This week in Washington: Budget reconciliation goes back to the House with changes for vote on Tuesday.


340B: 266 House Legislators Want Fines for Drug Companies

Two hundred sixty-six members of the House of Representatives have told the Department of Health and Human Services that HHS should fine drug companies that deny 340B discounts to hospitals for drugs dispensed by contract pharmacies and to make drug companies pay hospitals back for discounts that were withheld. The letter says it’s the long-held position of the Health Resources and Services Administration that drug companies must provide 340B discounts to hospitals and clinics that qualify, regardless of whether hospitals dispense the drugs themselves. The letter states there are no provisions in the statute that allow manufacturers to set conditions or impede access to 340B discounts.

The letter urges the Health Resources and Services Administration to immediately create and appoint a dispute resolution panel and write guidance or regulation to stop drugmakers from effectively converting up-front discounts into rebates.

Beginning this past summer, some drug companies stopped shipping discounted drugs to pharmacies that 340B hospitals contract to dispense drugs; other drug companies restrict shipments to one contract pharmacy for each hospital.


Senate Passes American Rescue Plan

On March 6, 2021, the Senate passed the American Rescue Plan Act on a 50-49 vote. Sen. Sullivan (R-AK) had to leave for a family emergency. The legislation is a $1.9 trillion pandemic relief package after making changes to provisions related to minimum wage, health insurance, pensions, broadband, student loans and entertainment venues. The House is expected to vote Tuesday on the Senate version.

In order to keep the support of all 50 Democrats needed to advance the package, Senate Majority Leader Charles E. Schumer brokered deals to reduce federal unemployment insurance payments from the $400 included in the House-passed package to $300 per week through Sep. 6. He also agreed to reduce the number of people who would receive direct payments by lowering the phase out for individuals from $100,000 to $80,000 and for joint filers from $200,000 to $160,000. Find more information in McGuireWoods LLP and McGuireWoods Consulting’s latest alert, Senate Passes American Rescue Plan.

Becerra Gets a Tied Vote at Finance Committee

The Senate Finance Committee voted 14-14 along party lines to advance HHS Secretary-nominee Xavier Becerra’s nomination, previewing a likely close vote on the floor as Republicans coalesce in their opposition to the California attorney general and former Democratic member of the House of Representatives.

Chairman Ron Wyden (D-OR) has submitted the notice of a tie vote to the Senate. Next, the majority leader will file a motion to discharge the nomination, with a maximum four hours of debate, equally divided between the parties. If the motion is approved, the nomination can then be placed on the Senate calendar.

While Democrats say Becerra’s experience and unbending support for the Affordable Care Act make him the perfect choice to lead HHS, Republicans oppose the nomination due to Becerra’s pro-choice position on abortion and argue he lacks qualifications for the job.

Public Option Legislation Introduced

On March 2, Sens. Tim Kaine (D-VA) and Michael Bennet (D- CO) introduced updated legislation that would phase in a public option based on the Medicare framework and would be available in the individual and small group exchanges. “The Medicare X Choice Act” would limit enrollment to consumers eligible for Affordable Care Act subsidies, meaning people who have an offer of affordable coverage would not be able to enroll. The bill also fixes the “family glitch” that currently blocks potentially millions of Americans from subsidies.

The updated bill has 11 Democratic cosponsors: Sens. Dick Durbin (IL), Tammy Duckworth (IL), Ben Cardin (MD), Debbie Stabenow (MI), Patrick Leahy (VT), Raphael Warnock (GA), John Hickenlooper (CO), Amy Klobuchar (MN), Tina Smith (MN), Jeanne Shaheen (NH) and Gary Peters (MI).

Under this legislation, a new Medicare-like option would be created and would be required to cover the Affordable Care Act’s essential health benefits. It would first be sold in the individual market states that have only one insurer and later would also be sold in high-cost areas. By 2025, the plan would be available in the small business and individual insurance marketplaces nationwide.

The new bill would expand and enhance the ACA tax credits, eliminate cost sharing for primary care services, and allow plans to reimburse hospitals at 150 percent of Medicare, up from 125 percent in the initial bill. The bill also would require Medicare to negotiate drug prices for the Medicare X option and Part D program.

Bipartisan Legislation Introduced on Rx Drug Prices

On March 3, Sens. Jeanne Shaheen (D-NH), Bill Cassidy (R-LA), Michael Bennet (D-CO) and Marco Rubio (R-FL) reintroduced “The Ensuring Timely Access to Generics Act of 2021,” which would lower drug prices through increasing competition from generic drugs through better oversight of the Food and Drug Administration’s (FDA) citizen petition process.

The citizen petition process allows interested stakeholders, including drug companies, to bring concerns to the FDA’s attention regarding pending applications. The members believe some have discovered how to exploit this process by filing citizen petitions in order to delay the approval of generic competitors and extend their patent protections. This legislation ensures the FDA’s ability to reject citizen petitions if they believe that the primary purpose of the petition is to delay the approval of an application, thereby increasing competition in the marketplace and lowering costs for patients. The bill would also set a time limit to ensure that citizen petitions are submitted in a timely manner after the petitioning party becomes aware of the information upon which their petition is based. This time limit helps avoid instances where brand-name drug manufacturers slow down the FDA review process by filing citizen petitions shortly before a generic drug is set to be reviewed by FDA. The legislation takes the additional step of requiring the Secretary of Health and Human Services (HHS) to establish procedures for referring a petitioner to the Federal Trade Commission (FTC) if they have reason to believe a petition was submitted with the primary purpose of delaying the approval of another application.

Read more on healthcare policy in McGuireWoods Consulting’s Washington Healthcare Update.