Hearings/Markups

House Ways and Means Committee: “Investing in the U.S. Health System by Lowering Drug Prices, Reducing Out-of-Pocket Costs, and Improving Medicare Benefits”
The House Ways and Means Committee held a hearing on prescription drug pricing costs, as well as discussing the government drug price negotiation plan released by House Speaker Nancy Pelosi (D-CA), H.R. 3. The Ways and Means Committee is one of the committees with jurisdiction on the topic, and Chair Richard Neal (D-MA) is a cosponsor of H.R. 3. Find more details on the hearing here. Find the Congressional Budget Office (CBO) report on H.R. 3 here.

House Energy and Commerce Committee: “Markup of H.R. 3, H.R. 4665, H.R. 4671, H.R. 4618, H.R. 4650”
The House Energy and Commerce Committee held a markup of H.R. 3, the Lower Drug Costs Now Act of 2019. The remaining four bills considered offered reforms to the Medicare program. Republican members of the committee noted that regular order has been avoided and that a subcommittee markup was skipped, seemingly “rushing” H.R. 3. The lengthy debate was on H.R. 3, with full Democratic support, while Republican members introduced a handful of amendments in order to display their opposition. These amendments fought back on the international drug-pricing index of H.R. 3, as well as generally calling the negotiation bill a “price-setting” bill. Republican members were also concerned that the remaining four Medicare bills did not have a hearing before a vote—amendments were not made, yet there was an emphasis on the partisan nature of the debate. All offered legislation was favorably reported to the House. Prior to the markup changes were made to HR 3 and offered as a substitute. The most notable changes in the substitute amendment included increasing the number of drugs subject to negotiation and that a drug would remain eligible for price negotiations until there were two generics on the market. Changes were coordinated among the three committees with jurisdiction. Energy and Commerce also made a change related to the 340B program, which is in its jurisdiction.  Find more details on the markup here.

House Education and Labor Committee: “Markup of H.R. 3, Lower Drug Costs Now Act of 2019”

The House Education and Labor Committee held a markup of H.R. 3, the Lower Drug Costs Now Act of 2019. Chairman Bobby Scott (D-VA) offered an amendment in the nature of a substitute, with changes that were coordinated with the Ways and Means, and Energy and Commerce committees’ jurisdiction. The amendment was adopted by voice vote. The committee adopted four other amendments offered by Democrats. Amendments offered by Republicans failed. The adopted amendments would require that the copayment for a drug under participating employer plans not exceed the negotiated price, have a requirement for federal investigators to examine the effects of price negotiation and have the extension of the inflation cap to employer plans. The amendments also ensure data collected under the bill is not duplicative. Find more details on the markup here.

House

Senate

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Congress Returns

Congress returned to Washington this week following a two-week recess and Monday’s federal holiday. Lawmakers are mourning the loss of House Oversight and Reform Committee Chairman Elijah Cummings (D-MD), who passed away this morning. Rep. Carolyn Maloney (D-NY) becomes Acting Committee Chair. Speaker Nancy Pelosi (D-CA) also announced that the House Democratic drug pricing legislation considered this week in three committees of jurisdiction will be named for Cummings.

Joint Hearing on Section 230

On Wednesday, the House Energy and Commerce Subcommittees on Communications and Technology and Consumer Protection and Commerce convened a joint hearing focused on Section 230 of the Communications Decency Act (see below for details). Elsewhere, the New Democrat Coalition, which counts more than 100 House Democrats as members, announced this week that is endorsing H.R. 2013, Rep. Suzan DelBene’s Information Transparency and Personal Data Control Act. The bill directs the Federal Trade Commission (FTC) to establish requirements for companies that collect and otherwise use sensitive personal information, including a requirement that they obtain consumer opt-in consent for usage of such data. Meanwhile, the Senate Judiciary’s tech task force, helmed by Senator Marsha Blackburn (R-TN), convened another closed meeting yesterday for a discussion focused on data privacy.

