Recess Wrap-Up & Subpoenas

The House and Senate are wrapping up a two week recess. As they prepare to return to Washington next week, House Judiciary Committee Chairman Nadler (D-NY) has subpoenaed the Department of Justice to release the unredacted Mueller report. He also subpoenaed former White House Counsel Don McGahn this week to testify publicly on May 27 and provide documents related to the report.

Sanctions

On Monday, the White House announced that the government will not reissue exemptions to sanctions for several countries that import oil from Iran when the waivers expire on May 2, an “action intended to bring Iran’s oil exports to zero and deny the regime its principal source of revenue.”

President Meets with Twitter CEO

The President met with Twitter CEO Jack Dorsey on Tuesday in the Oval Office to discuss alleged anti-conservative bias on the social media platform. Coinciding with National Prescription Drug Take Back Day, they also discussed the role tech companies play in illegal online opioid sales amid calls from some lawmakers to further amend Section 230 of the Communications Decency Act to roll back liability protections for online platforms when it comes to those types of sales.

FAA Issues Air Carrier Certificate to Wing Aviation

On Tuesday, Secretary of Transportation Elaine Chao announced that the Federal Aviation Administration (FAA) issued an air carrier certificate to Wing Aviation, the first such certificate awarded for drone delivery operations. The FAA Reauthorization Act of 2018 directs the FAA to update its rules to authorize drone deliveries, but in the meantime, drone operators seeking to deliver goods for compensation or hire must go through the same certification process as manned charter aircraft operators, including obtaining exemption authority from some operational requirements and obtaining an airworthiness certificate for the unmanned aircraft. The Secretary also announced this week that the FAA’s commercial space office will be reorganized as the agency prepares to implement a new proposed rule to overhaul the launch and reentry licensing process (find more information on the proposed rule here).

Other Happenings in Tech & Privacy

Gail Slater, a senior adviser to the President on technology, telecommunications, and cybersecurity policy, will leave the White House to join Fox Corporation in Washington, the company announced on Wednesday.

In California, the Assembly Privacy and Consumer Protection Committee held a hearing on Tuesday on a number of bills to amend the California Privacy and Consumer Protection Act (CCPA). A bill offered by Assemblymember Wicks that carried several provisions championed by privacy advocates was pulled from the agenda.

Hearings/Markups

House Judiciary Committee: “TBA Markup on CREATES Act, Pay-for-Delay Legislation”
The House Judiciary Committee is planning a markup on the CREATES Act and pay-for-delay legislation. The date of the markup is to be announced. Last month, Judiciary Committee Chair Jerrold Nadler (D-NY) said he intended to introduce a bill to prohibit deals in which a brand drug maker pays a generic competitor to abandon a patent challenge, delaying their entry into the market. Rep. Nadler has not yet introduced the bill. The House Energy & Commerce Committee passed a version of the Creating and Restoring Equal Access to Equivalent Samples (CREATES) Act with bipartisan amendments earlier this month.

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Schakowsky, Rooney Reintroduce Drug Price Justification Bill
On April 18, Reps. Jan Schakowsky (D-IL) and Francis Rooney (R-FL) reintroduced a bill that would require manufacturers to provide the Department of Health and Human Services (HHS) with advance notice and justification of price hikes on prescription drugs. The Fair Accountability and Innovative Research (FAIR) Drug Pricing Act of 2019 forces drug manufacturers to submit a pricing information and justification report to HHS at least 30 days in advance of drug price increases larger than 10 percent of the drug’s price over one year, or 25 percent over three years.

Pallone, Shalala Introduce Bill to Ban Online E-Cig Sales, Raise Minimum Purchase Age
On April 16, House Energy & Commerce Committee Chair Frank Pallone (D-NJ) and Rep. Donna Shalala (D-FL) introduced a bill allowing the Food and Drug Administration (FDA) to collect user fees for e-cigarettes, raise the minimum age to purchase tobacco to 21 and prohibit online sales of tobacco products. The bill also bans all characterizing tobacco product flavors, requiring the FDA to finalize rulemaking to implement graphic health warnings for cigarette packages, and holds all deemed tobacco products to the same advertising and sales requirements applied to combustible cigarettes. Monitor the bill here.

Bipartisan Bill Introduced to Exempt APMs from Stark Law Provisions
On April 10, Reps. Raul Ruiz (D-CA), Larry Bucshon (R-IN), Ron Kind (D-WI) and Kenny Marchant (R-TX) reintroduced the Medicare Care Coordination Improvement Act of 2019 in the House. The bill provides to alternative pay models the same physician self-referral waivers that accountable care organizations were granted by the Affordable Care Act (ACA). The bill also gives providers working to develop a new demo for a better alternative payment model (APM) a three-year waiver. Moreover, the bill lets APMs and those testing potential APMs get around the Stark law’s volume or value prohibition.

