Insights^

Schumer, Manchin Reach Deal on Sweeping Reconciliation Bill

On Wednesday, Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) surprised the political world by announcing they had reached a deal on a new reconciliation bill with provisions to fight climate change, reform the tax code, and extend the enhanced Affordable Care Act (ACA) premium subsidies for three years.  Known as the Inflation Reduction Act, the measure would raise over $700 billion by establishing a 15% corporate minimum tax and allowing Medicare to negotiate  drug prices, among other items.  The bill would also invest nearly $369 billion in a host of clean energy and climate-related programs, including a new $4,000 tax credit for the purchase of used electric and hybrid vehicles.

CMS Announces Maternity Care Action Plan, Extends Postpartum Coverage

The Centers for Medicare and Medicaid Services (CMS) laid out a new Maternity Care Action Plan on Tuesday that aims to encourage health care industry stakeholders like hospitals and insurance companies to consider key commitments on improving maternal health outcomes.  The action plan is a part of the Biden administration’s overall effort to improve health outcomes and reduce disparities for mothers and infants.  Additionally, CMS approved the extension of 12 months of postpartum coverage under Medicaid and the Children’s Health Insurance Program (CHIP) in Connecticut, Massachusetts, and Kansas.  The extension is estimated to apply to 19,000 people in each of these states, bringing the total number of people eligible for 12 months of postpartum coverage nationwide to 284,000.

W&M Advances Bill to Streamline Prior Authorization

On Wednesday, the House Ways and Means Committee voted unanimously to advance H.R. 8487, the Improving Timely Access to Care Act of 2022.  This bipartisan legislation would modernize the way Medicare Advantage and health plans use prior authorization by establishing an electronic prior authorization process and creating a process for real-time decisions for services and items that are routinely approved.  Backed by both payer and provider organizations, the bill is expected to be brought to consideration on the House floor this fall after lawmakers return from August recess.   The Senate version of the Improving Seniors’ Timely Access to Care Act (S. 3018) has been referred to the Finance Committee, although it is unknown when the committee will take up the bill.

KFF: Vaccination Rates for Kids under 5 Remain Low

Only 7% of parents of children ages 6 months to 5 years have gotten their kids vaccinated against COVID-19, according to the latest survey data from the Kaiser Family Foundation (KFF).  Unfortunately, the survey data suggests that the number of young, vaccinated children is not expected to rise significantly due to varying degrees of hesitancy among parents.  About 43% of parents surveyed said they will “definitely not” get their kids vaccinated, while 27% are opting for a “wait and see” approach.  The survey noted some partisan differences, as Republican-leaning parents were three times as likely as Democratic parents to say they will “definitely not” get their kids vaccinated.  Additionally, the survey found that 81% of parents who have yet to get their children vaccinated are worried about the side effects or long-term effects of vaccines.

ICYMI: “The Office” Fans Can Experience Dunder Mifflin in DC

Fans of the hit mockumentary sitcom “The Office” can experience their favorite TV series in a new live exhibit that opened Thursday in downtown DC.  According to the website for The Office Experience, visitors can explore 17 different areas that feature set recreations and original costumes and props from the show.  The exhibit was created by the same company that put together the FRIENDS Experience in DC, which closed back in June.  Fans will be able to view The Office Experience through January 16, 2023.

Odds of September CR Increase

Senate Appropriations Committee Ranking Member Richard Shelby (R-AL) said bicameral appropriators aren’t likely to agree on topline Fiscal Year (FY) 2023 spending levels until after the midterm election in November, meaning Congress will probably have to pass a continuing resolution (CR) to ensure government funding beyond the current deadline of September 30.  To date, the Senate has yet to introduce any appropriations bills, while the House is much further along in the process, having passed a six-bill minibus on Tuesday.

Launch of 988 Deemed a Success

Secretary of Health and Human Services (HHS) Xavier Becerra touted last Saturday’s rollout of the new 988 national suicide hotline number a success, with the hotline seeing a 60% jump in calls compared to the previous weekend for the National Suicide Prevention Lifeline.  The administration has spent over $430 million to help states prepare for higher call volumes by hiring more mental and behavioral health counselors to take calls.  Meanwhile, Congress is working on its own proposals to boost access to mental health care services.  In particular, the Senate Finance Committee is set to release legislation that would expand the behavioral health care workforce and allow the integration of mental and primary health care.