Digital Service Tax

On Tuesday, the President again vetoed a resolution to terminate the national emergency he declared to send additional resources to the southern border; there was not enough support in Congress to override the veto earlier this year. Trump hosted Italian President Sergio Mattarella at the White House on Wednesday and in a joint press conference, said that the two leaders did not discuss if or how Italy plans to move forward with a digital service tax. The United States argues that such taxes, including the one enacted earlier this year in France, disproportionately impact American technology companies. The President said Wednesday that “if anybody’s going to tax those companies, it should be the U.S.A.,” rather than the European Union or individual nations.

FTC Establishes Technology Enforcement Division

Last Friday, President Trump announced that Acting Secretary of Homeland Security Kevin McAleenan will step down. Federal Trade Commission (FTC) Chairman Joe Simons also said that Bureau of Competition Director Bruce Hoffman will leave the agency in November and that he will appoint Deputy Director Ian Conner to succeed Hoffman. The FTC also announced that effective October 1, its Technology Task Force has become a permanent division in the Bureau of Competition now known as the Technology Enforcement Division.

Remote ID of Drones

The FAA’s Drone Advisory Committee (DAC) meets today as the FAA and industry wait for the White House Office of Management and Budget (OMB) to finish reviewing a notice of proposed rulemaking for remote identification (ID) of drones. At the last DAC meeting, industry was tasked with making recommendations to encourage early equipage of remote ID technology before the rulemaking is complete. Today, the DAC received three new taskings related to facility maps, beyond visual line of sight (BVLOS) flight challenges, and unmanned traffic management (UTM).

Read more in McGuireWoods Consulting’s Emerging Technologies Washington Update.

House

Blue Dog Democrats Urge Speaker Pelosi to Call Vote on Several Bipartisan Drug-pricing Bills
On Oct. 7, the Blue Dog Coalition asked House Speaker Nancy Pelosi to hold votes on several bipartisan drug-pricing bills, instead of wrapping them into government price negotiation legislation, the same request Republicans are making to the speaker. The Blue Dog Coalition also clarified that they want all the bills to be taken up separately from the drug-pricing bill that includes Pelosi’s drug-pricing plan, H.R. 3.

The Blue Dog Coalition wants the House to take up the following bills:

  • H.R. 965, the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act of 2019
  • H.R. 1499, the Protecting Consumer Access to Generic Drugs Act of 2019
  • H.R. 2115, the Public Disclosure of Drug Discounts Act
  • H.R. 1520, the Purple Book Continuity Act of 2019
  • H.R. 1503, the Orange Book Transparency Act of 2019
  • H.R. 1781, the Payment Commission Data Act of 2019
  • H.R. 938, the Bringing Low-cost Options and Competition while Keeping Incentives for New Generics (BLOCKING) Act of 2019

For more information about these bills here.

Administration

CMS Rejects GAO’s Advice to Supervise Costs of Medicaid Work Requirements
On Oct. 10, the Government Accountability Office (GAO) announced that the Centers for Medicare and Medicaid Services (CMS) rejected the GAO’s recommendation to consider the administrative costs of Medicaid work requirement programs when looking at whether 1115 waivers are budget neutral. The GAO report found that work requirements can increase Medicaid administrative costs as states that adopt the policy update their eligibility and enrollment systems, educate beneficiaries, train staff and develop ways to monitor compliance.

CMS: Increasing Transparency on Abuse and Neglect for Nursing Home Patients, Residents, Families and Caregivers

On Oct. 7, the Centers for Medicare and Medicaid Services (CMS) announced the enhancement of the information available to nursing home residents, families and caregivers on CMS’s Nursing Home Compare website. The site will display a consumer alert icon next to nursing homes that have been cited for incidents of abuse, neglect or exploitation. This move is part of CMS’s five-part approach to ensuring safety and quality in nursing homes, which Administrator Seema Verma announced in April 2019. The new alert icon will be launched on Oct. 23, 2019. Find more information here.