Read more on healthcare policy on the McGuireWoods Consulting website.

Congressional Delegations Travel to Argentina, Brazil and U.K.

The House and Senate are in a two-week recess, set to return to Washington the week of April 29. In the meantime, a congressional delegation visited Argentina and Brazil this week for bilateral discussions on issues of mutual interest. House Minority Leader McCarthy (R-CA), House Armed Services Committee Ranking Member Thornberry (R-TX), House Homeland Security Committee Ranking Member Rogers (R-AL), as well as Senator Scott (R-SC), were among those who made the trip. Separately, Speaker Pelosi (D-CA) and House Ways and Means Committee Chairman Neal (D-MA) led a delegation to London for meetings with U.K. leaders to discuss issues ranging from Brexit to Northern Ireland and NATO.

Pelosi Calls for Reexamination of the Communications Decency Act

On the heels of last week’s House Democratic policy retreat, Speaker Pelosi (D-CA) said in an interview with Recode that Section 230 of the Communications Decency Act should be reexamined, suggesting that it is not out of the question that it may be done away with altogether. “It is a gift to them and I don’t think that they are treating it with the respect that they should…I do think that for the privilege of 230, there has to be a bigger sense of responsibility…and it is not out of the question that it could be removed,” she said.

Internet Exchange Act

Before leaving Washington, Senators Blackburn (R-TN) and Baldwin (D-WI) introduced the Internet Exchange Act, which aims to improve access to the internet, especially in rural communities. Specifically, the bill authorizes the National Telecommunications and Information Administration (NTIA) to make matching grants to establish or expand internet exchanges in areas in which none or few exist.

President Exercises Veto Power

The President kicked off the week at a roundtable on the economy and tax in Burnsville, Minnesota. On Tuesday, he vetoed a joint resolution aimed at ending US support for Saudi-led forces engaged in Yemen’s civil war. Returning the measure to Congress, the President called the resolution “an unnecessary, dangerous attempt to weaken my constitutional authorities, endangering the lives of American citizens and brave service members, both today and in the future.” It is unlikely that Congress will be able to override the veto; the Senate adopted the measure 54-46, short of the two-thirds required.

This morning, the Attorney General Bill Barr held a press conference alongside outgoing Deputy Attorney General Rod Rosenstein several hours before releasing a redacted version of the Mueller report to Congress and the public.

Federal Updates

  • Secretary DeVos testified before the House Education and Labor Committee and answered questions on the president’s FY20 budget request, arming teachers, school choice, and other issues.
  • The House Labor-HHS-Education subcommittee plans to mark up the Department of Education’s FY20 spending bill on April 30 with a tentative full committee markup scheduled for May 8.
  • On April 10, the Director of Education, Workforce and Income Security, Kathryn Laren, testified to the Senate Committee on Agriculture, Nutrition and Forestry. The Government Accountability Office released the testimony titled, “Child Nutrition: Observations on USDA Actions to Improve Program Integrity and Address Improper Payments.”
  • The federally appointed panel of negotiators tasked with reviewing the U.S. Department of Education’s proposed draft rules around accreditation and innovation in higher education reached an agreement. The consensus package of rules:
    • Loosens restrictions on accreditors
    • Includes proposed changes to federal distance education standards regarding faculty and student interaction
    • Provides a fix to the TEACH grant program that allows teachers whose grants were converted to loans to appeal those decisions
  • The House passed the CLASS Act for School Safety on April 1. The bill directs the Department of Homeland Security (DHS) to establish a council to coordinate activities, plans, and policies of the Department aimed at bolstering school security against acts of terrorism, an active shooter, and other threats.

Read more on education policy on the McGuireWoods Consulting website.

Hearings/Markups

Senate Finance Committee: “Drug Pricing in America: A Prescription for Change, Part III”
Tuesday, April 9, 2019: The Senate Finance Committee continued its drug pricing series by inviting pharmacy benefit manager companies (PBMs) to testify before the committee. The invitation was extended on March 12 to Cigna, CVS Caremark and CVS Health, Humana, OptumRx and Prime Therapeutics. The hearing was rescheduled to April 9 due to NATO Secretary General Jens Stoltenberg’s joint address to Congress on the original date, April 3. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: Executives from CVS, Humana and Prime Therapeutics said they would back a bill banning spread pricing, while OptumRx took no position. Cigna said the company would support an industry standard. The executives also said they were open to more transparency, such as having advisory bodies to Congress examine their way of doing business, so long as confidential information is kept from the public. Chairman Chuck Grassley (R-IA) made it clear that the hearings are not meant to regulate the PBMs out of business.

