HEALTH CARE BRIEFING: Pharmacy Benefit Managers Targeted by GOP

House Republicans say Democrats are making a crucial misstep by taking on drug pricing reforms without focusing on the role pharmacy benefit managers play in the rising costs of medicines in the U.S.

The chamber today is scheduled to consider the $1.75 trillion tax and spending package encompassing much of President Joe Biden’s economic agenda.

Democrats have “given a free pass to pharmacy benefit managers even though they play an outsized role in driving up rebates and list prices of prescription drugs,” Rep. James Comer (R-Ky.) said during a forum on PBMs hosted by Republican members of the House Oversight and Reform Committee.

Comer and other Republicans remarked that PBMs—companies hired by insurers to managed prescription drug benefits—reap rewards from rebates, essentially coupons given out by drugmakers, and pharmacy fees. He said both have driven up the cost of many drugs. PBM industry groups have countered that drugmakers themselves are free to set their own prices and should bare responsibility for drug costs.

Democrats, in their proposed $1.75 billion spending bill, take aim at drugmakers by empowering the government to negotiation with pharmaceutical companies for lower prices and capping price increases. Sen. Ron Wyden (D-Ore.), who has played a central role in designing Democrats’ drug pricing bill, told reporters on Tuesday that he wants to add more PBM reforms to the spending bill but declined to offer details.

Comer said if Republicans retake the majority in the House he expects they’ll try to take on PBM reforms, Alex Ruoff reports.

• A potential $10,000 penalty in Democrats’ sweeping spending package for pharmacies that don’t quickly respond to drug cost surveys is prompting backlash from trade groups, which argue Congress should focus instead on the practices of companies setting medication costs. The $1.75 trillion spending bill, which the House is poised to consider this week, says any retail community pharmacy that “knowingly fails to respond” to a National Average Drug Acquisition Cost survey may be subject to the civil monetary penalty—up to $10,000 per day. Celine Castronuovo has more.
• Thousands of nursing homes would be forced to close and thousands of others would have to stop taking new admissions if provisions of the Build Back Better Act become law, industry officials said. House Democrats’ $1.75 trillion package requires nursing homes to have a registered nurse on site at all times. In addition, it would impose mandatory minimum staffing quotas for all facilities a year after HHS conducts a study to determine ideal staffing levels for nursing homes. Tony Pugh has more.

Read the BGOV Bill Summary by BGOV’s legislative analysts.

Also Happening on the Hill

Senate GOP Plays Wait and See With FDA Pick: Biden will need the support of Senate Republicans to confirm his choice to lead the FDA, but, so far, the White House has done little to convince them, senators say. Republicans on the Senate health panel that will first consider Robert Califf, Biden’s choice to lead the Food and Drug Administration, said this week they’ve gotten no official information on his nomination. That lack of material means they’re hesitant to endorse the nominee, even though many of them supported him for the same position five years ago. Read more from Alex Ruoff and Ian Lopez.

• Separately, Biden yesterday announced his intent to nominate Rebecca Jones Gaston for commissioner for the Administration for Children, Youth and Families at HHS, according to a press release.

Vaccine Rule Set for Political Test as GOP Forces Vote: Republicans in Congress are setting up a political showdown on Biden‘s vaccine-or-test rule for private firms, albeit with a vote that’s not likely to actually undo the policy. The entire GOP caucus backed a measure yesterday that would strike the rule, setting up a floor vote as soon as December. GOP Leader Mitch McConnell (R-Ky.) and Sen. Mike Braun (R-Ind.) filed a resolution to repeal the rule through the Congressional Review Act, but Republicans in both chambers would need a veto-proof majority to override Biden’s veto. Courtney Rozen has more.

Senators Want 9/11-Style Commission on Covid-19 Crisis: A bipartisan group of five senators, including Sens. Dianne Feinstein (D-Calif.) and Roger Marshall (R-Kan.), are pushing to include a provision in must-pass defense authorization legislation that would establish a national commission on the pandemic styled after the 9/11 Commission. Such a commission is needed to “better understand the vulnerabilities COVID-19 has revealed in our health care system” and “to improve our overall preparedness for future public health crises,” they said in a letter. Read a statement here.
Related: NDAA Debate Launches in Senate

The Coronavirus Pandemic

Odds Are GOP-Heavy Panel Hears Shot-or-Test Rule at 6th Circuit: A federal appeals court in Cincinnati could make sure that Republican-appointed judges control the legal challenge to the Biden administration’s vaccinate-or-test rule, making defending the regulation more difficult. The U.S. Court of Appeals for the Sixth Circuit will host the consolidated case against the regulation after being picked on Tuesday in a lottery. The case typically would go before a three-judge panel, which could be composed of a majority of judges who were appointed by Democratic presidents, but that would defy the odds at a tribunal with twice as many Republican-appointed jurists compared to those tapped by Democrats.

But the Buckeye Institute, a conservative Ohio-based think tank, has asked the active-status judges on the Sixth Circuit to break from normal procedure and hear the case. GOP-appointed judges on active status outnumber those selected by Democrats 11-5. The circuit accepted a similar invitation in an abortion-related case earlier this year. Read more from Robert Iafolla.

