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January 2018

GOP Leadership Comments on 2018 Agenda     

During the holiday recess, Senate Majority Leader Mitch McConnell (R- Ky.) made comments indicating that the Senate would be moving on from attempts to repeal and replace the Affordable Care Act (ACA), while also leaving room for Sens. Lindsey Graham (R-S.C.) and Bill Cassidy (R-La.) to continue work on their repeal legislation. When Sen. Graham countered that he will continue to push the Graham-Cassidy plan in the coming year, McConnell stated his support for a vote on the bill if it has enough support to pass. McConnell stated that the Senate would be turning its focus to issues on the GOP agenda with a greater possibility of success in a 51-49 Senate following Doug Jones (D-Ala.) swearing in on January 3.


Speaker of the House Paul Ryan (R-Wis.) has stated that he intends to focus on entitlement reform in 2018. He identified Medicare as the largest entitlement program that requires an overhaul because of its significant impact on the nation’s deficit and debt. Ryan also expressed support for a revamping of social programs in order to get beneficiaries from “welfare to work.” The Speaker stated that he is in talks with the President about the importance of choice and competition in health care. House Ways and Means Committee Chairman Kevin Brady (R-Texas) has also stated that welfare reform is the next item on his agenda, once work on the GOP tax bill is complete.


Speaker Ryan does not believe that Obamacare repeal is done with. Sen. McConnell, however, attempted to lower expectations for entitlement reform, noting that it has been historically impossible without bipartisan agreement.


Senate Finance Schedules Azar Confirmation Hearing

The Senate Finance Committee held a hearing on the nomination of Alex Azar to serve as Secretary of the U.S. Department of Health and Human Services (HHS). While Democrats raised questions about rising drug costs and the nominee’s ties to the pharmaceutical industry, Azar is expected to be confirmed by the Senate later this year.


Short Term Spending Bill Passes to Keep Government Open

Lawmakers passed a spending deal to avoid a partial government shutdown before the current continuing resolution (CR) expired on December 22.


Republicans in the House had previously endorsed a short-term spending bill that would fund the Department of Defense for the remainder of the fiscal year (FY), while funding the rest of the federal government at current spending levels through January 19. This strategy was strongly opposed by Democrats in the Senate, where the GOP needed at least eight Democratic votes for passage.


The original House bill also included a five-year authorization and funding for the Children’s Health Insurance Program (CHIP), offset by a number of pay- fors that had already been rejected by Democrats. In addition to supporting parity between defense and non-defense spending, Democrats pushed for the inclusion of funding to combat the opioid epidemic and provisions to protect young immigrants under the Deferred Action for Childhood Arrivals (DACA) program. he final package (H.R. 1370) drafted by the House was a clean CR, extending all government funding at current levels through January 19. It also included measures for CHIP – providing the program with $2.85 billion in funding through March 31st of next year while extending the Centers for Medicare and Medicaid Services’ (CMS) ability to use Redistribution Funds to assist states experiencing CHIP-funding shortfalls.


The CR also temporarily extends funding for community health centers, the National Health Service Corps, Teaching Health Center Graduate Medical Education, and the Special Diabetes Program through $750 million in Act’s (ACA) Prevention and Public Health Fund. Additionally, the CR waives the mandatory pay-as-you- go (PAYGO) spending cuts that were set to be triggered by the recently-passed tax reform legislation.


Stabilization Package On Hold

Senate Majority Leader Mitch McConnell (R-Ky.) had previously assured Sen. Susan Collins (R-Maine) passage of legislation to stabilize the individual health insurance market before the end of the year in exchange for her vote on tax reform. Conservative lawmakers in the House, however, were strongly opposed to any measures that would support the Obamacare marketplace, despite the tax bill’s repeal of the individual mandate. Republicans in the House also expressed concerns that language to fund cost-sharing reduction (CSR) payments did not explicitly prohibit them from being used for abortion services – an issue the legislation’s supporters argue is already covered by such prohibitions in the Affordable Care Act (ACA).


Although stabilization measures have the backing of the White House, Sen. Collins and Sen. Lamar Alexander (R-Tenn.), the author of one of the stabilization bills, requested that the health provisions not be added to the CR to prevent a government shutdown. Instead, the lawmakers plan to offer the legislation when Congress returns in 2018 and begins consideration of an omnibus spending bill and reauthorization of CHIP and other public health programs.


