HEALTH CARE BRIEFING: Drug-Price Negotiation Clings to Life


By Brandon Lee

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Sen. Joe Manchin sent his party scrambling this week to revise its sweeping domestic policy agenda on almost everything but drug-price negotiation and bolstering Obamacare.

Manchin (D-W.Va.) yesterday repeated his opposition to a House-passed slate of tax changes, climate provisions, and other major policy goals Democrats are seeking. That package, the Build Back Better Act, would also empower the government to negotiate with drugmakers and pave the way for a major expansion of Medicaid.

Senate Majority Leader Chuck Schumer (D-N.Y.) is convening a caucus meeting today to discuss the path forward and told colleagues the Senate would vote very early next year on the measure and “keep voting on it until we get something done.” Whether Manchin will back the new version remains to be seen, but groups aligned with Democrats say the health provisions are unlikely to be dropped because the senator supports them and some would be needed to offset the spending in the package.

“It will be smaller but I don’t think it will fail,” Leslie Dach, chair of Protect Our Care, said. “Manchin has been very positive about the health care provisions, particularly about Medicare negotiations and lowering health insurance premiums, and there is every reason to believe they will be in the bill that passes.”

Manchin in a radio interview yesterday said he’s concerned about the overall size of the roughly $2 trillion package. He opposes temporary safety-net programs that are likely to be extended, as well as programs with no work requirements or income limits. Manchin said he’s supportive of drug-price negotiation efforts but warned that the current version might exclude too many new drugs.

“If you’re going to negotiate then negotiate,” he said. “Don’t start picking and choosing and playing games.”

The bill would subject only older drugs, some more than a decade after first approval, to government negotiations. Empowering the government to seek lower drug prices and requiring drugmakers to pay back profits from raising the cost of medicines above inflation would reduce government spending by about $128.2 billion over 10 years, according to the Congressional Budget Office.

A Senate Democratic aide said lawmakers aren’t looking to make major changes to the drug price provisions largely because it could cost them other votes. Democratic leaders struck a deal with holdouts like Sen. Kyrsten Sinema (D-Ariz.) before the House vote. Sinema and others have sought to preserve exclusivity granted for new drugs to make sure drugmakers could still profit from developing new medicines. Read more from Alex Ruoff.

Erik Wasson and Laura Davison outline specific health provisions that may stay in the bill, and what’s at risk of slipping out.

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Biden to Send 500 Million Free Tests

President Joe Biden will send 500 million free coronavirus tests to Americans’ homes beginning next month and dispatch the military to shore up overwhelmed hospitals as the U.S. confronts a resurgent pandemic.

Biden will announce new measures to try to curb the virus today, the day after the CDC said the omicron variant first identified in southern Africa now accounts for most new U.S. cases. He aims to boost testing, hospital care and vaccinations without any new lockdowns or closings.

He’ll also deliver a stark warning to the unvaccinated, a senior administration official said, telling them that they risk serious disease or death while assuring Americans who’ve gotten their shots that they can safely gather with their families over the holidays.

In the speech, the president will again seek to reassure Americans that his administration can combat yet another resurgence of the virus, the second of his presidency. But he confronts a perception that the government was caught flat-footed as cases began to mount earlier this month and Americans began complaining that test kits, crucial to control transmission, had become scarce.

Vice President Kamala Harris told the Los Angeles Times that the administration was caught off guard by the emergence of the omicron variant of the virus, which has now been identified in most states. Read more from Josh Wingrove.

Omicron Becomes Dominant U.S. Strain With 73% of Covid Cases: The omicron variant accounted for 73% of all sequenced Covid-19 cases in the U.S., surging from around 3% last week, according to the latest federal estimates. The highly mutated coronavirus strain has been detected across the country, the Centers for Disease Control and Prevention said in a model that it updates weekly. The sizable increase in omicron’s overall prevalence underscores fears that the rapidly spreading variant could produce a wave of infections that will strain the U.S. health-care system. Read more from Timothy Annett.

School Closings Surge 82% as Omicron Spreads Across the U.S.: For U.S. school officials struggling with a sharp rise in Covid-19 cases, winter break can’t come soon enough. There were 646 Covid-19-related school closings for this week, up from 356 the week before, according to Burbio, a data service that aggregates calendars across the nation. Schools in states such as Michigan, Maryland, Pennsylvania and Ohio shifted to virtual learning or closed early for winter break. Several already are planning remote class in January. Read more from Stacie Sherman.

More on the Coronavirus Pandemic

Democrats Urge Vaccine-or-Test Mandate for U.S. Air Travel: Democratic lawmakers are urging the Biden administration to mandate proof of a Covid-19 vaccine or a negative test result for all domestic air travel as the more Americans take flights during the holiday season, Lillianna Byington reports. Sen. Dianne Feinstein (Calif.), as well as Reps. Don Beyer (Va.), Eric Swalwell (Calif.) and Ritchie Torres (N.Y.), wrote the request in a letter yesterday to Federal Aviation Administration Administrator Steve Dickson and Rochelle Walensky, director of the Centers for Disease Control and Prevention.

