HEALTH CARE BRIEFING: Trump Weighs Forcing U.S. Drug Production

President Donald Trump may use executive powers to require pharmaceutical companies to make drugs domestically to counter Americans’ dependence on overseas manufacturing, Health and Human Services Secretary Alex Azar told Bloomberg Radio yesterday.

The coronavirus “brought home that core elements of our medical-supply chain are just as strategic to our national security” as “nuclear submarines and aircraft carriers are, and have to be treated with that same kind of approach, which is to say that we have core domestic manufacturing capabilities” Azar said.

“It might mean that we have to use our powers under the Defense Production Act or otherwise to fund and incentivize domestic manufacturing” for personal protective equipment and pharmaceuticals, he said. The act gives the president authority to order businesses to prioritize federal needs.

• Presumptive Democratic nominee Joe Biden also unveiled yesterday a plan that aims to bolster U.S. supply-chain capabilities to cut reliance on foreign countries in times of crises. His plan likewise includes invoking the Defense Production Act to expedite the production of urgent medical supplies, Tyler Pager reports.

The American drug industry is largely dependent on overseas manufacturers, particularly in China, for key building blocks known as “active pharmaceutical ingredients.” As the outbreak shut down much of China’s economy earlier this year, drug production there was curtailed. Experts have expressed worry that corners may be cut to ramp up production again, leading to unsafe medicines.

On Monday, Trump’s Chief of Staff Mark Meadows said that the White House is preparing a series of executive orders, including one on lowering drug prices, a problem that the administration has promised to tackle but hasn’t had much success making a big impact on.

When asked about it, Azar would only say that Trump is focused on three areas: getting drugmakers to stop charging the U.S. higher prices than other countries are willing to pay, lowering prescription costs for seniors, and opening the door to imported treatments. The third point is a controversial topic that hasn’t been supported by the Food and Drug Administration in the past.

“He’s deeply committed to the concept that people should have the freedom to get their drugs imported from abroad if they can get them in a safe, effective way that reduces their cost,” Azar said, Anna Edney and Kevin Cirilli report.

• Separately, the Trump administration sees drug price transparency, as well as surprise medical billing and and tweaking telemedicine reimbursement rates, as possible areas for bipartisan agreement in the next pandemic aid bill, Politico reports.
• The administration wants Congress to pass another stimulus package by the first week in August, before lawmakers head home for their annual summer recess, and to keep the cost at $1 trillion or less, according to Vice President Mike Pence’s top aide Marc Short. Read more from Jordan Fabian and Cirilli.

Happening on the Hill

Labor-HHS-Education Bill Advances: The House Appropriations Labor-HHS-Education Subcommittee advanced by a vote yesterday of 9-6 a measure fund the Health and Human Services Department in fiscal 2021 at $96.4 billion, a $1.5 billion increase from fiscal 2020.

One way this bill differs from prior years is in its emergency funding for the Biomedical Advanced Research and Development Authority, which is playing a key role in Operation Warp Speed’s efforts to accelerate the development of a coronavirus vaccine, Shira Stein reports.

BARDA would receive $4.5 billion to develop and make vaccines and therapeutics for public health emergencies. The agency has spent at least $2.76 billion on the development and trials of Covid-19 therapeutics, technologies, and vaccines, according to its website.

The bill also appears to address decades of public health funding cuts that have led to the decay of the nation’s public health infrastructure.

Rep. Tom Cole (R-Okla.), the panel’s ranking Republican, said he is disappointed that almost the entire budget increase for the National Institutes of Health was done in emergency spending because that doesn’t provide consistent funding for the agency.

Read more: Focus on Vaccine, Public Health as Lawmakers Weigh HHS Funding

Democrats Say Trump Must Close Test Loophole: Congressional Democrats want the Trump administration to revisit guidelines they argue allow insurance companies to deny coverage claims for Covid-19 tests and related services. It’s “unacceptable that this administration’s priority seems to be giving companies loopholes instead of getting people the free testing they need,” they wrote in a letter to several Trump administration officials, Victoria Hodge reports.

Virus and A.I.: The House Financial Services Task Force on Artificial Intelligence plans a virtual hearing today on how artificial intelligence can be used to track Covid-19 and assist in vaccine development.

National Virus Response: The House Homeland Security Committee holds a virtual hearing today to examine the national response to Covid-19.

U.S. Plans a Testing Surge

The federal government is ramping up coronavirus testing in Louisiana, Texas and Florida, three states seeing a surge in Covid-19 infections, as health officials attempt to get a firm grasp on how the fast-moving pandemic is evolving. Eight temporary testing sites will each perform as many as 5,000 free tests a day, the HHS said. Four sites opened yesterday in Baton Rouge, La., while one in Edinburg, Texas, and three in Jacksonville, Fla., will open today. The sites will remain open for up to 12 days.