Advocates Call for More Government Action on Long COVID     

The federal government really needs to step up its work on addressing long COVID, according to health care providers and patients who testified before a House Oversight and Reform Select Subcommittee on the Coronavirus Crisis hearing on Tuesday.  Some of the reforms witnesses called for include paid medical leave for patients, enhanced access to disability benefits, and more support for long COVID clinics.  During the hearing, Subcommittee Chairman James Clyburn (D-SC) stressed that more research is needed to understand the causes, risk factors, and effects of long COVID.  Witnesses also discussed the economic impact of long COVID, such as patients leaving the workforce.

Senate Weighs in on Reforms to Electoral College

A pair of bipartisan Senate bills aim to reform the Electoral Count Act of 1887, which controls the acceptance of presidential votes.  One proposal would increase the threshold to one-fifth of the members of the House and the Senate to object to the election results. Currently, only a single member of the House and Senate can object to a state’s Electoral College votes.  Another bill would increase the maximum penalty for people convicted of intimidating or threatening candidates, voters, and election officials to two years and make tampering with voting systems a federal crime.  Sen. Susan Collins (R-ME) has said that she hopes both bills can be signed into law by the end of the year.

ICYMI: 8 House Offices Are Unionizing

Eight House Democrat offices filed petitions to form unions after a new rule went into effect to allow legislative branch employees to unionize.  Relatively low pay as well as cases of harassment and burnout are among the reasons why staff have long been pushing for the right to organize on the Hill over the past few years.  Now, staff in the eight Democratic offices must wait on the Office of Congressional Workplace Rights to review the petitions before they can hold a secret ballot election to ultimately decide on unionizing.

September 30, 2022.  That’s the date the Food and Drug Administration’s (FDA) user fee programs for drug products and medical devices are set to expire.  Given the “must-pass” nature of user fee reauthorization, lawmakers and FDA stakeholders are using this moment to advance other FDA-related reforms pertaining to the accelerated approval process, promoting clinical trial diversity, competition in drug markets, and other areas.  While the House and Senate user fee packages are fundamentally similar, there are some differences between the two.  For instance, the Senate package includes policies related to dietary supplements, diagnostic labs, and cosmetics; the House does not.  Given the differences between the packages and the pressure to get a signed bill before the August recess, stakeholders would be keen to watch the legislative process unfold.

A Brief History of the FDA User Fee Process

Enacted in 1992, the Prescription Drug User Fee Act (PDUFA) authorized the FDA to collect user fees from companies that submit applications for drug products.  Since then, Congress has added additional user fee programs for other products like medical devices, generic drugs, and biosimilars.  Congress reauthorizes user fee bills every five years, and the reauthorization process marks an important opportunity for lawmakers to consider FDA-related policies as well as overall FDA performance.

Since FDA depends on user fees to operate, failure to reauthorize user fee programs would catastrophically disrupt FDA operations by triggering massive layoffs of career staff who review new drugs and devices and monitor drug safety.   As a result, the timelines for new drug products to reach patients and providers would increase exponentially.

Although current authority for the user fee programs expires at the end of Fiscal Year (FY) 2022, Congress typically passes reauthorization bills in the summer preceding the September deadline to avoid disrupting FDA operations. With that in mind, the House and Senate are on the clock to pass a legislative package over the next couple of months before the FDA starts handing out pink slips.

What’s in the House and Senate Bills?

The House Energy and Commerce Committee and the Senate Health, Education, Labor, and Pensions (HELP) Committee have already released their own respective user fee reauthorization bills that would reauthorize fees that drugs, biosimilars, and medical device companies must pay the agency for review of their products.  Both bills appear to move forward with fee levels that were negotiated between FDA and industry groups prior to their release.

