HEALTH CARE BRIEFING: Senate Deal Complicates Drug Rebate Battle

By Brandon Lee

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A lawsuit against a rule to upend the payments drugmakers make to pharmacy liaisons could come to an end as lawmakers weigh delaying the rule and using the savings to pay for billions in infrastructure and health-care improvements.

A group of pharmacy benefit managers—which help decide how a drug will be covered by health insurance—says the rule would significantly disrupt negotiations with drugmakers. But an amendment to a bipartisan infrastructure deal would delay the rule’s implementation until Jan. 1, 2026—leaving the group with less of a basis to pursue their challenge.

“You usually need something that is going to happen that could harm you,” to have standing to sue, said Tara Dwyer, a health-care attorney at Mintz. “And so if this is again so many years out, the question is, is that harm real enough yet?”

The drug rebate rule would cost $177 billion over a decade, according to a Government Accountability Office estimate. Senators plan to use part of that cost to pay for the $550 billion infrastructure bill (H.R. 3684) to help improve the nation’s highways, bridges, and broadband. The rest of the rule’s estimated cost would likely go toward a $3.5 trillion budget reconciliation bill that could expand federal health and child care programs and extend the child tax credit, among other things.

If Congress clears both the infrastructure and reconciliation measures for President Joe Biden, the rebate rule could be delayed for the full decade. Pharmacy benefit managers will want to continue with the lawsuit, but “there’s a chance that a court could decide that it’s too far in the future,” Dwyer said. Read more from Shira Stein.

Elsewhere in negotiations on the the reconciliation package, Sen. Amy Klobuchar (D-Minn.) and 11 others called on Majority Leader Chuck Schumer (D-N.Y.), Budget Chairman Bernie Sanders (I-VT), and Finance Chairman Ron Wyden (D-Ore.) to include language to lower prescription drug costs. The lawmakers highlighted the need for provisions giving Medicare the authority to negotiate prices with drugmakers, according to a statement. Read the letter here.

The Senate moved closer this weekend to passing the infrastructure package after a drawn-out debate pushed action into this week and left the status of several proposed changes unsettled. Yesterday, 18 Republicans joined with all 50 senators who caucus with Democrats to limit debate on the bill, an indication of bipartisan support for passage, which could come late today or early tomorrow. Laura Davison, Steven T. Dennis and MacKenzie Hawkins have the latest.

Happening on the Hill

‘Skinny Label’ Ruling Comes Amid Effort on Hill: Lawmakers vying to push down prescription drug prices may have had a wrench thrown into their efforts due to a federal appeals court, following a verdict experts say will make it more complicated for generics to compete. Brand-name manufacturers often take out patents on new uses for older drugs. Generic makers often use “skinny labels” on their versions of drugs to carve out the brand’s new uses to prevent courts from holding them liable.

But on Thursday, the U.S. Court of Appeals for the Federal Circuit may have made it harder for generic makers to use this practice to evade legal action. In reinstating a $235 million patent infringement ruling against Teva Pharmaceutical Industries after finding the company encouraged doctors to prescribe its generic version of GlaxoSmithKline‘s Coreg for unapproved use, experts say the court may have created complications for generic providers trying to get their own products into the market. Ian Lopez has more.

Democrats Probe Private Equity in Hospice Care: Sens. Wyden, Elizabeth Warren (D-Mass.) and Senate Banking Chair Sherrod Brown (D-Ohio) launched an investigation into private equity ownership of for-profit hospice corporations. The investigation centers around Kindred at Home and the period where the company was purchased and owned by Humana and two private equity firms, TPG Capital and Welsh, Carson, Anderson & Stowe, the senators said, Kasia Klimasinska reports.

DOJ Urged to Appeal Purdue Pharma’s Bankruptcy Plan: Democratic lawmakers urged the Justice Department to immediately appeal Purdue Pharma’s bankruptcy plan they claim would deny victims and states from pursuing their claims against the Sackler family. “The Sacklers bear a significant responsibility for the opioid crisis,” Sen. Warren and two others said in a statement Friday. “They should not be allowed to abuse the bankruptcy system to avoid accountability for their actions.” Se Young Lee has more.

The Coronavirus Pandemic

Cases Reach Six-Month High Even as Vaccinations Rise: New Covid-19 cases in the U.S. have rebounded to more than 100,000 a day on average, returning to the levels of the winter surge six months ago. Weekly cases on Friday passed 750,000, the most since early February, according to data compiled by Johns Hopkins University and Bloomberg. Almost 135,000 weekly cases were seen in Florida on Friday, a record for a state that makes up about one in five U.S. cases.