Tax Overhaul Enacted

Congress passed an overhaul of the tax code. The Tax Cuts and Jobs Act (H.R. 1) will repeal the ACA’s individual mandate starting in 2019. It will also expand the medical expense deduction in 2018 and 2019 so that individuals can deduct medical expenses exceeding 7.5 percent of the income before the income threshold returns to 10 percent. The House of Representatives voted to approve the conference report to accompany the bill and send it to the Senate by a vote of 227-203. The Senate then passed the tax code rewrite by a vote of 51-48 after making some required changes to the legislation due to procedural technicalities. Because the package will increase the deficit by $1.5 trillion over the next decade, the bill would have triggered automatic spending cuts to Medicare and other programs in the absence of a waiver of the so-called PAYGO rules.


CDC Releases New Reports on Life Expectancy, Opioid Overdoses

U.S. life expectancy has fallen for the second year in a row, according to a new report from the Centers for Disease Control and Prevention’s (CDC) National Center for Health Statistics (NCHS). American life expectancy is now 78.6 years. While only a slight decrease of 0.1 years when compared to 2015, the two-year trend is unusual and notable given that life expectancy is otherwise on the rise across the globe. While the leading causes of death in 2016 remained the same as in 2015, the CDC attributes the life expectancy decrease to an increase in mortality from unintentional injuries, suicide, and Alzheimer’s disease.


The agency found that drug overdoses were the cause of 63,600 deaths in 2016, an increase of 21 percent over the previous year. This increase was driven by the rise in deaths resulting from the use of synthetic opioids like fentanyl, which doubled between 2015 and 2016. The states with the highest rate of drug overdose deaths were West Virginia, Ohio, New Hampshire, the District of Columbia, and Pennsylvania.


Lawmakers Request Information from DEA on Partial Fill

A bipartisan group of senators have written to the Drug Enforcement Administration (DEA) urging the agency to update regulations and guidance related to the partial filling of schedule II controlled substances. The lawmakers argue that prescribers and pharmacists need additional clarity about steps that can be taken to address the opioid crisis through the partial filings of prescriptions to reduce the number of opioids that could be misused in homes across the nation.


Democrat Doug Jones Wins in Alabama Senate Election Upset

Former U.S. attorney Doug Jones (D) won the election for the Alabama senate seat vacated by now Attorney General Jeff Sessions in an upset against Republican Roy Moore. Jones will be the first Democrat to represent Alabama in the Senate in over two decades and will serve out the rest of Sessions’ term until January 2021. The loss of a Senate seat complicates the GOP’s 2018 agenda. Senate Republicans will now only be able to afford one defection in any effort to use the budget reconciliation process.


NAS Report Recommends Federal Government Rx Negotiations

A new report from the National Academies of Sciences, Engineering and Medicine (NAS) recommends that the federal government negotiate drug prices and allow for more flexible drug formularies. The report examines the role of generics and biosimilars, intellectual property issues, financial transparency, drug advertising, and insurance benefit design in the prescription marketplace. The National Academies argue that increasing prescription drug and medical costs, which equal 18 percent of the nation’s gross domestic product (GDP), are unsustainable to society as a whole, and make recommendations aimed at improving the affordability of prescription drugs while continuing innovation in drug development.


Hatch to Retire in 2018

Sen. Orrin Hatch (R-Utah) has announced his plans to retire at the end of the year following seven terms in the Senate. Sen. Hatch was first elected to the Senate in 1976 and is the longest-serving Republican in the chamber. He is the president pro temper of the Senate and has served as the chairman of the Senate Finance Committee since 2015. Sen. Hatch is the third in a total of eight Republicans up for reelection this year to announce his retirement.


340B Lawsuit Dismissed

The U.S. District Court for the District of Columbia has dismissed a lawsuit from the hospital industry aimed at preventing cuts to the 340B drug discount program. A recent final rule from the Centers for Medicare and Medicaid Services (CMS) reduces Medicare payments to certain hospitals for outpatient drugs purchased under the 340B program by $1.6 billion effective January 1.


The court found that the plaintiffs, including the American Hospital Association, Association of American Medical Colleges, and America’s Essential Hospitals, failed to provide any concrete claim for reimbursement and were prematurely suing the agency given that the cuts had not yet taken effect. The groups have said that they will continue to pursue the lawsuit and plan to refile their complaint after the reimbursement cuts have taken place.


Obamacare Enrollment Exceeds Expectations

The Centers for Medicare and Medicaid Services (CMS) announced that nearly nine million people enrolled in the federal Obamacare exchanges this year. Last year, 9.2 million people signed up for coverage during an open enrollment period that was twice as long.