HEALTH CARE BRIEFING: U.S. Probe of Texas Transgender Rule Looms

The Biden administration has just two options to stop Texas from investigating families for child abuse if they are suspected of seeking gender-affirming care for transgender children—pulling federal health funding or suing the state.

Attorneys say both options are likely being discussed at the Departments of Justice and Health and Human Services, especially in light of strong statements and guidance opposing the state’s actions by President Joe Biden and his agencies March 2.

A Texas judge last week issued an injunction against the state’s child protective services agency, temporarily blocking it from investigating the parents of a transgender minor for alleged child abuse. Opponents of the Texas policy are waiting for more federal actions. New York Attorney General Letitia James called on the Justice Department on Wednesday to investigate Texas Gov. Greg Abbott’s policy.

Advocates and former HHS officials said the likely approach for the White House is an HHS or DOJ investigation and possible DOJ involvement in the ongoing litigation. Withdrawal of federal health funds for an entire state agency is possible, but it would be a “nuclear option,” said Leon Rodriguez, who ran the HHS’s Office of Civil Rights under President Barack Obama. He’s now a partner as Seyfarth Shaw.

The OCR enforces Section 1557 of the Affordable Care Act, which “prohibits discrimination on the basis of race, color, national origin, sex, age, and disability in covered health programs.” It normally handles complaints about actions of individual health providers or hospitals. It rarely uses its enforcement authority against an entire state’s policy. “Short of litigating or initiating funding removal or withdrawal proceedings, there’s not a whole lot in their toolkit,” said Joseph Wardenski, a former DOJ civil rights attorney.

A supporter of Texas’s authority said that the Biden administration is going too far by including transgender issues in the ACA’s non-discrimination clause. “I see no basis for them to be able to enforce Section 1557 against any state by reinterpreting sex to cover something that is not in the statute, which is what it sounds like they’re trying to,” Roger Severino, director of the OCR for the Trump administration, said. Read more from Shira Stein.

• Related: Apple, Google and Microsoft Oppose Texas Order on LGBT Youth

Happening on the Hill

U.S. Senate Passes $1.5 Trillion Funding Bill: The Senate passed a full year $1.5 trillion federal funding bill that wards off a possible government shutdown. The measure, which passed the House Wednesday, now heads to President Joe Biden’s desk for his signature, Erik Wasson reports.

House members dropped a $15.6 billion coronavirus relief supplemental from the package earlier this week over disagreements on how to offset its cost. House Democrats aim to pass a bill with those funds next week, according to Majority Leader Steny Hoyer‘s (D-Md.) office, Jack Fitzpatrick reports.

But a deal with Republicans on the measure to ensure Senate passage remains unclear. Sen. Roy Blunt (R-Mo.), ranking member of the Senate Appropriations Labor-HHS-Education Subcommittee, said he expects lawmakers to strike an agreement on offsets, but that trying to attach the measure to the omnibus was risky. “We’ll just have to look at it when we get back,” Blunt told reporters yesterday. “And I’m for doing it. We’ll figure out how to do it.”

Meanwhile, the White House pressing lawmakers for more money for Covid-19 medicines, vaccines and testing, Alex Ruoff reports. “Without additional resources from Congress, the results are dire,” White House Spokeswoman Jen Psaki said Thursday.

Murray, Burr Introduce ARPA-H Act: The Democratic and Republican leaders of a key Senate health committee released a long-awaited bill to authorize the creation of Biden’s proposed new biomedical research agency, Alex Ruoff reports.

Under the legislation, ARPA-H would be a part of the National Institutes of Health, unlike legislation introduced by a key House Democrat that would place the new research body elsewhere in the Department of Health and Human Services.

One surprising aspect of this bill: while ARPA-H would be an entity of NIH, this legislation would not allow it be headquartered in Washington, D.C. or NIH’s campus in Bethesda, Md. The bill explicitly states the new research facility cannot be located “inside of, or in close proximity to, the National Capital region, and shall not be located on any part of the National Institutes of Health campuses.” Read the bill text here.

