What to Know in Washington: When Drugs Make News, Trump Reacts

Staffers at the Department of Health and Human Services have gotten used to a pattern: President Donald Trump sees a news report on spikes in prescription-drug list prices, Secretary Alex Azar is called to a meeting in the Oval Office, and a policy in the discussion stage gets accelerated and pushed out the door.

It’s happened at least three times, each within a week after Trump heard a news report about drug prices. Each meeting led to the public release of a proposal shortly afterward. In one instance, Trump took the highly unusual step of attending the announcement of a proposed rule.

While it’s no secret Trump has been focused on lowering drug prices, the level of his hands-on involvement—described by two former administration officials familiar with the pattern—demonstrates his fixation on the issue even as he constantly changes positions and priorities on other issues. This means that drug companies may need to be conscious that they can’t sneak in price increases because they’re likely to lead to more regulations for their industry.

Trump “thinks about governing the way he thought about running his company,” Christopher Holt, director of health-care policy at the center-right think tank American Action Forum, said. The president thinks the U.S. should be able to leverage its market power of Medicare beneficiaries to get good prices, but he sees other countries getting better deals and “equates that to losing,” Holt said. “Anytime he sees a story” about drug companies raising their prices, “he’s going to react to that.”

Trump is preoccupied with drug prices because he’s “following the polls, and consumers are fixated on it,” said Wayne Winegarden, a senior fellow at the San Francisco-based free-market think tank Pacific Research Institute. Drug prices are one of the most visible parts of the health-care system, and patients interact with it more, so it’s top-of-mind. Read more from Shira Stein and Madison Alder.

Canada Plan Needs Pharma’s Help: One of the White House’s proposals to lower U.S. drug costs include allowing cheaper Canadian drug imports, but the plan overlooks a crucial fact: it can’t happen without the cooperation of major drugmakers, the very industry the president wants to undercut.

Even as alarm grows in Canada over prospects of Americans draining their supply of medicines, there’s little reason to think the U.S. proposal would worsen the country’s drug shortages. But that fear plays into the hands of powerful drugmakers seeking to protect their U.S. profit margins. Read more from Natalie Obiko Pearson and Simran Jagdev.

Novartis Pressured on Drug Data: Meanwhile, Senate Finance Chairman Chuck Grassley (R-Iowa) sent a letter to Novartis CEO Vas Narasimhan requesting any documents related to the withholding of data for its drug, Zolgensma, from the Food and Drug Administration and to its internal inquiry into data manipulation for the medication. AveXis, a Novartis unit that developed a breakthrough gene therapy, knew about potential manipulation of animal testing data but failed to disclose it to U.S. regulators before the treatment was approved, the FDA said.

Grassley said he wants documents to “better understand the decision-making process that led to the intentional withholding of important information from the FDA,” asking the drugmaker to supply the information by Aug. 23, Giovanna Bellotti Azevedo reports.

On Lawmakers’ Radars

Spending Boost May Lower GNP: Holding the national federal debt to its recent historical average would boost gross national product in coming decades, while a spending boost under the recently-enacted budget law may help slow growth, according to a Congressional Budget Office projection included in a letter to the ranking member of the House Budget Committee, Steve Womack (R-Ark.). GNP would increase to $37 trillion in 2049 from $22 trillion in 2019 based on U.S. law before Trump signed the budget and debt limit bill on Aug. 2, according to the CBO.

Based on current policies, including likely gradual increases in spending, GNP will be about 3.6% lower than the $37 trillion figure, the CBO said. The new law lifted spending caps through fiscal 2021, the last year they are in effect. If debt falls to 42% of gross national product, which is the 50-year average, GNP would be 5.8% higher than the $37 trillion estimate, the CBO said. If debt stays at the estimated 2019 level of 78% of GDP, GNP would be 3.7% higher, Jack Fitzpatrick reports.

Nadler, Collins Want Epstein Death Info: The House Judiciary Committee’s top Democrat and Republican said yesterday that they want answers from the U.S. Bureau of Prisons about Jeffrey Epstein’s death, including information about the individual correctional officers responsible for surveiling the billionaire financier and whether there were any video cameras in operation by his cell. Epstein, who faced federal charges of molesting teenage girls and sex trafficking, died in an apparent suicide while in a federal jail in Lower Manhattan.

“Did they indicate, or do recordings show, the circumstances that led to Mr. Epstein’s death, or the presence of any other person during this time period?” Chairman Jerrold Nadler (D-N.Y.) and ranking member Doug Collins (R-Ga.) wrote in a letter. The pair also asked for confirmation that Epstein had been placed on suicide watch and about who ordered the termination of that protocol. They asked for answers by Aug. 21. Read more from Chris Strohm and Chris Dolmetsch.