“Ensuring the health and safety of air travelers and their destination communities is critical to mitigating the ongoing COVID-19 surge, especially as the virus continues to evolve,” the lawmakers wrote. “Travel at our nation’s airports has essentially returned to pre-pandemic levels but the risk from COVID-19, including from its new variant Omicron, continues to present a major public health threat.”

High Court to Get Crack at Vaccine Rule in Early 2022: The U.S. Supreme Court likely won’t decide until January whether to halt the Biden administration’s Covid-19 shot-or-test rule for large employers, leaving companies in limbo as they prepare to comply with the measure amid the spread of the highly contagious omicron variant. The high court asked the government to respond by Dec. 30 to emergency stay requests from states with attorneys general, businesses groups, conservative advocacy organizations, employers, and other opponents of the regulation.

At least eight separate petitions—addressed to Justice Brett Kavanaugh—rolled in after the U.S. Court of Appeals for the Sixth Circuit allowed the regulation to go into effect late last Friday. Kavanaugh, the Trump-appointed justice who is responsible for emergency petitions from the Sixth Circuit, can weigh the requests on his own or refer them to the full court. But the timing of the case adds onto complications for businesses that have been forced to reconsider in-person working arrangements as new infections go through another surge nearly two years into the pandemic. Read more from Robert Iafolla.

  • The hundreds of thousands of employers covered by OSHA’s Covid-19 vaccination-or-testing mandate should be ready for inspections starting Jan. 10, attorneys and consultants are warning. While the Occupational Safety and Health Administration won’t require employers to have workers fully vaccinated or tested at least weekly until Feb. 9, OSHA can start citing employers earlier for other violations of the Covid-19 emergency temporary standard. Read more from Bruce Rolfsen.
  • A federal court in Missouri blocked the Biden administration’s Covid-19 vaccine mandate for government contractors in 10 states, becoming the latest to grant an injunction as part of a series of challenges to the president’s power to set workplace requirements via executive order. U.S. Magistrate Judge David Noce of the Eastern District of Missouri sustained a preliminary injunction against the order, which was challenged by a state coalition led by Missouri. Read more from Erin Mulvaney.

Moderna Says Third Shot Fights Omicron: A third shot of Moderna’s coronavirus vaccine increased antibody levels against the omicron variant, results the company described as reassuring while it works on a shot tailored to the new strain. A 50 microgram booster dose produced a 37-fold increase in neutralizing antibodies, the company said in a statement yesterday. That is the same dosage as the currently authorized Moderna booster, which is half of the dose used for primary immunization. Read more from Suzi Ring, Naomi Kresge and Robert Langreth.

  • Meanwhile, people who got a Johnson & Johnson vaccine in the U.S. should seek an mRNA booster shot, the CDC clarified yesterday to Bloomberg Law. The preference for booster vaccines made by Pfizer-BioNTech or Moderna follows the agency’s decision last week to recommend the mRNA vaccines over J&J’s, as the one-shot vaccine has been tied to rare but serious clots. Jeannie Baumann has more.

Nursing Homes Seek Approval to Restrict Visits As Omicron Surges: The nursing home industry—bracing for a spike in Covid-19 infections due to the omicron variant—has asked the Biden administration to amend current guidelines requiring them to provide unlimited, unrestricted visitation for residents and preventing them from restricting access to the facilities. The agency’s updated November guidance on visitation appears to forbid “any restriction on visitation, regardless of staffing levels, community positivity rates, or severity of facility outbreak,” officials from three leading industry trade groups said in a Dec. 17 letter. Read more from Tony Pugh.

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What Else to Know Today

Biogen Cuts Alzheimer’s Drug Cost After Pushback: Biogen said it would reduce the list price of its Alzheimer’s disease drug Aduhelm in half in the U.S., a move that comes after the treatment’s high cost spurred fears that it would strain Medicare and health insurers. The company said in a statement yesterday it would reduce the annual list price of the treatment to $28,200 to lower out-of-pocket costs for patients and lower “the potential financial implications for the U.S. health-care system.” That’s an unusual move by a drugmaker for a product so soon after it’s approved. Read more from Angelica Peebles and John Tozzi.

  • Following the cut, Senate Finance Chair Ron Wyden (D-Ore.) said the change “highlights the stakes of high cost prescription drugs for seniors and taxpayers,” and said Medicare should still not raise premiums next year. “With this price decrease for Aduhelm, there is even less justification for the planned increase in Medicare Part B premiums. The wheels of government must turn quickly when it comes to protecting seniors.”

Cheaper Insulin Is Second to Win FDA Approval: Americans living with diabetes now have another option for insulin treatment after the Food and Drug Administration approved a second lower-cost product that acts nearly identical to the biologic drug. The FDA yesterday gave the green light to Eli Lilly’s biosimilar Rezvoglar as part of the office’s efforts to promote competition among insulin makers and ease access for patients. The approval means the drug has no clinically meaningful differences from Sanofi’s Lantus and can be prescribed as an alternative. Read more from Celine Castronuovo.

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With assistance from Lillianna Byington

To contact the reporter on this story: Brandon Lee in Washington at blee@bgov.com

To contact the editors responsible for this story: Zachary Sherwood at zsherwood@bgov.com; Giuseppe Macri at gmacri@bgov.com; Michaela Ross at mross@bgov.com

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