publication date: Nov. 18, 2016

Republicans Ditch 2017 Appropriations To Tailor Spending to Trump Priorities

By Matthew Bin Han Ong

The House and Senate leadership postponed appropriations for fiscal 2017 in favor of a second continuing resolution that runs through March 31, 2017.

The move Nov. 17 is likely a signal that Congressional Republicans are hoping to start the budget process anew, tailoring it to the priorities of the administration of president-elect Donald Trump.

“While I’m disappointed that the Congress is not going to be able to complete our annual funding work this year, I am extremely hopeful that the new Congress and the new administration will finish these bills,” House Appropriations Chairman Hal Rogers (R-Ky.) said in a statement. “I am also hopeful for a renewed and vigorous ‘regular order’ on future annual funding bills, so that the damaging process of continuing resolutions will no longer be necessary.”

The CR allows legislators to consider the $19.5 trillion federal debt limit, which has been periodically suspended since February 2013. The debt limit resets on March 16.

It’s unclear whether the reset would impact previous commitments by appropriators to raise NIH funding by up to $2 billion in fiscal 2017. Capitol Hill insiders are concerned that austere Republican budgetary priorities would take precedence over discretionary funding increases, potentially placing areas of health care and health research on the cutting block.

NIH was slated to receive $33.3 billion and NCI $5.43 billion in the FY17 Senate appropriations bill (The Cancer Letter, Sept. 23).

Programs at risk include the Affordable Care Act and, presumably, the Agency for Healthcare Research and Quality, a $428 million agency that provides administrative and scientific support to the United States Preventive Services Task Force and plays a central role in the implementation of President Barack Obama’s health care law.

Though little has been said about AHRQ since the election, the writing is on the wall: House and Senate appropriators have tried to defund the 25-year-old agency—which funds patient-centered outcomes research and monitors the manner in which medicine is practiced in the U.S.—in 2010, 2012, and 2015 (The Cancer Letter, June 26, 2015).

The decision to extend the CR runs counter to heavy pressure over the past three months by cancer groups and research advocates, who lobbied for sustainable increases to NCI and NIH budgets, and for prompt passage of the 21st Century Cures Act before the calendar year is out.

“The plan that Republican leaders in Congress put forward this week to opt for another short-term CR until March, as opposed to completing their work on the FY 2017 appropriations bills before the end of the year, is extremely disappointing, especially when taking into account the enormous bipartisan support and commitment we’ve seen from members of Congress throughout this past year to build on the momentum for medical research that began in FY 2016 when they provided a $2 billion funding increase for the NIH,” said Jon Retzlaff, managing director for science policy and government affairs at the AACR.

“Our champions in the House, Chairman Tom Cole (R-Okla.) and Ranking Member Rosa DeLauro (D-Conn.), and in the Senate, Chairman Roy Blunt (R-Mo.) and Ranking Member Patty Murray (D-Wash.) deeply understand that if our nation is to capitalize on the unprecedented scientific opportunities that exist today in medical research, it is going to require robust, sustained, and predictable annual funding increases for the NIH and NCI,” Retzlaff said to The Cancer Letter.

“And while we’ve never been in a better position to prevent and cure cancer, we are so very much reliant on our nation’s policymakers to provide continuing investments in the NIH and NCI, especially if we are going to continue to make the strides required to eradicate cancer worldwide.”

While federal agencies await Trump appointees, negotiations on the Cures Act, which is not an appropriations bill, are almost complete, and the bill still appears likely to pass in December, insiders say.

The measure, designed to accelerate drug development and modernize clinical trials, is expected to provide $6 billion to $8.5 billion in additional funding for NIH over five years, as well as $680 million to NCI for Vice President Joe Biden’s National Cancer Moonshot Initiative (The Cancer Letter, Nov. 4).

Research advocates say they have not heard from Team Trump on his administration’s commitment to funding for biomedical research.

Over a week after the election, Trump has yet to unveil a comprehensive and actionable health policy agenda, but a tentative priority list has been posted on the transition team’s website, GreatAgain.gov:

  • “Protect individual conscience in healthcare,
  • “Protect innocent human life from conception to natural death, including the most defenseless and those Americans with disabilities,
  • “Advance research and development in healthcare,
  • “Reform the Food and Drug Administration, to put greater focus on the need of patients for new and innovative medical products,
  • “Modernize Medicare, so that it will be ready for the challenges with the coming retirement of the Baby Boom generation—and beyond,
  • “Maximize flexibility for States in administering Medicaid, to enable States to experiment with innovative methods to deliver healthcare to our low-income citizens.”