Read more on healthcare policy on the McGuireWoods Consulting website.

NDAA, FY20 Government Spending

When lawmakers return to Washington next week, National Defense Authorization Act (NDAA) conferees will aim to bring a final package up for floor votes in each chamber by mid-October. Facing a November 21 deadline, Congressional leaders and the White House will also resume discussions around FY20 government spending.

Communications Decency Act – Section 230

Two House Energy and Commerce subcommittees will hold a joint hearing next Wednesday on Section 230 of the Communications Decency Act. With the Satellite Television Extension and Localism Act (STELAR) set to expire at the end of the year, the Senate Commerce, Science, and Transportation Committee is planning a hearing later this month on the satellite law. To date, reauthorization legislation has not been introduced in either chamber.

Read more in McGuireWoods Consulting’s Emerging Technologies Washington Update.

Recess

The House and Senate were in recess again this week; lawmakers will return to Washington next week following the Columbus Day holiday. On Tuesday, President Trump awarded the Medal of Freedom to former Attorney General Edwin Meese.

Rep. Lowey Not Seeking Reelection, Rep. Thornberry Retiring

House Appropriations Committee Chairwoman Nita Lowey (D-NY) announced today that she will not seek reelection in 2020. Last week, House Armed Services Committee Ranking Member Mac Thornberry (R-TX) also announced that he will retire at the end of this Congress.

Updates from Europe

Meanwhile, in Europe, Commissioner for Competition Margrethe Vestager appeared before a joint meeting of four European Parliament Committees in Brussels in support of her appointment to also serve as the European Commission’s Executive Vice President for Digital.

California Consumer Privacy Act

California Attorney General Xavier Becerra also released proposed regulations this afternoon to implement the landmark California Consumer Privacy Act (CCPA), which goes into effect on January 1, 2020. The Office of the Attorney General will hold four public hearings on the proposed regulations and accept comments until December 6.

Read more in McGuireWoods Consulting’s Emerging Technologies Washington Update.

House

Bipartisan Legislation Introduced on Accurate Provider Directories
On Sept. 27, Reps. Phil Roe (R-TN) and Kim Schrier (D-WA) introduced legislation to improve the accuracy of the information listed on health plans’ provider directories to prevent patients from receiving surprise out-of-network bills. The Improving Provider Directories Act (H.R. 4575) requires health plans to establish a process to address inaccurate information listed in publicly accessible provider directories. Monitor H.R. 4575 here.

Ways & Means Chair’s Surprise Billing Plan Directs Price Negotiations to HHS, Labor and Treasury
On Sept. 27, House Ways & Means Committee Chairman Richard Neal (D-MA) proposed a surprise billing plan in a letter to Ranking Member Kevin Brady (R-TX) that gives responsibility for negotiated rulemaking to the Department of Health and Human Services (HHS), Department of Labor and the Department of Treasury. The agencies would set out-of-network payment rates and determine when to use arbitration. Then respective secretaries would propose a rule and ask for public comment. Rep. Neal said that the legislation would be worked on during the current two-week recess.

Senate

Grassley Warns Senate Finance Drug Pricing Package Could Face Delay Until 2020
On Sept. 27, Senate Finance Chair Chuck Grassley (R-IA) said there is a possibility that the drug pricing package introduced by Finance Ranking Member Ron Wyden (D-OR), S. 2543, the Prescription Drug Pricing Reduction Act of 2019, could be delayed from being considered on the Senate floor until next year. Without a vote on S. 2543 this year, the bill cannot be attached to the end-of-year appropriations bill. Find more details on S. 2543 here.

Read more on healthcare policy on McGuireWoods Consulting’s website.

Hearings/Markups

Senate Special Committee on Aging: “Promoting Healthy Aging – Living Your Best Life Long into Your Golden Years”
The Senate Special Committee on Aging held a hearing for seniors seeking to maintain a healthy lifestyle as they age. Find the hearing transcript here.