Democrats Probe Labor Board: House Democrats asked the U.S. labor board’s top lawyer to turn over information and documents on his handling of cases, saying they’re concerned he’s deviated from federal labor law’s stated purpose to promote collective bargaining. The lawmakers sent National Labor Relations Board General Counsel Peter Robba wide-ranging request yesterday, related to changes he’s made to the office that prosecutes unfair labor practice cases and represents the board in court proceedings. Materials sought include information on processing unfair labor practice charges, modifications to the office’s legal positions, and evidence used to justify increased efforts to police unions. Read more from Robert Lafolla.

Democrats Query Bezos on Amazon Choice Policy: Two Senate Democrats question Amazon CEO Jeff Bezos about how his company applies the “Amazon Choice” label and whether the recommendation function could be misleading customers into buying products of “inferior quality.” In a letter yesterday, Sens. Bob Menendez (D-N.J.) and Richard Blumenthal (D-Conn.) asked Bezos to answer a series of questions on how Amazon determines the labeling of “Amazon Choice” products and whether or not an algorithm is used to make these decisions, Giovanna Bellotti Azevedo reports.

Student Data Collection Concerns: Sens. Blumenthal, Dick Durbin (D-Ill.), and Ed Markey (D-Mass.) sent letters to technology companies offering education-related services, including Google and Facebook, to raise concerns over data collection practices for American students. “We urge you to make a clear commitment to transparency for the children and young adults who use your products,” the senators said, asking the tech companies to adopt comprehensive data privacy policies that ensures they are “directly obtaining informed consent from parents and students.” They also raised the concerns to data brokers, Ben Livesey reports.

Around the Administration

Trump Travels to Pennsylvania: Trump travels to Pennsylvania’s Rust Belt today, where he is expected to talk about economic revitalization in the key swing state, Ari Natter reports. Trump will appear at a $6 billion chemical production facility nearing completion in Monaca, about 30 miles northwest of Pittsburgh. The facility, owned by a subsidiary of Royal Dutch Shell, will use natural gas liquids to annually produce 1.6 million tons of ethylene, which is used in the production of plastics and other products.

The visit comes as the Trump administration has proposed turning the natural gas-rich Appalachian region into a hub for petrochemical refining as a way to help local workers hurt by a downturn in coal mining. Pennsylvania is one of the must-win states for Democrats who hope to unseat Trump in 2020.

Trump Plan Calls for Flexibility in AI Standards: A new national artificial intelligence strategy recommends that federal agencies work together to develop standards and public-private partnerships to ensure U.S. leadership as the technologies continue to evolve. The National Institute of Standards and Technology’s final plan for developing AI technical standards could affect how agencies approach the use of AI, including driverless vehicles such as Waymo’s automated car, and facial recognition systems like Amazon’s Rekognition.

“We look at trustworthiness, accuracy, reliability and safety,” Lynne Parker, the assistant director of artificial intelligence at the White House’s Office of Science and Technology Policy, said in a phone interview about the technical standards guidance that was released yesterday. “All of these are characteristics that we want our AI technologies to have and technical standards can help us do that in a consistent way that fosters innovation,” Parker said. Read more from Rebecca Kern.

ICE at Doors of Firms Hiring Foreign Students: U.S. Immigration and Customs Enforcement agents are visiting workplaces to check employers’ compliance with a government program that allows foreign students to work in the country after graduation. Some attorneys are concerned the move could further limit legal immigration for skilled workers, especially the tech-savvy students eligible to work an extra year under the program, known as Optional Practical Training. The compliance checks are “within their authority,” but ICE’s exercise of that authority has been “very recent,” said Karine Wenger of the immigration law firm Fragomen, Del Rey, Bernsen & Loewy in San Diego. “It looked like we were the guinea pigs” when her clients first got notice of the visits in early July, she said. Read more from Laura D. Francis.

‘Public Charge’ Rule Could Cost Hospitals: A final version of a rule that counts Medicaid eligibility against immigrants seeking green cards is already costing health-care providers. The addition of new categories that immigration officials can weigh when looking at green card applications “might result in reduced revenues for healthcare providers participating in Medicaid, companies that manufacture medical supplies or pharmaceuticals,” the final rule from the Department of Homeland Security states. Read more from Sam McQuillan.

