, and OptumRx—have “monopolized the pharmaceutical marketplace by deploying deliberate, anticompetitive pricing tactics that are raising prescription drug prices, undermining community pharmacies, and harming patients across the United States.” Read the press release here and report here.
House Energy & Commerce Committee Holds Hearing on CDC Priorities
On Tuesday, the House Energy and Commerce Committee held a hearing on restoring public trust in the Centers for Disease Control and Prevention (CDC). Six top CDC officials testified. During the hearing, Republicans praised the work of the CDC National Center for Injury Prevention and Control but questioned the need for more federal funding and stated that the CDC is straying from its core mission of keeping the public healthy. Republican members also expressed concerns that the CDC is spending too much time on programs the lawmakers deemed unnecessary or duplicative, such as the CDC’s research on climate change and racism’s impact on public health. Democrats widely supported the CDC and noted the consequences of underfunding public health programs. The CDC officials testifying emphasized three areas of focus: improving readiness and response to diseases, improving mental health, and supporting young families. The officials also argued that the cuts to the agency would eliminate critical CDC programs and harm public health. Read Mehlman’s hearing summary here.
Senate HELP Committee Votes to Subpoena CEO of Steward Health Care
On Thursday, the Senate Health, Education, Labor, and Pensions Committee held an executive session to vote on authorizing an investigation into Steward Health Care's bankruptcy and subpoenaing Steward Health Care CEO Ralph de la Torre to testify at a hearing. The committee authorized the investigation by a 20-1 vote and the subpoena by a 16-4 vote. The hearing titled “Examining the Bankruptcy of Steward Health Care: How Management Decisions Have Impacted Patient Care” will be held on September 12 at 10:00 AM.
House Cancels HHS and FDA Spending Bills Votes to After August Recess
On Wednesday, House Republican leadership announced they are canceling votes next week and leaving for August recess early as they face an uphill battle on passing the remaining fiscal 2025 appropriations bills, including the Labor-HHS and Agriculture funding bills. On Monday, The Biden administration said it would veto the FDA funding bill in its current form. The Office of Management and Budget (OMB) stated the administration is concerned with the bill’s provisions that limit the FDA’s ability to regulate tobacco products until the agency takes stronger enforcement actions related to illicit e-cigarettes and the legislation’s funding levels for the agency.
Joint Economic Committee Democrats Release Report on Private Equity Practices in Health Care System and Economy
On Wednesday, the Joint Economic Committee Democrats released a new report on private equity practices in the health care system and economy. The report highlights how states like New Mexico, Idaho, and Wyoming have seen a large portion of their hospitals bought by private equity firms in recent years and how some have seen declines in patient outcomes. Read the report here.
Study Commissioned by Sen Warren Finds That Biden's Controversial Nursing Home Staffing Rule Could Save Thousands of Lives
On Monday, Senator Elizabeth Warren (D-MA) released a new analysis conducted by researchers at the University of Pennsylvania. The analysis reported that President Biden’s rule setting minimum staffing standards in nursing homes across the U.S. would save approximately 13,000 lives per year. In June, Senator Warren sent a private letter to researchers at the Leonard Davis Institute of Health Economics at the University of Pennsylvania, requesting an analysis of these requirements on patient outcomes, including mortality rates, in nursing homes. In March, the House Ways and Means Committee advanced a bill (H.R. 7513), which would block the administration from implementing any minimum staffing requirements in nursing homes. Read the press release here, and report here.
Notable Bills Introduced:
Wyden, Senators Propose Criminal Penalties, Consumer Protections to Stop Rogue Health Insurance Brokers
On Wednesday, Senate Finance Committee Chair Ron Wyden (D-OR) and five senators introduced a bill to apply criminal penalties to insurance brokers who change Americans’ Affordable Care Act (ACA) marketplace plans without their knowledge or consent and take other steps to strengthen consumer health insurance protections. The Insurance Fraud Accountability Act would hold fraudulent insurance brokers and marketers criminally responsible for profiting off deceptive marketing schemes in healthcare insurance plans. Read the press release here, the bill summary here, and the bill text here.
Sens. Tillis, Kelly Introduce Bipartisan Legislation to Increase Access to Plasma-Based Medicines
On Wednesday, Senators Thom Tillis (R-NC) and Mark Kelly (D-AZ) introduced the bipartisan Preserving Life-saving Access to Specialty Medicines in America (PLASMA) Act, legislation to ensure individuals with rare diseases and immunodeficiencies have access to necessary plasma-based medicines. The PLASMA Act would include plasma-derived medicines in a phase-in process for the Part D redesign the Inflation Reduction Act already has in place for other drugs Congress recognized as unique. Beginning in 2031, manufacturers would pay the full rebate amount following annual rebate increases. Read the press release here and the bill here.