House Energy and Commerce Committee, Subcommittee on Health: “Making Prescription Drugs More Affordable: Legislation to Negotiate a Better Deal for Americans”
The Subcommittee on Health of the Committee on Energy and Commerce held a legislative hearing to discuss Speaker Nancy Pelosi’s (D-CA) new drug pricing bill (H.R. 3), which gives the Department of Health and Human Services (HHS) authority to negotiate drug prices that apply to all payers, including the commercial market. The hearing also discussed several different proposals that would permit government negotiation of drug prices.

  • H.R. 3, the “Lower Drug Costs Now Act of 2019”
  • H.R. 275, the “Medicare Prescription Drug Price Negotiation Act of 2019”
  • H.R. 448, the “Medicare Drug Price Negotiation Act”
  • H.R. 1046, the “Medicare Negotiation and Competitive Licensing Act of 2019”

Find more information for this hearing here.

Why this is important: Progressive Democrats have said Speaker Pelosi’s proposed plan (H.R. 3) does not go far enough, but Democratic members did not act divided in their support of the bill during the hearing. Instead, Republican members emphasized the partisan nature of the bill, raising concerns that bipartisan gains made recently through work in the subcommittee have been lost with this new proposal. Republican members emphasized that they were left out of writing the bill.

House Energy and Commerce Committee, Subcommittee on Oversight and Investigations: “Sounding the Alarm: The Public Health Threats of E-Cigarettes”
Energy and Commerce Chairman Frank Pallone, Jr. (D-NJ) and Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO) announced that the Oversight and Investigations Subcommittee held a hearing on Wednesday, Sept. 25, on the public health impacts and regulatory authorities related to e-cigarette manufacturing, sales and use. Testimony was provided by the Centers for Disease Control and Prevention (CDC), the Food and Drug Administration (FDA) and state health officials. Find the hearing and corresponding materials here.

Why this is important: As of Sept. 19, 2019, 530 cases of lung illness associated with the use of e-cigarette products have been reported in 38 states and one U.S. territory. As of the same date, seven deaths related to this illness have been confirmed in California, Illinois, Indiana, Kansas, Minnesota and Oregon. Members are concerned, and gained insight from the witness panel on how to proceed after the FDA finalizes a compliance policy to prioritize the premarket authorization requirements to clear the market of unauthorized non-tobacco-flavored e-cigarettes, including mint and menthol e-cigarettes.

House Committee on Education and Labor: Health, Employment, Labor and Pensions (HELP) Subcommittee: “Making Health Care More Affordable: Lowering Drug Prices and Increasing Transparency”
The House Committee on Education and Labor, HELP subcommittee held a hearing on the drug-pricing plan released by House Speaker Nancy Pelosi (D-CA) last week. H.R. 3, the Lower Drug Costs Now Act of 2019, allows the secretary of the Department of Health and Human Services (HHS) to negotiate drug prices and creates fines for drug manufacturers that do not follow these negotiated prices. Find the hearing and corresponding materials here.

Why this is important: Republican members are concerned that because Republicans were left out of the crafting of the legislation, the plan is partisan and will stifle the market and innovation. Republicans feel any progress toward a bipartisan proposal has been tarnished. Some witnesses and Republican members viewed the negotiation proposal as price controls on prescription drugs. Republican members debated whether drug-pricing negotiations will deter innovation, while Democratic members argued that the NIH could carry the weight of innovative research. The hearing ended with no shared consensus between parties.

House

Senate

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On Sep. 26, McGuireWoods Consulting senior advisor and McGuireWoods LLP partner Gregory S. Walden testified before the House Transportation and Infrastructure Subcommittee on Aviation on behalf of the Small UAV Coalition, to which he serves as Aviation Counsel. Walden, a former Federal Aviation Administration (FAA) Chief Counsel, was invited to testify on the drone subtitle of the FAA Reauthorization Act of 2018 during a Subcommittee hearing on the bill’s implementation.