Border Agency’s Facial Recognition Tech: U.S. Customs and Border Protection will expand its use of facial recognition, deploying the controversial technology to screen people entering the country, according to a government document released recently. The draft request for bids lays out the CBP’s plans to upgrade a wide range of its technical systems. That includes a goal to replace an existing “token-based” security system, reliant on verification methods like passwords, with a biometric one, which uses inputs like fingerprint and face scans to identify people. Read more from Mark Bergen and Chris Cornillie.

Trump’s Twitter Threat Sparked Remittance Boom: Trump’s threat to impose remittance taxes and tariffs on Guatemala last month helped boost remittances sent to the country to the second-highest monthly total on record. Guatemalans living mostly in the U.S. sent home $948 million in July, up 15.8% from last year. Guatemala Central bank President Sergio Recinos said Trump’s threat prompted Guatemalans in the U.S. to send home money ahead of any possible new taxes. The bank has since revised up their projection for 2019 remittance growth to a ran ge of 9.5% to 12.5%, from 7.5% to 10.5% previously, he said. Read more from Michael McDonald.

Movers & Shakeups

NHTSA’s Deputy Head to Resign: Heidi King, who was nominated to head the National Highway Traffic Safety Administration but didn’t receive a confirmation vote of the full Senate, will resign from the agency effective Aug. 31, the Transportation Department said in an emailed statement. King was appointed as deputy administrator in 2017. James Owens, DOT’s deputy general counsel, was named as her replacement and will serve as acting NHTSA administrator. Steven Bradbury, DOT’s general counsel, has been named acting deputy secretary of the DOT, in addition to his current role, Ryan Beene reports.

Huawei Hires Trade Lobbyists: Huawei Technologies hired the law firm Sidley Austin to lobby on trade as the U.S. pressures allies to join it in blacklisting the Chinese telecom giant and the company finds itself increasingly mired in Trump’s trade war with Beijing. The lobbying, which began in July, will focus on export controls, trade sanctions “and other national security-related topics,” according to a disclosure filed with the Senate.

The document shows that Huawei is deepening its ties to Sidley Austin, which is already working on the tech company’s legal challenges in the U.S., while also ramping up its lobbying presence. Huawei, which is under an existential threat after the Trump administration blocked it from buying American technology over national-security concerns, has been drawn into the latest escalation of Trump’s trade war. Read more from Ben Brody.

What Else to Know

Sanders Eyes Repeat N.H. Win: Sen. Bernie Sanders (I-Vt.) began his two-day swing through New Hampshire by asking voters there to show the same support for his progressive agenda as they did in 2016, pitching himself as the trailblazer of the top issues in the Democratic Party. “I laid out an agenda that the establishment said was an extreme agenda,” Sanders said during a town hall in North Conway, N.H. “The people of this state said that agenda makes sense to us. When the people speak, an idea that once seemed radical, turns out not to be quite so radical.” Sanders won the 2016 primary against Hillary Clinton with 60% of the vote, Misyrlena Egkolfopoulou reports.

Weigh Climate in Land Management, U.N. Says: A recent United Nations report highlighted the need for the U.S. to manage its public lands with climate change in mind, scientists said. That could mean using prescribed burns to help reduce the risk of catastrophic wildfire, the scientists said. One also said it could mean investing heavily in planting trees in areas of deeply scorched earth following catastrophic wildfires. The report from the Intergovernmental Panel on Climate Change, emphasized that forests across the globe are essential to storing carbon dioxide and stabilizing ecosystems as the planet warms. Read more from Bobby Magill.

Iran Guards Warns of Israeli Presence in Gulf: Iran warned Israel and the U.S. against any “illegal presence” in the Persian Gulf and said the Islamic Republic would guarantee the region’s security as long as it is able to export oil. Trade through the Strait of Hormuz continues without disruption and is “open for everyone to use for oil exports,” Rear Admiral Alireza Tangsiri, commander of the Iran’s Revolutionary Guards Corp’s naval forces, was cited as saying by the semi-official Iranian Students’ News Agency. The navy’s fleet is responsible for maintaining security in the waterway, he said, Arsalan Shahla reports.

NRA Wins First Round Over L.A. Law: A federal judge in Los Angeles rejected the city’s request to throw out a National Rifle Association lawsuit challenging a new law that requires contractors to disclose business ties to the organization. The NRA says the law violates its First Amendment rights to free speech and association by discriminating against the group over its viewpoints and trying to freeze out its corporate supporters. U.S. District Judge Stephen Wilson yesterday rejected the city’s argument that contractors’ involvement with the NRA, such as offering discounts, isn’t “expressive” within the meaning of the First Amendment. Read more from Erik Larson.

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; Loren Duggan at lduggan@bgov.com