House Ways and Means Committee: Markup of Prescription Drug Pricing Legislation
Tuesday, April 9, 2019: The House Ways and Means Committee held a markup last week on a bipartisan bill aimed at lowering drug prices. The legislation was passed by the committee 40-0. Find legislative text, including recorded amendments and votes here.

Why this is important: The committee unanimously passed the bipartisan Prescription Drug STAR Act (H.R. 2113) which requires price transparency from drug manufacturers and pharmacy benefit managers (PBMs). Rep. Lloyd Doggett (D-TX), despite voting for the bill, criticized the measure for not going far enough. The bill requires drug manufacturers to justify price hikes and high launch prices and orders the Department of Health and Human Services (HHS) to conduct a study on Medicare Part A drug costs, make HHS publish aggregate rebates and price concessions negotiated by PBMs on a public website and push drug manufacturers to submit information to HHS on the average sales prices for drugs in Medicare Part B.

House Committee on Energy and Commerce: “Priced Out of a Lifesaving Drug: The Human Impact of Rising Insulin Costs (Second Hearing)”
Wednesday, April 10, 2019: The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce held a hearing to address the consequences of rising insulin costs. This will be the second hearing on the rising prices of insulin. Eli Lilly, Novo Nordisk and Sanofi, the only three companies that manufacture insulin in the United States, testified about their pricing practices. In March, Lilly reported that the net price of Humalog, a fast-acting insulin taken before meals, decreased in price by 8.1 percent over the previous five years. The price fell to an average of $135 a month per patient, from $147 in 2014. Over the same time, the average list price of Humalog increased 52 percent from $391 to $594. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: House Energy & Commerce Oversight Chair Diana DeGette (D-CO) said she hopes to have bipartisan legislation ready by July or September of this year to make insulin affordableAt the hearing drug manufacturers present did not take responsibility for increased prices, but said they are forced to raise list prices to compensate for the growing rebates demanded by PBMs. The PBMs disagreed, arguing the real reason for the rising costs is the high list prices set by drug manufacturers along with the lack of generic alternatives. Members of the subcommittee were united on the need for taking action, but specifics were not outlined. 

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Senate

Read more on healthcare policy on the McGuireWoods Consulting website.

Two Week Recess

Both the House and the Senate will be in recess for the next two weeks and will return to Washington the week of April 29. During the recess, the House Administration Subcommittee on Elections will hold a series of field hearings on voting rights, including sessions in North Dakota and North Carolina. Looking further ahead, the Senate Armed Services Committee will begin marking up the FY20 National Defense Authorization Act (NDAA) the week of May 20.

Budget Caps

In the coming weeks, Senate Majority Leader McConnell (R-NY) and Speaker Pelosi (D-CA) will endeavor to reach a two-year deal on budget caps. Staff-level negotiations are likely to begin during the recess. After the recess, the House Energy and Commerce Committee is expected to hold a hearing on a potential federal privacy framework with testimony from the Federal Trade Commission.

Department Shake-ups

Following his decision to rescind Ronald Vitiello’s nomination to serve as Director of Immigrations and Customs Enforcement (ICE), the President announced on Sunday evening that Secretary of Homeland Security Kirstjen Nielsen would resign and that Customs and Border Protection Commissioner Kevin McAleenan would step in as Acting Secretary. Secret Service Director Randolph ‘Tex’ Alles, who reports to the Secretary of Homeland Security, was also removed from his position. Career USSS officer James Murray will take over next month. Upon the news, Senate Minority Leader Chuck Schumer (D-NY) called on Alles to testify before Congress about security vulnerabilities at Mar-a-Lago after a Chinese national arrested with counterintelligence equipment. Later in the week, outgoing Secretary Nielsen said that Acting Deputy Secretary of Homeland Security Claire Grady had also sent the President a resignation letter, effective Wednesday. TSA Administrator David Pekoske will temporarily step into that role, with Deputy Administrator Patricia Cogswell managing TSA’s day-to-day operations.

Credentialing Ceremony

Elsewhere, the President attended a credentialing ceremony for new ambassadors on Monday. The administration also took steps this week to rollback an Obama-era policy under which the Cuban Baseball Federation was considered separate from the Cuban government, enabling Cubans to play Major League Baseball in the United States.

