This Week in Washington: FDA funding bill passes House Appropriations Committee, MedPAC and MacPAC release June 2023 report to Congress, RSC budget blueprint brings back premium support concept for Medicare



RSC Releases FY2024 Budget Blueprint

On June 14, the Republican Study Committee (RSC) released its proposed budget plan for fiscal year (FY) 2024. The plan proposes to raise the age at which retirees can claim full Social Security benefits from 67 to 69, for individuals who turn 62 in 2033. It also calls for the adoption of a premium support concept for Medicare. The premium support concept is an approach to reforming Medicare that seeks to reduce growth in Medicare spending by increasing competition among health plans and providing a stronger incentive for beneficiaries to be cost conscious and incentivize beneficiaries to choose private health plans. These plans would run alongside traditional Medicare. Premium support was championed by Rep. Paul Ryan (R-WI) when he was in Republican leadership and by former President Trump. It was widely criticized by Democrats.

In addition, the plan would:

  • Cut total spending by $16.3 trillion over the next 10 years;
  • Increase defense spending to $969 billion by FY 2033;
  • Decrease nondefense spending to $522 billion in FY 2024 and increase it to $553 billion by FY 2033;
  • Implement $5.1 trillion in tax cuts over the next 10 years; and
  • Eliminate funding for the Community Development Block Grant, National Endowment for the Arts and Corporation for Public Broadcasting programs.

For more information, click here.

House Appropriations Committee Marks Up FDA Funding Bill

On June 14, the House Appropriations Committee marked up and reported out of committee the fiscal year (FY) 2024 funding bill for the Food and Drug Administration (FDA). The bill would allocate $6.6 billion to the FDA in FY 2024, approximately $7.2 billion less than what the president had requested in his budget. Committee members were divided over riders and provisions that are included in the bill.

One provision would narrow prescribing requirements for the abortion pill mifepristone and prohibit the pill from being mailed to patients. Another would prevent the Department of Health and Human Services (HHS) from banning menthol cigarettes and prohibit the department from limiting the nicotine content of cigarettes. During the markup, Democratic committee members introduced two amendments to the bill but both failed.

For more information, click here.

House Energy and Commerce Committee Chairman and Senate Finance Committee Ranking Member Request Information on Drug Shortages

On June 12, House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Senate Finance Committee Ranking Member Mike Crapo (R-ID) issued a request for information (RFI) on the rise of drug shortages throughout the country.

The RFI is directed at prescription drug supply chain stakeholders. The RFI contains a series of questions that the Chair and Ranking Member would like answered to understand why the shortages are occurring and what can be done to resolve them. Both the House Energy and Commerce and Senate Finance Committees have been working on legislation related to strengthening drug supply chains and increasing patient access to prescription drugs. Responses for the RFI are due by July 7, 2023.

For more information, click here.


Patients Before Middlemen Act Introduced

On June 14, Senate Finance Committee Chairman Ron Wyden (D-OR), Ranking Member Mike Crapo (R-ID) and Sens. Menendez (D-NJ), Blackburn (R-TN), Tester (D-MT) and Marshall (R-KS) introduced the Patients Before Middlemen (PBM) Act. The legislation would:

  • Prohibit pharmacy benefit managers (PBMs) from receiving compensation based on the price of a prescription drug when entering into a contract with a Medicare Part D plan. PBM service fees will not be linked to the price of a drug, discounts, rebates or other fees; and
  • Implement an enforcement measure that would require PBMs to pay the Secretary any amount that exceeds the designated service fees.

In April, the Chair and Ranking Member of the Senate Finance Committee released a legislative framework to address PBMs and issues with the prescription drug supply chain. It seeks to reduce prescription drug costs for patients and taxpayers by modernizing and reforming federal prescription drug programs. In 2021, the Senate Finance Committee released a report that concluded insulin manufacturers were raising prices to maintain formulary placements with PBMs.

For more information, click here.

No Free TRIPS Act Introduced

On June 15, Sens. Blackburn (R-TN), Lummis (R-WY) and Tuberville (R-AL) introduced the No Free Trade-Related Aspects of Intellectual Property (TRIPS) Act. The legislation would prohibit the president from negotiating or affirming any suspension, modification or withdrawal to the World Trade Organization (WTO) TRIPS agreement without the authorization of Congress. It seeks to protect the intellectual property (IP) of U.S. biopharmaceutical manufacturers and encourages American innovation and domestic investment.

For more information, click here.

Senate HELP Committee Chairman Releases Report on Prescription Drug Prices

On June 12, Senate Health, Education, Labor and Pensions (HELP) Committee Chairman Bernie Sanders (I-VT) released a majority staff report that examines the cost of certain prescription drugs that were developed with support of federal government agencies such as the Department of Health and Human Services (HHS), the Department of Defense (DoD) and the Department of Veterans’ Affairs (VA).

The report highlights the market prices for prescription drugs in the U.S. and other countries and analyzes why the prices for the same drugs are higher in the U.S. than overseas. It also calls on a “reasonable pricing clause” to be implemented for all biomedical products developed with support of the federal government.

For more information, click here.

MedPAC Releases Report to Congress and Announces Leadership Change

On June 15, the Medicare Payment Advisory Committee (MedPAC) released its June 2023 report to Congress. Some of the recommendations in the report are:

  • Congress should require the U.S. Department of Health and Human Services (HHS) secretary to cap the Medicare payment rate for Part B drugs and biologics that are approved under the accelerated approval program, under certain circumstances;
  • Congress should give the HHS secretary the authority to establish a single average sales price-based payment rate for drugs and biologics with similar health effects;
  • Congress should require the secretary to reduce add-on payments for costly Part B drugs and biologics paid based on average sales prices to minimize the relationship between average sales prices and add-on payments, and eliminate add-on payments for Part B drugs and biologics paid based on wholesale acquisition cost;
  • Congress should repeal the existing Medicare wage index statutes, including current exceptions, and require the secretary to phase in new Medicare wage index systems for hospitals and other types of providers, based on provider type and metropolitan or rural areas, while smoothing wage index; and
  • Congress should align fee-for-service payment rates across ambulatory settings. MedPAC cited recent growth in hospital acquisition of physician practices as a specific reason for the recommendation.

In addition, MedPAC announced that Executive Director James E. Mathews, Ph.D., will be departing the commission at the end of August. Dr. Mathews has been leading the commission since November 2017. MedPAC Chairman Michael Chernew, Ph.D., announced that he will be replaced by Paul Masi. Masi is the current unit chief of the health systems and Medicare cost estimates unit at the Congressional Budget Office (CBO) and has 15 years of health policy experience. He previously served as MedPAC’s Assistant Director from 2017 to 2019.

For more information concerning the June report, click here.

MacPAC Releases June 2023 Report to Congress

On June 15, the Medicaid and Children’s Health Insurance Program (CHIP) Payment and Access Commission (MacPAC) released its June 2023 report to Congress. MacPAC focused on federal medical assistance percentage (FMAP) and the metric set each year by the federal government that inversely dictates the maximum state governments can direct to fund DSH funding. The commission made four recommendations, some of which detach total DSH funding from changes in FMAP and streamline the process that the Centers for Medicare and Medicaid Services (CMS) follows to finalize annual DSH allotments. Other recommendations relate to integrating care for dually eligible beneficiaries, improving access to Medicaid coverage for adults leaving incarceration, and identifying Medicaid home and community-based (HCBS) services.

For more information, click here.

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