“Together, Coalition member companies represent the innovative, cutting-edge technological leadership that in just a few short years, is poised to enable routine safe, secure, UAS integration. With your continued support, we are well on our way to securing a regulatory framework for commercial UAS operations that will not only capture, but exceed, our expectations and deliver untold economic and consumer benefits,” Walden told the Subcommittee. In addition to fielding questions from lawmakers about the status of the many drone-related mandates in the 2018 law, he also spoke to the importance of the pending FAA notice of proposed rulemaking (NPRM) for remote identification of drones, which is currently under review at the White House Office of Information and Regulatory Affairs (OIRA). His complete testimony is available here.

Walden is a member of the McGuireWoods Consulting Emerging Technologies practice group. In addition to serving as FAA Chief Counsel from 1988-1990, he has been both practicing aviation law and teaching at George Mason University Law School for the last 20 years.

Continuing Resolution, FY20 Spending Bills

With government spending authority set to expire next Monday and Congress scheduled to begin a two week recess after wrapping its work this week, the Senate today voted 82-15 to pass a House-passed continuing resolution (CR) to extend funding through November 21. The White House has indicated that the President will sign the bill in time to avert a shutdown. Meanwhile, the Senate Appropriations Committee advanced several more of its FY20 government spending bills today, namely its Commerce-Justice-Science, Homeland Security, Interior-Environment, State-Foreign Operations, and Legislative Branch measures. Committee Chairman Richard Shelby (R-AL) is scheduled to meet with the President today to discuss FY20 spending.

Executive Branch Nominations Confirmed

Elsewhere, the Senate confirmed several pending executive branch nominations, including Eugene Scalia’s nomination to serve as Secretary of Labor after the Senate Health, Education, Labor, and Pensions Committee advanced his nomination on Tuesday . It also approved several motions to instruct conferees on the National Defense Authorization Act, though formal conference negotiations began late and are expected to continue into mid-October, after the upcoming two-week recess.

Senate Votes to Terminate Emergency Declaration at Southern Border

On Wednesday, the Senate voted 54-41 to terminate the emergency declaration under which the President has shifted $3.6 billion from 127 military construction projects in 23 states to build a border wall. 11 Republicans supported the resolution. The President vetoed the measure in March, but there was not enough support in Congress to override the veto.

Enhancing Entrepreneurship for the 21st Century Act

On Tuesday, Senators Amy Klobuchar (D-MN) and Tim Scott (R-SC), who co-chair the Senate Entrepreneurship Caucus, introduced the Enhancing Entrepreneurship for the 21st Century Act, which would require the Department of Commerce to study what is driving the so-called “startup slump.” Klobuchar and Scott co-founded the Caucus earlier this year.

SAFE Banking Act

On the other side of the Capitol, the House moved a number of non-controversial bills under suspension of the rules this week, including the SAFE Banking Act, which would ensure that financial institutions are not held liable under federal law for providing services to legal marijuana-related businesses. The bill passed 321-103.

UN General Assembly

President Trump began the week attending meetings and events around the UN General Assembly in New York, where he delivered keynote remarks at the Global Call to Protect Religious Freedom event and held bilateral meetings with world leaders including Pakistani President Arif Alvi, New Zealand Prime Minister Jacinda Ardern, Egyptian President Abdel Fattah, and Ukrainian President Volodymyr Zelensky, among others.

Read more in McGuireWoods Consulting’s Emerging Technologies Washington Update.

Hearings/Markups

House Committee on Rules: Meeting on continuing appropriations for fiscal year 2020
The House Committee on Rules held a meeting to discuss H.R. 4378, Continuing Appropriations Act 2020 and Health Extenders Act of 2019. They agreed upon a rule for consideration of the Continuing Resolution. The CR passed the House on Sept. 18 by a vote of 301-123.  Find more information on the meeting here.