Nominations

The Senate considered a number of nominations on the floor this week, including David Bernhardt’s nomination to serve as Secretary of the Interior. Senators voted 56-41 today to confirm Bernhardt, who has been leading the Department in an acting capacity since former Secretary Ryan Zinke resigned.

Net Neutrality, Disaster Aid

The House spent most of an abbreviated work week on the Save the Internet Act, the Democratic proposal to restore Obama-era net neutrality regulations (see below for additional details). Leadership also unveiled a new $17.2 billion disaster aid package that adds $3 billion for Midwest flooding. While the impasse between the House and the Senate over funds for Puerto Rico hurricane recovery continues, senators from states recently impacted by natural disasters will meet with the President this afternoon to discuss a potential path forward. The House adjourned early for the Democratic policy retreat on Thursday and Friday in Virginia.

Read more in our Emerging Technologies Washington Update.

Hearings

House Committee on Energy and Commerce: “Priced Out of a Lifesaving Drug: The Human Impact of Rising Insulin Costs”
Tuesday, April 2, 2019: The Subcommittee on Oversight and Investigations of the Committee on Energy and Commerce will hold a hearing to address the consequences of rising insulin costs. This was the second hearing on the rising prices of insulin. The subcommittee chair, Rep. Diana DeGette (D-CO), is also chair of the House Diabetes Caucus. Insulin has become an example of a drug for which prices have increased significantly. Find a link to witness testimonies, member statements and the hearing live feed here.

Why this is important: The subcommittee is focused on the cost of insulin and putting pressure on manufacturers as they work to address high drug prices. Three companies control 99 percent of the world’s insulin, and Rep. Diana DeGette), chairwoman of the House Energy and Commerce oversight subcommittee, is leading the initiative on bipartisan and bicameral probes into the insulin market.

House Committee on Energy and Commerce: Full Committee Markup
Wednesday, April 3, 2019: The House Committee on Energy and Commerce held a full committee markup that included 12 health care-related bills—six bills were part of a drug package to lower prescription drug costs and the remaining six make reforms to the Affordable Care Act (ACA). Find a link to the legislation discussed and vote tallies here.

Find a full summary of the markup here. 

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Senate

Read more on healthcare policy on the McGuireWoods Consulting website.

FY20 Budget Request Support Continues

Next week, Cabinet secretaries and agency heads will continue to appear before the Appropriations and authorizing committees to support the President’s FY20 budget request.

Drug Pricing

Congress will also continue to examine drug pricing; on Tuesday, the Senate Finance Committee will hold the third in a series of hearings, this one focused on pharmacy benefit managers (PBMs). The House Energy and Commerce Subcommittee on Oversight and Investigations will also have a hearing Wednesday on insulin pricing.

Broadband Mapping, Free Speech

The Senate Commerce Committee will examine broadband mapping on Wednesday, while a Senate Judiciary subcommittee chaired by Senator Ted Cruz (R-TX) will hold a hearing on “Stifling Free Speech: Technological Censorship and the Public Discourse.”

Read more in our Emerging Technologies Washington Update.

Disaster Aid

A $13.5 billion disaster supplemental continued to stall in the Senate this week as Democrats press for more funds for Puerto Rico’s hurricane recovery efforts, failing twice to attract the 60 votes needed to move forward.

House Judiciary Authorizes Subpoena

On the other side of the Capitol, the House Judiciary Committee voted along party lines on Wednesday to authorize Chairman Jerry Nadler (D-NY) to issue a subpoena to obtain the full report prepared by Special Counsel Robert Mueller. Nadler does not plan to use that authority right away, saying he instead prefers to work with Attorney General Bill Barr to make the report public without resorting to a subpoena.

NATO

Members of the House and Senate convened on Wednesday to hear from North Atlantic Treaty Organization (NATO) Secretary General Jens Stoltenberg. President Trump also hosted Stoltenberg at the White House for a bilateral meeting.

VAWA

Today, the House voted 263-158 to reauthorize the Violence Against Women Act (VAWA), which lapsed in February.

President Signs Memorandum Combating Trafficking in Counterfeit and Pirated Goods

Yesterday, the President signed a presidential memorandum on combating trafficking in counterfeit and pirated goods. Citing a lack of government resources, the memorandum is intended to place more responsibility on the private sector, including online marketplaces and intermediaries and others in the supply chain, to combat the sale of counterfeit goods. The Departments of Commerce, Homeland Security, and Justice are also tasked with compiling a report on the sale of counterfeit products online, which the administration will rely on to provide further policy changes.

The President announced last Friday that Administrator Linda McMahon is stepping down from the Small Business Administration on April 12 to transition to a political group supporting his reelection bid.

Read more in our Emerging Technologies Washington Update.