Cases are rising even as the pace of vaccination has begun to tick up after months of decline, according to the Bloomberg Vaccine Tracker, especially in hard-hit states like Louisiana and Arkansas. Daily average deaths more than doubled in the past month, even while remaining far below the levels of last winter, with health-care experts warning that the pace of new infections could bring on deadlier and more transmissible mutations. Read more from Ian Fisher.

Fauci Says Booster Shots May Go ‘Soon’ to Vulnerable: Anthony Fauci, the nation’s top infectious-disease doctor, said Covid-19 vaccine booster shots should be given “reasonably soon” to people with weakened immune systems. “We need to look at them in a different light,” Fauci told CNN yesterday. “We would certainly be boosting those people before we boost the general population that’s been vaccinated, and we should be doing that reasonably soon.” Read more from Yueqi Yang.

  • Fauci also affirmed businesses and colleges should consider requiring people to get vaccinated against Covid-19. Fauci said he opposed a federal vaccine mandate but that the velocity of the virus’s spread should spur private organizations to think about requiring shots. Read more from John Tozzi and Madison Mills.
  • Secretary of Labor Marty Walsh also endorsed companies mandating vaccines for their employees. “Anything we can do to encourage people to get back into the workforce is important,” Walsh told Bloomberg TV. He said many Americans aren’t getting the vaccine due to political reasons and politics shouldn’t play a role, Jennah Haque reports.

Florida Parents Sue DeSantis to Allow Mask Mandates: A group of parents in Florida asked a judge to block an executive order by Gov. Ron DeSantis (R) that bans school districts from imposing mask requirements when classes resume in the fall. The lawsuit, filed Friday in state court in Florida, comes amid a fierce national debate about whether children in schools should wear masks as the delta variant of the coronavirus sweeps the country and case counts rise. The lawsuit argues that DeSantis’ order violates a provision of the state constitution that requires public officials to ensure schools are safe for students. Read more from David Yaffe-Bellany.

Eviction Ban Needed to Curb Delta, DOJ Says: The Biden administration asked a federal judge in Washington to uphold the new moratorium on evictions in areas of the U.S. hit hardest by the coronavirus, calling it a necessary public-health action as the Delta variant spreads. The government was responding to a court filing this week by two landlord groups seeking to scuttle the eviction freeze, which came after a previous nationwide moratorium from the CDC expired. Read more from David Yaffe-Bellany.

Biden Boosts Trump-Era Contract to Push Vaccines: The Biden administration awarded a $150 million contract extension to a market research firm that encourages vaccinations, as the White House struggles to convince more Americans to get shots. The Health and Human Services Department gave Fors Marsh Group a second communications contract that will continue into 2022, as 30% of U.S. adults remain unvaccinated against Covid-19 as of last week. Read more from Alex Ruoff.

Long Covid Set to Drain Disability Fund: The Biden administration recently announced a growing number of individuals with lingering Covid-19 symptoms could qualify for disability resources and protections—a win for victims of “Long Covid.” That could bring more harm than good to the disability community if funding for health, housing and social programs isn’t increased, an analysis from the Center for American Progress found. Read more from Hadriana Lowenkron.

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What Else to Know Today

Biden Taps Disability Rights Attorney for HHS Counsel: Biden has chosen Samuel Bagenstos to be his general counsel for HHS. If confirmed, he’ll help the agency put out airtight policies and defend it against legal challenges. Bagenstos has been serving as general counsel at the Office of Management and Budget since early 2021. He previously was a law professor at the University of Michigan and principal deputy assistant attorney general for civil rights at the Department of Justice. Read more from Shira Stein.

Health Insurers, Advocates Spar on ACA Proposals: Insurers and consumer advocates are facing off over a Health and Human Services Department proposal to extend the Affordable Care Act’s enrollment period and permit full-year sign-ups for those with low incomes. In public comment letters on the update proposal of Obamacare benefits and payment parameters, major insurers like Anthem, Centene and UnitedHealthcare all opposed a plan to boost the period from 45 days to 75 days. Tony Pugh has more.

HHS Proposes Nixing Foreign Drug Rate Rule: The Health and Human Services Department on Friday proposed to withdraw a Trump-era drug payment model tying U.S. costs to foreign prices. The agency didn’t rule out releasing its own policy for cutting down skyrocketing drug costs. The proposal to withdraw the interim final rule “does not reflect any judgment by HHS regarding future policy,” the HHS said in a Federal Register release. Read more from Ian Lopez.

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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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