House Energy and Commerce Subcommittee on Consumer Protection and Commerce: “Profits over Consumers: Exposing How Pharmaceutical Companies Game the System”
The House Energy and Commerce Consumer Protection and Commerce Subcommittee held a hearing on product hopping in the pharmaceutical market. Find information for this hearing here.

Why this is important: Members used the hearing to highlight concerns over product hopping, also known as line extension and sometimes referred to as evergreening, referring to the reformulation of a pharmaceutical drug product by a brand drug manufacturer for the purpose of delaying competition. Chairman Frank Pallone (D-NJ) emphasized that profit made from drug sales is concentrated around only a few drugs with no competition; in 2017, only 10 percent of drugs were responsible for 72 percent of consumer spending on drugs.

House

House Passes Continuing Resolution to Fund Government Through Nov. 21, Include Health Extenders
On Sept. 18, the House passed a short-term continuing resolution (CR), H.R. 4378, to fund the government through Nov. 21, with a 301-123 vote. The Senate is expected to take up the CR this week. A package of health extenders was added to the CR. The CR funds community health centers and Medicaid in Puerto Rico and other territories at current levels. The CR delays a $4 billion reduction in Medicaid disproportionate share hospital (DSH) payments through Nov. 21. The CR includes a provision that was recommended from the Medicaid and CHIP Payment and Access Commission. That provision would exclude a manufacturer’s authorized generic drug price from the average manufacturer price of its brand product. The bill also would remove manufacturers from the definition of wholesaler in the Medicaid drug rebate program. The CR includes a short-term delay of the Medicaid DSH cuts. Follow more on H.R. 4378 here.

Education & Labor Committee Surprise Billing Markup Delayed by Payment Disputes, ERISA
On Sept. 18, the House Education & Labor Committee Chairman Bobby Scott (D-VA) said that his committee is sorting out technical issues to ensure its surprise billing fix applies to the Employee Retirement Income Security Act of 1974 (ERISA), as well as all other forms of health coverage, and that the committee is still debating on whether to use a benchmark payment rate or arbitration as the policy fix. Rep. Scott expects to introduce and mark up surprise billing legislation either immediately before or after the October recess.

Speaker Pelosi Introduces Drug Pricing Bill
On Sept. 19, House Speaker Nancy Pelosi (D-CA) released a drug-pricing bill that gives the Department of Health and Human Services (HHS) negotiation power over drug prices that apply to all payers, including the commercial market. The released bill directs HHS to negotiate prices on drugs without generic or biosimilar competition, while the earlier draft had price negotiation on drugs with less than two competing generics or biosimilars. The plan applies to drugs that meet two conditions—they are among the 250 most costly drugs to Medicare and the U.S. health system, and they face no competition. HHS would have to negotiate a minimum of 25 drugs annually. The maximum negotiated price would be set with an international price index, called the “Average International Market” price. The index would set a maximum price at 120 percent of the average of prices in six countries: Australia, Canada, France, Germany, Japan and the United Kingdom. If companies do not participate in the negotiation process or bargaining fails, drug makers would have to pay a fee of 65 percent of gross sales of the drug, which would increase by 10 percent with each quarter of noncompliance, to a maximum of 95 percent. The House Energy & Commerce Health subcommittee plans to hold a hearing on the drug pricing legislation on Sept. 25.

Senate

Appropriations Committee Favorably Reports $80 Million Increase for FDA to Senate Floor
On Sept. 19, the Senate Appropriations Committee favorably reported a bill to the Senate floor that gives the Food and Drug Administration (FDA) an $80 million funding boost in fiscal 2020, with investments in the FDA’s medical countermeasures initiatives, pathogen reduction efforts, compounding oversight, food safety and outbreak prevention, cannabidiol activities and infrastructure maintenance.

Read more on healthcare policy on the McGuireWoods Consulting website.