Additionally, both bills set out to reform the FDA’s accelerated approval program, which allow the agency to approve drugs more quickly for serious conditions that fill an unmet medical need.  In exchange, drug manufacturers must complete post-approval trials to confirm those clinical benefits – something the FDA has not consistently ensured.

Both the House and Senate bills would allow the FDA to require manufacturers to start post-approval studies prior to accelerated approvals, give the FDA more control over study design and deadlines, and create a mechanism for the agency to pull drugs off the market.  The bills also would clarify that post-approval studies could rely on real-world evidence (RWE) to confirm that drugs are effective.  Notably, the Senate bill differs from the House bill in that it would create an interagency coordinating council that would periodically review accelerated approvals.

Additionally, both bills set out to promote drug competition through better access to generic and biosimilar drugs, albeit through different paths.  For instance, the House bill contains provisions that would streamline the generic approval process in certain types of cases, while the Senate bill addresses exclusivity for interchangeable biosimilar products.

Outside of fee proposals, changes to the accelerated approval process, and access to generic and biosimilar drugs, both bills contain several notable differences.  For example, the House bill includes provisions aimed at improving diversity in clinical trials by requiring trial sponsors to submit diversity action plans with details on how the sponsors intend to enroll a diverse group of trial participants.  Other provisions would require the FDA to submit reports on diversity action plans and to hold public workshops on improving trial diversity. While the Senate bill does not contain such a provision, another Senate HELP Committee-approved bipartisan bill, the PREVENT Pandemics Act, does include policy intended to promote clinical trial diversity.

Among the Senate’s user fee package proposals are provisions that would enhance the regulation of laboratory-developed tests (LDTs) by allowing the FDA to regulate LDTs based on the level of risk associated with them, similar to how the agency regulates medical devices.  The Senate bill would also expand the FDA’s ability to regulate dietary products by requiring dietary supplement companies to list their products with the agency, which would theoretically improve the FDA’s ability to enforce consumer protections.  Furthermore, the Senate bill contains a slew of provisions aimed at boosting regulation of cosmetics.  These include requirements for cosmetics manufacturers to register their products with the FDA, new labeling requirements, and the establishment of good manufacturing practice regulations.

What Comes Next?

The House Energy and Commerce Committee voted in favor of its user fee package in the Health Subcommittee on May 11 and the full committee on May 18 with a vote on the House floor scheduled for June 7.   Over in the Senate, the HELP Committee is scheduled to mark up its user fee package on June 14, along with legislation to improve access to mobile health clinics.

Congress has always addressed the user fee reauthorization legislation ahead of the expiration deadline (September 30), and leaders from both House and Senate committees with jurisdiction over the FDA have publicly stated that they don’t want to hold up the reauthorization process.  However, substantive differences between the House and Senate versions of the reauthorization bill combined with a highly partisan climate have the potential make passing user fee legislation more difficult than in previous years.

Additionally, the Senate HELP Committee has also voted in favor of its PREVENT Pandemics Act, another top priority of Chair Patty Murray (D-WA) and Ranking Member Richard Burr (R-NC), who is retiring at the end of this year, for enactment.  Likewise, a priority of House Energy and Commerce Health Subcommittee Chair Anna Eshoo (D-CA) will be enactment of her bipartisan House legislation creating the Advanced Research Project Agency for Health (ARPA-H).  It remains unclear if/how these policy priorities and user fee reauthorization packages will come together and form one bill to be signed by the President before the expiration of the current user fee programs. As the summer unfolds, stakeholders would keen to monitor the reconciliation process to see which provisions and changes make it into the final reauthorization bill.

House and Senate appropriators are poised to introduce their Fiscal Year (FY) 2023 spending bills, kicking off weeks and months of negotiations and hearings.   The FY 2023 appropriations cycle notably follows a lengthy FY 2022 cycle that wasn’t resolved until March 2022.  As lawmakers grapple with the midterm elections, retirements, and economic concerns in the coming months, how likely will the new appropriations cycle spill over into the next calendar year?