Increased testing could help health experts get a clearer picture of how the coronavirus is moving through the population, as officials weigh how far to go in reopening the economy — or in rolling back steps already taken to revive business. Read more from David R. Baker, Michelle Fay Cortez and Shira Stein.

U.S. Exceeds Virus Testing Goals: The Trump administration for the first time eclipsed its goal of performing around 12.9 million Covid-19 tests in June, but wait times to get results are increasing. Health providers conducted about 16 million Covid-19 tests last month, completing an average of 600,000 tests per day, Health and Human Services Department Assistant Secretary Brett Giroir said. Read more from Shira Stein.

More on Statewide Situations:

• New Infections in Texas Jump by More Than 10,000 for First Time
• Florida’s Positivity Rate Soars, Hurting DeSantis’ Reopening Case
• N.Y., N.J. and Connecticut Add Three States to 14-Day Quarantine
• New Jersey’s Transmission Rate Rises Again to 1.05, Up From 0.64
• NYC Board Votes to Reopen Childcare Centers July 13

More on Reopenings:

• Trump Says He Will Put Pressure on Governors to Open Schools
• Fauci Says Local Governments Should Require Masks in Public
• Birx Says States Mandating Masks Can Change Course of Pandemic

Treatment & Research

U.S. Starts Clock to Leave WHO: The Trump administration sent a letter giving the United Nations a one-year notice for the U.S. to withdraw the World Health Organization, formalizing Trump’s efforts to leave the international group even as the coronavirus rages across the U.S. and in many other nations.

The letter was sent more than a month after Trump announced on May 29 that the U.S. would leave the WHO because of what he said was its undue deference to China and failure to provide accurate information about the virus. But critics have said the move is aimed at distracting from the U.S. administration’s failure to control the virus and that leaving the agency now could cost lives.

The withdrawal was criticized by Senate Health, Education, Labor and Pensions Chairman Lamar Alexander (R-Tenn.). “Certainly, there needs to be a good, hard look at mistakes the World Health Organization might have made in connection with coronavirus, but the time to do that is after the crisis has been dealt with, not in the middle of it,” Alexander wrote in a statement. Read more from Nick Wadhams, Jennifer Jacobs, and David Wainer.

Novavax’s Vaccine Gets $1.6 Billion in U.S. Funds: Novavax, one of the front-runners in the race to develop a Covid-19 vaccine, will receive $1.6 billion from the federal government, the biggest contribution yet from the Operation Warp Speed program. The funds will allow the company to conduct advanced human studies and establish manufacturing to deliver 100 million doses as soon as late 2020, Maryland-based Novavax said in a statement. James Paton has more.

Medicaid Insurers See Growth Amid Pandemic: Efforts by federal lawmakers and states to reduce the number of people being kicked off Medicaid during the Covid-19 pandemic are playing a big role in the program’s growth in enrollment, insurers claim. Insurers like Anthem that operate Medicaid managed care plans point to a provision in the Families First Coronavirus Relief Act (Public Law 116-127) that forces states to keep beneficiaries on the rolls during the public health crisis. Read more from Sara Hansard.

More on Research & Treatments:

• Trump Touting Hydroxychloroquine Again Despite FDA Warning
• Antibody Therapies Take the Spotlight as ‘Plan B’ for Covid-19
• Gene Region Found That May Boost Virus Susceptibility in Men
• Glaxo Teams With Philip Morris-Backed Biotech on Covid Vaccine
• WHO Sending Mission to China to Study Virus’ Animal Origins
• FDA Gives Emergency Approval for Assure Igg/IGM Rapid Test

What Else to Know Today

Tennessee Doubts Provider’s Standing in Abortion Case: Abortion providers may not sue states over laws that allegedly infringe patients’ rights to terminate pregnancies before viability, Tennessee said in response to pleadings contesting the state’s new gestational age and “reason” abortion restrictions.

The Supreme Court’s recent ruling that a Louisiana abortion provider had third-party standing to challenge a law that forced doctors who perform abortions to have admitting privileges at local hospitals didn’t control this lawsuit because it was based upon a conclusion that Louisiana had waived the standing argument, Tennessee argued to the U.S. District Court for the Middle District of Tennessee. Read more from Mary Anne Pazanowski.

More Headlines:

• FDA Approves At-Home Therapy for Rare Blood Cancers
• ViiV’s Injectable Anti-HIV Drug Beats Gilead’s Truvada, NIH Says
• HHS Not Bound by Medicare Administrative Law Judge Decision
• Philip Morris Allowed to Say IQOS Reduces Harmful Exposure
• Moda Health Gets $249 Million for Obamacare Risk Corridor Loss
• Aclaris Submits New Drug Application to FDA
• FDA Clears Endo Bonds Cellulite Treatment

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

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