In related news, former Republican presidential candidate and neurosurgeon Ben Carson said that, post-election rumors notwithstanding, he will not serve in the Trump administration, putting an end to speculation that he would be appointed as secretary of Health and Human Services.

 

Replacing Obamacare

While Vice President-elect Mike Pence—who leads the transition team—maintains a hardline position on abortion, Trump signaled that he may be softening his stance on the Affordable Care Act.

On the campaign trail and during the presidential debates, Trump vowed to “completely repeal Obamacare,” which involves “eliminating the individual mandate,” according to Trump’s health care reform paper.

After the election, some oncologists expressed concern that death rates from cancer would rise if the ACA were to be scrapped without a replacement that ensures uninterrupted access to health care (The Cancer Letter, Nov. 11).

There will be no lapses between the repeal and a replacement, Trump said, promising that he will keep the law’s protections for patients with pre-existing conditions. A provision allowing young adults to stay on their parents’ policies until 26 may remain as well, he said.

“It happens to be one of the strongest assets,” Trump said in a CBS 60 Minutes interview. “We’re going to do it simultaneously. It’ll be just fine. We’re not going to have, like, a two-day period and we’re not going to have a two-year period where there’s nothing. It will be repealed and replaced. And we’ll know. And it’ll be great healthcare for much less money. So it’ll be better healthcare, much better, for less money. Not a bad combination.”

Trump will need a plan to offset the costs that come with repealing the individual mandate, which was designed to balance the expansion of coverage to sick people by creating pools that also include young and healthy adults. His transition website proposes creating a separate market for individuals that most need health insurance:

“To maximize choice and create a dynamic market for health insurance, the administration will work with Congress to enable people to purchase insurance across state lines. The administration also will work with both Congress and the States to re-establish high-risk pools—a proven approach to ensuring access to health insurance coverage for individuals who have significant medical expenses and who have not maintained continuous coverage.”

It is unknown whether—and how—Trump plans to follow through on other health care reform promises he made during his election campaign.

He had pledged to:

  • Allow health insurance premium payments to be fully deducted from tax returns,
  • Allow individuals to use Health Savings Accounts, with tax free contributions,
  • Require price transparency from all health care providers, including physicians, clinics, and hospitals,
  • Block-grant Medicaid to the states, and
  • Allow access to imported, safe, and cheaper drugs from other countries.

 

Reforming FDA

Trump’s transition website includes a call to reform FDA, to “put greater focus on the need of patients for new and innovative medical products.”

Industry insiders say they have not received explicit communication from Trump’s team: it is unclear which regulatory processes at the agency would be eliminated, streamlined, or revamped, or whether there will be a specific focus on drugs, biologics, or devices.

However, the new administration presents an opportunity to modernize FDA, said the Pharmaceutical Research and Manufacturers of America, an industry lobby group.

“To ensure biopharmaceutical innovation continues, we need to modernize FDA to keep pace with scientific advances, remove regulatory barriers that make it harder to move to a value-driven health care system and focus on making better use of the medicines we have today,” said Andrew Powaleny, senior manager of communications at PhRMA, to The Cancer letter. “We look forward to continue working with the administration and Congress on these important issues.”

One of those issues involve advocating for changes in FDA’s policy—specifically, in the Code of Federal Regulations, Title 21, Part 99—that prohibits the dissemination of information on unapproved medical products.

Two rulings in 2012 and 2015 forced FDA to revise its policies: the First Amendment protects “truthful and non-misleading speech” by manufacturers regarding their products, federal courts ruled.

The prohibition exists to prevent spreading information that has not been vetted by FDA, avoid confusion, and eliminate any risk to the public health, according to conventional FDA wisdom and academics familiar with Title 21.

Those regulations are outdated, because companies should be able to share safety and efficacy information with payers, health systems, and practitioners prior to approval, PhRMA argues in a proposal titled, “Policy Solutions: Delivering Innovative Treatments to Patients.”