What We Currently Know

So far, top congressional appropriators are saying they want FY 2023 appropriations to wrap up in the current calendar year.  In a March 31 hearing, House Appropriations Committee Chairwoman Rosa DeLauro (D-CT) expressed a desire to pass all appropriations bills “on time” so they can be signed into law by September 30, 2022.  But her Republican counterpart, Ranking Member Tom Cole (R-OK), had a more sobering take, saying Congress is unlikely to finish its work on FY 2023 appropriations until the end of the current calendar year.

There are only a handful of other indications as to how the FY 2023 appropriations cycle will pan out.  On April 28, Democratic and Republican leaders of the House and Senate Appropriations committees met to discuss topline spending levels for FY 2023.  While it remains to be seen what came out of the meeting, the dollar figures each side offers will indicate how contentious appropriations negotiations might shape out to be this summer.  For instance, the administration proposed a $1.6 trillion budget for FY 2023, with funding allocations roughly equally divided between defense and non-defense spending.  If Democrats start their negotiations with the president’s budget request, their push is likely to fall flat, as Republicans and some centrist Democrats have been eager for more defense spending.

There aren’t many more details about timelines, either.  In the House, the Appropriations subcommittees are reportedly expected to markup their 12 spending bills between June 13 and June 22, with the full committee to follow its markups from June 22 through June 30.  However, all dates are currently tentative, and the committee won’t confirm official dates until a final notice is sent out.

The Senate Appropriations Committee has yet to announce its own tentative timeline, although Senate appropriations hearings always follow appropriations hearings in the House.  This means subcommittee and full committee markups in the Senate will probably be scheduled throughout July and August.

Which Factors Will Impact FY 2023 Appropriations?

Unfortunately for lawmakers, they’re heading into a new appropriations cycle with many distractions and extenuating circumstances that don’t often come together all at once.  Here are some key factors that will determine whether lawmakers will wrap up the new appropriations cycle before 2022 ends

The Midterm Elections

A “wave” election that could likely see control of the House shift from one party to another is typically a strong indicator of a long appropriations season.  Due to both historical trends and President Joe Biden’s low approval ratings, Republicans are generally favored to regain a majority in the House in the 2022 midterm election this November.  The closest comparison to the 2022 election so far is 2010, when low approval ratings over the Obama administration’s handling of the economy helped flip 63 House seats to the GOP, causing the Democrats to lose control of the chamber.  As a result, Congress didn’t finalize FY 2011 spending bills until March 2011.  2018 saw another wave election, with then-President Donald Trump’s unpopularity supercharging Democratic turnout to help the party flip 41 seats, allowing Democrats to retake the House.  If 2010 and 2018 are any indication, a long FY 2023 appropriations season is likely to coincide with the 2022 midterm elections.

Retirements of Top Appropriators

Some of the current lawmakers who won’t be on the ballot for the 2022 midterm elections include Senate Appropriations Committee Chairman Patrick Leahy (D-VT) and Ranking Member Richard Shelby (R-AL), who will both be retiring at the end of the 117^th Congress.  Their pending retirements might incentivize both to reach deals on spending bills sooner rather than later.   Additionally, Sen. Susan Collins (R-ME), who is widely favored to replace Shelby as the Appropriation Committee’s top Republican, has indicated she’d prefer finishing FY 2023 appropriations in 2022 to ensure she can start the new Congress “with a clean slate.”

Inflation

Inflation is at a 40-year high, which could spur lawmakers to reach a final agreement on FY 2023 sooner instead of relying on a series of continuing resolutions (CRs) into next year.  When inflation is at a more typical level like 2% per year, federal agencies can generally make do under a CR and find money in their budgets to ensure there are no interruptions in services or operations.  However, if inflation persists near its current level of 8.5% through September, agencies will have a difficult time operating under a CR as they struggle to accommodate rising prices with budgets frozen at FY 2022 levels.

With a mix of incentives for and against reaching a budget deal, it’s hard to say when a final FY 2023 spending agreement will be signed into law.  However, election season is busy enough for lawmakers, and with a historic and contention midterm election season almost in full swing, there’s little likelihood Congress will reach an agreement on appropriations before Election Day on November 8.