The omnibus released this week includes $1 billion to launch ARPA-H, Senate Health, Education, Labor, and Pensions Chair, Senator Patty Murray (D-Wash.) and ranking member Richard Burr (R-N.C.) said in their announcement.

• Earlier: Pandemic Readiness Bill Leaves Out Biden’s Biomedical Incubator

Grassley Wants FTC Probe Into Pharmacy Liaisons: Sen. Chuck Grassley (R-Iowa) said the Federal Trade Commission should investigate the entities that manage prescription drug coverage for insurers after a proposed study failed to get enough support last month. Grassley, ranking member of the Senate Judiciary Committee, wrote in a letter to FTC Chair Lina Khan that there is “widespread bipartisan support for examining” pharmacy benefit managers and “whether they are causing Americans to pay higher prices for prescription drugs.” Read more from Celine Castronuovo.

More Headlines:

• GOP Lawmakers Appeal Dismissal of House Mask Mandate Challenge

The Coronavirus Pandemic

Mask Rule Extended Into April: The Biden administration is planning to extend a requirement for U.S. airline, , train and other transit travelers to wear masks to April 18, while working on a policy about how and when to roll back the rule, according to officials familiar with the matter. During the weeks ahead, the Centers for Disease Control and Prevention will work on a revised policy for when, and how, mask rules should be eased on public transportation corridors, one of the officials said.

Ahead of the anticipated announcement, dozens of Republican senators yesterday signed a letter to Biden calling the restrictions “increasingly unnecessary” and asking for them to be immediately reduced or eliminated. Read more from Josh Wingrove.

More Headlines:

• Pfizer Agrees to Supply Africa CDC with Covid Pill Paxlovid
• Thousands of Covid-Related EEOC Charges Allege Disability Bias
• Third Court Rejects Federal Forum for Coronavirus Death Lawsuits

What Else to Know Today

Medicare Mulls Point-of-Sale Changes for Drugs: A Medicare proposal aimed at lowering out-of-pocket drug costs stops short of requiring that all discounts reach consumers at the pharmacy counter, industry groups say. The proposed rule mandates that Medicare Part D plans apply all “price concessions” they receive from pharmacies to the final cost. But it wouldn’t make sure the rebates that manufacturers pay to insurers and pharmacy middlemen also apply at the point of sale. Critics argue those rebates are shrouded in secrecy and have ultimately led to higher initial list prices. Read more from Celine Castronuovo.

Mylan Entities Trimmed From Infringement Suit: Various Mylan entities won release from a patent infringement suit related to the drugmaker’s intention to sell a generic drug to treat constipation and irritable bowel syndrome because they didn’t take any steps toward marketing it, a federal court in New Jersey said. Brand-name drugmakers Bausch Health Ireland and Salix can sue only Mylan Pharmaceuticals, since it’s the only entity seeking the Food and Drug Administration’s approval to sell a generic version of a patented drug, the U.S. District Court for the District of New Jersey said. Mary Anne Pazanowski has more.

Abortion Provider’s Right to Sue Needs Redo, S.C. Says: South Carolina asked the full Fourth Circuit to rehear arguments supporting its bid to stop an abortion provider from suing it over a law that bans most abortions at about six weeks. Planned Parenthood South Atlantic can directly sue the state to invalidate a series of South Carolina provisions regulating abortion, a three-judge panel said in February. That decision was wrong, the state told the U.S. Court of Appeals for the Fourth Circuit on Tuesday in a petition for en banc review. Read more from Mary Anne Pazanowski.

More Headlines:

• Transgender Minor Loses Bid for Medicaid-Covered Chest Surgery
• McKesson Blocks Effort to Reinstate Opioid Security Fraud Lawsuit
• Apotex Fails to Win Review of Patent for Movement Disorder Drug
• Federal Circuit Rejects Boston Scientific Patent Validity Claims

With assistance from Alex Ruoff and Jack Fitzpatrick

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; Michaela Ross at mross@bgov.com