“In recent years, payers have expressed a need for greater predictability and certainty regarding the biopharmaceutical pipeline as they often set premiums and formularies 18 months in advance,” the document reads. “Yet outdated FDA regulations chill manufacturer/payer discussions. Further, once a medicine is approved, current rules can also prevent timely dissemination of important safety, value or efficacy information about a product when the information is not already included in the product’s labeling.

“Until a medicine is approved, there is no safe harbor to share proactively such important information as data on expected indications and the expected effect on the patient population. The ability to share this information earlier would give payers a better sense of potential costs and help them set premiums accordingly.”

Earlier this year, PhRMA and the Biotechnology Innovation Organization, a trade association, pledged in a joint white paper to communicate science-based information accurately, provide appropriate context about the data, and tailor those messages to the intended audience.

“These principles are intended to form the basis for defining new and clear regulatory standards governing responsible, truthful and non-misleading communications to inform health care professionals about the safe and effective use of medicines,” the document reads. “The principles pertain primarily to data and information outside of FDA-approved labeling, and are intended to establish responsible, science-based parameters for accurate and trusted information sharing.”

FDA convened a public hearing Nov. 9 and 10 to inform the agency’s policy development on the issue.

“The FDA would be reckless to weaken rules and allow the pharmaceutical and medical device industry to promote products for which they are not proven to be safe and effective,” said Sidney Wolfe, founder and senior adviser of Public Citizen’s Health Research Group, who testified at the hearing. “Opening the door to the promotion of potentially dangerous products undermines the entire FDA approval process. The FDA needs to slam this door shut.”

 

Restructuring Medicare

Trump’s latest priorities include a plan to “modernize Medicare, so that it will be ready for the challenges with the coming retirement of the Baby Boom generation—and beyond,” according to his transition website.

The details of that plan have not emerged, but House Speaker Paul Ryan (R-Wis.) is expected to play a role, as a leading conservative icon noted for his harsh criticism of the federal program.

“With approximately 10,000 Baby Boomers turning 65 every day, Medicare’s structural imbalance threatens beneficiaries’ access to quality, affordable care,” Ryan’s website reads. “Currently, Medicare reimburses health care providers for services, creating a perverse incentive to order more tests and perform more services than may be necessary as a way to maximize one’s share of the program.

“By basing payment on volume, not quality, costs rise and efficiency is reduced. Ultimately, this flaw in the structure of the program is driving up health care costs, which are, in turn, threatening to bankrupt the system—and ultimately the nation.”

Observers say that Ryan advocates for what appears to be a form of privatization of Medicare: turning the single-payer system into an exchange program, with coverage plans that individuals can choose to enroll in.

“For younger workers, when they become eligible, Medicare will provide a premium-support payment and a list of guaranteed coverage options—including a traditional fee-for-service option—from which recipients can choose a plan that best suits their needs,” Ryan’s website reads. “Premium support, competitive bidding, and more assistance for those with lower incomes or greater health care needs will ensure guaranteed affordability for all seniors.

“In September 2013, the Congressional Budget Office analyzed illustrative options of a premium support system. They found that a program in which the premium-support payment was based on the average bid of participating plans would result in savings for affected beneficiaries as well as the federal government.

“Moreover, it would set up a carefully monitored exchange for Medicare plans. Health plans that chose to participate in the Medicare Exchange would agree to offer insurance to all Medicare beneficiaries, to avoid cherry-picking, and to ensure that Medicare’s sickest and highest-cost beneficiaries receive coverage.

“While there would be no disruptions in the current Medicare fee-for-service program for those currently enrolled or becoming eligible before 2024, all seniors would have the choice to opt in to the new Medicare program once it began in 2024. This budget envisions giving seniors the freedom to choose a plan best suited for them, guaranteeing health security throughout their retirement years.

“These reforms also ensure affordability by fixing the currently broken subsidy system and letting market competition work as a real check on widespread waste and skyrocketing health-care costs. Putting patients in charge of how their health care dollars are spent will force providers to compete against each other on price and quality. That’s how markets work: The customer is the ultimate guarantor of value.

“Reform aimed to empower individuals—with a strengthened safety net for the poor and the sick—will not only ensure the fiscal sustainability of this program, the federal budget, and the U.S. economy. It will also guarantee that Medicare can fulfill the promise of health security for America’s seniors.”

Copyright (c) 2017 The Cancer Letter Inc.