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Washington Report: Health Care Issues Take Center Stage in the Nation’s Capital

Member Update
Jul 30, 2020

The Trump Administration and the US Congress are trying to address several pressing issues before they leave Washington, DC for the August summer recess and hit the campaign trail. Health care issues are front and center in the legislative and regulatory arenas and there are a number of issues on which to report, including drug pricing and COVID-19 relief packages

Trump Administration Issues Executive Orders on Drug Pricing

President Trump signed four executive orders aimed at pursuing lower drug costs, which was a prominent theme of his health care agenda from the 2016 campaign. The executive orders direct the Department of Health and Human Services (HHS) to take actions that will:

  1. Require federal community health centers that purchase insulin and epinephrine through the 340B drug program to pass the savings from discounted drug prices to medically underserved patients.
  2. Allow states to import prescription drugs from Canada and other countries.
  3. End the current practice of drug rebates and require pharmacy benefit managers to pass the rebates as discounts through to beneficiaries under the Medicare Part D program.
  4. Implement the international price index (IPI) model for the purchase of prescription drugs under the Medicare program so seniors have access to the same lower prices paid by other developed countries.

The executive orders come with a few caveats. The drug rebate program can only be eliminated if it does not raise beneficiary premiums, federal spending, or out-of-pocket costs. Additionally, the executive order implementing the IPI model for prescription drug pricing was not released because, as an olive branch to the drug industry that has long opposed the proposal, the Trump Administration gave the industry 30 days—until Aug. 24—to come up with an alternative solution to lower drug costs. A meeting of top drug company executives with White House officials scheduled this week was cancelled by industry, in protest to the short notice and lack of details about the Administration’s executive orders. It is unclear if any of the executive orders will make a significant impact on drug costs, or if they will even be implemented given the federal rulemaking process required.

Release of the Senate COVID-19 Relief Proposal Underscores Difficult Negotiations Ahead

Earlier this week the Senate Republicans released their COVID-19 Relief Package, the Health, Economic Assistance, Liability protection, and Schools (HEALS) Act that contains approximately $1 trillion in relief aid priorities to address the COVID-19 pandemic. The differences between the HEALS Act and the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act passed by the House of Representatives in May portend difficult negotiations ahead in order to reach a compromise that the President will sign into law.

Some of the differences include additional support for the Health Care Provider Relief Fund (the Senate provides $25 billion vs. $100 billion in the House bill) and funding for virus testing, contact tracing and surveillance ($16 billion proposed by the Senate vs. $75 billion by the House). The Senate package also pushes back the time that providers would need to start repaying loans from the Medicare hospital accelerated and advance payments program from Aug. 1, 2020 until Jan. 1, 2021, while the House bill lowers interest rates required to be paid on loans to hospitals under the accelerated and advance payments program. There are other major differences in the House and Senate bills that represent major hurdles, including extension of the enhanced unemployment benefit and providing liability waivers related to COVID 19, as only the Senate bill does.

The Senate HEALS Act was officially released as multiple pieces of legislation, with six total sections. To view the provisions in greater detail, click on the links below:

Congress would like to complete final passage of a relief package by Aug. 7, however with the numerous and significant issues that need to be ironed out, completion of their work may slide into the following week.