• As many as 40% of U.S. airport security workers haven’t been vaccinated for Covid-19 as an immunization deadline for federal employees and the busy holiday travel season converge. Many Transportation Security Administration workers are resisting the requirement as the Nov. 22 deadline approaches, said Hydrick Thomas, president of the American Federation of Government Employees’ division representing front-line airport security officers. Thomas estimated those who are hesitant represent about four in 10, though acknowledged he didn’t have hard numbers. Read more from Alan Levin.

U.S. to Fund 1 Billion-Dose Boost in Vaccine Output: The Biden administration is offering drug manufacturers, including Pfizer and Moderna, funding to expand domestic production capacity of mRNA vaccines by one billion doses a year by the second half of 2022. The plan, announced by Biden’s White House yesterday, is aimed at increasing availability of Covid-19 vaccines and also building capacity to address future health crises. “We hope companies step up and act quickly to take us up on this opportunity,” Jeff Zients, who serves as Biden’s Covid-19 response coordinator, said at a press briefing. Read more from Josh Wingrove.

A recent resurgence in Covid-19 cases has government officials issuing warnings for a second holiday season. The seven-day average of new hospital admissions with confirmed Covid-19 is rising in 25 states from a week earlier, with clusters of concern emerging in the upper Midwest and Northeast, according to the Department of Health and Human Services. Two weeks earlier, the trend line was rising in only 14 states. Read more from Stacie Sherman.

• Meanwhile, nine states in the U.S. are offering booster shots to all adults, contradicting federal guidance and reigniting the national debate on eligibility for supplemental vaccine doses. Currently, boosters in the U.S. should be limited to those with pre-existing medical conditions, people 65 or older, and those whose work puts them at high risk, the CDC says. But nine states independently broadened access to boosters, and that number is set to grow. The diverging guidance has some experts worried. Fiona Rutherford has more.

More Headlines:

• Long Covid’s Catch-22: Too Sick to Work, Not Quite Disabled
• Florida Legislators Agree to Fine Employers for Vaccine Rules
• Florida Moves to Strip Vaccine Mandate Power from Health Officer
• Workplace Retaliation Tied to Covid Is Prohibited, EEOC Says
• Mexico Covid-19 Czar Wants U.S. to Relax Travel Restrictions
• Colorado Hospitals ‘Threatened’ With Just 75 ICU Beds Open
• Pandemic Tested Limits of Regulators, Roche’s Anderson Says

What Else to Know Today

Biden’s Overdose Prevention Plan Faces Social, State Barriers: The Biden administration’s sweeping plan to quell rising drug deaths in the U.S. could face roadblocks as treatment specialists grapple with limitations in tracking overdoses and varying state regulations. Harm reduction, recovery support, evidence-based treatment, and primary prevention are the four tenets of Biden’s strategy for fighting a crisis that’s evaded policymakers since the Obama era. But tackling a hodgepodge of state policies, varied treatment approaches, and funding restraints will be key for Biden’s efforts, experts say. Ian Lopez has more.

• The U.S. hit the grim milestone of 100,000 drug overdose deaths annually, a sign that the opioid crisis deepened at the height of the Covid-19 pandemic. An estimated 100,306 Americans died of an overdose in the 12 months ending in April, a period that included months of lockdowns and business restrictions across the country, according to provisional data from the CDC’s National Center for Health Statistics. The death toll is up 29% from the previous year. Read more from Alex Tanzi.
• White House Office of National Drug Control Policy Director Dr. Rahul Gupta, who was confirmed by the Senate last month as the first-ever physician to serve in the role, will attend his ceremonial swearing in at the White House today, according to a press release.

HHS Seeks Information on Prescription Drug Price Reporting: Employer health plans and other health insurance plans must report on prescription drug and health coverage costs under a rule issued yesterday by four U.S. agencies. The interim final rule issued by the departments of Health and Human Services, Labor, Treasury and the Office of Personnel Management is required under the No Surprises Act and transparency rules in the Consolidated Appropriations Act of 2021. Health plans are required to report information about the most frequently dispensed prescription drugs covered. Read more from Sara Hansard.

HHS Delays Drug Rule Allowing Multiple Prices: The HHS delayed by six months provisions of a Medicaid drug contract rule that lets manufacturers give states different prices for the same products. Drugmakers currently offer the same low price to all state Medicaid plans, which is commonly referred to as a drug’s “best price.” The Trump-era rule could allow companies to offer different discounts to different states without forcing drugmakers to lower the price for everyone. But lawyers said it would have been an administrative nightmare to enforce. Alexis Kramer has more.

More Headlines:

• Smallpox Drugmaker SIGA Extends Gain to Highest Since 2018
• Pennsylvania Hospitals Lose Bid to Ax No-Poach Antitrust Claims
• Blue Cross Network Wins Antitrust Appeal Over LifeWatch Coverage

To contact the reporters on this story: Brandon Lee in Washington at blee@bgov.com; Alex Ruoff in Washington at aruoff@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