Reps. Auchincloss, Harshbarger Introduce Bipartisan Pharmacists Fight Back Act
On Wednesday, Reps. Jake Auchincloss (D-MA) and Diana Harshbarger (R-TN) introduced the Pharmacists Fight Back Act to address the practices of Pharmacy Benefit Managers (PBMs). The bill implements a transparent pharmacy reimbursement model using market-based pricing benchmarked to the national average drug acquisition cost (NADAC). It also removes the ability of PBMs to restrict patient choice via network exclusions and protects community pharmacists by prohibiting PBMs from steering patients to PBM-affiliated pharmacies. Read the press release here and the bill here.
Sen. King Leads Introduction of Bipartisan Bill to Improve Cybersecurity in Health Care
On Monday, Senator Angus King (I-ME), co-chair of the Cyberspace Solarium Commission, introduced a bipartisan bill to improve cybersecurity in health care. The Healthcare Cybersecurity Act would direct the Cybersecurity and Infrastructure Security Agency (CISA) and the Department of Health and Human Services (HHS) to collaborate on improving cybersecurity and make resources available to non-federal entities relating to cyber threat indicators and appropriate defense measures. It would also create a special liaison to HHS within CISA, who would coordinate during cybersecurity incidents. The legislation is cosponsored by Senators Jacky Rosen (D-NV) and Todd Young (R-IN). Read the press release here and the bill here.
Sens. Casey, Kaine Introduce Bill to Strengthen Advocacy for Long-Term Care Residents
On Tuesday, Senators Bob Casey (D-PA), Chairman of the U.S. Senate Special Committee on Aging, and Tim Kaine (D-VA) introduced the Strengthening Advocacy for Long-Term Care Residents Act to improve the Long-Term Care Ombudsman program, which was established under the Older Americans Act. The Strengthening Advocacy for Long-Term Care Residents Act would improve the Long-Term Care Ombudsman program by instructing the Administration for Community Living (ACL) to establish categories of duties for volunteers and appropriate training requirements for volunteers based on those categories. Read the press release here and the bill summary here.
Sen. Blumenthal & Rep. Wild Introduce Bipartisan, Bicameral Legislation to Strengthen Research & Treatment Development for Brain Cancers
On Tuesday, Sen. Richard Blumenthal (D-CT) and Rep. Susan Wild (D-PA) introduced the Bolstering Research and Innovation Now (BRAIN) Act, bipartisan legislation to strengthen research and treatment development for brain tumors and to improve the accessibility of brain tumor health care. Senators John Barrasso (R-WY), Jack Reed (D-RI), and Mike Rounds (R-SD) and Representatives Brian Fitzpatrick (R-PA), Lori Trahan (D-MA), and John Joyce (R-PA) joined Rep. Wild and Sen. Blumenthal in introducing the bicameral legislation. The bill would increase the transparency of federally funded biobank collections and fund the National Cancer Institute’s Glioblastoma Therapeutics Network. Read the press release here and the bill here.
Executive Branch:
HHS Reorganizes Technology, Cybersecurity, Data, and Artificial Intelligence Strategy and Policy Functions
On Thursday, the Department of Health and Human Services (HHS) announced a reorganization to streamline and bolster technology, cybersecurity, data, and artificial intelligence (AI) strategy and policy functions. While the office will continue as a staff division within HHS, ASTP/ONC will have increased responsibilities to support this broader mission, reflecting the new staff and funding transitioning into the division. ASTP/ONC will establish an Office of the Chief Technology Officer and reinstitute the role of Chief Technology Officer, which will oversee department-level and cross-agency technology, data, and AI strategy and policy, including the Office of the Chief AI Officer, Office of the Chief Data Officer, and a new Office of Digital Services. Read the press release here.
HHS Moves to Stop Agent, Broker Abuses in Marketplace Coverage
Late last week, the Centers for Medicare & Medicaid Services (CMS) released a new directive, taking additional action to address increases in unauthorized changes in consumers’ enrollments by agents and brokers. Starting on July 19, 2024, CMS will block an agent or broker from making changes to a consumer’s FFM enrollment unless the agent is already associated with the consumer’s enrollment. Unassociated or “new” agents and brokers will be required to conduct a three-way call with the consumer and the Marketplace Call Center or to direct the consumer to submit the change themselves through HealthCare.gov or via an approved Classic Direct Enrollment or Enhanced Direct Enrollment partner website with a consumer pathway. Read the press release here.
Legal & Other:
Disputed Medicare Hospital Pay Rule Vacated by Appeals Court
On Tuesday, the US Court of Appeals for the District of Columbia tossed a 2019 HHS rule for unlawfully altering Medicare hospital reimbursements, saying the agency exceeded its authority in finalizing the measure. The memorandum opinion of the US Court of Appeals for the District of Columbia partly affirmed and partly reversed a 2022 decision by the US District Court for the District of Columbia. That ruling held that the HHS inappropriately deviated from a congressionally authorized Medicare hospital reimbursement formula, but it only required the HHS to recalculate the reimbursements and not vacate the rule. The opinion directs the district court to determine the interest owed to the 24 plaintiff hospitals that challenged the rule. Read the memorandum opinion here.
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