Health and Human Services (HHS) Secretary Alex Azar was peppered with questions about the Trump administration’s budget proposal for fiscal 2021 during a Feb. 13 Senate hearing. However, another theme that resonated during the hearing was Senate legislation addressing drug prices. Azar addressed the issue of price caps, while noting that the bill “leaves plenty of room” for both ample profit margins and innovation in drug development.
President Donald Trump discussed the drug pricing quandary in his Feb. 4 State of the Union Address, calling for bipartisan legislation that “achieves the goal of dramatically lowering prescription drug prices.” The latest iteration of the bill that aims to tackle the issue – sponsored by Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and Ranking Member Ron Wyden (D-Ore.) – would, among other things, require that drug makers refund federal health programs for price increases that outpace inflation. Industry responded that the legislation could have a chilling effect on innovation, an argument with which Azar took exception.
Grassley said at the hearing’s outset that he disagreed with many of the provisions of the HHS budget for fiscal 2021 but emphasized that prescription drug prices are still a priority. While the list of priorities included rural care, Grassley noted that the department faces “many important challenges,” such as the COVID-19 variant of the coronavirus, which, like other issues, arose with little notice. “The issues that I’ve highlighted are a reminder that we can work together in a bipartisan way,” Grassley said.
Wyden: ‘Patients getting mugged’ at the drugstore
For his part, Wyden said the budget proposal “rips holes in the safety net” through the proposed reductions in Medicaid spending growth. Wyden characterized those changes to Medicaid spending growth as “harsh, draconian cuts.” He also took aim at several of the administration’s proposals regarding drug pricing. Wyden said policy proposals regarding price disclosure and indexing U.S. drug prices to those of other nations either lacked follow-up or died on the vine, while also arguing that approvals of generic drugs have done little to lower prices for patients.
“The reality is, patients are getting mugged at the pharmacy counter,” Wyden stated.
Azar said the number of drug overdose deaths “began to decline for the first time in nearly two decades” in 2018 and 2019, adding that the U.S. FDA had approved a record number of generic drugs and biosimilars in fiscal 2019. Azar noted that the administration proposed $94 billion in discretionary funding for HHS along with the $1.3 trillion in mandatory spending for federal health and other programs.
Azar heralded the Grassley-Wyden package as “reasonable” and “bipartisan,” giving administrators of Medicare Part D plans the motivation to negotiate prices with big pharmaceutical firms. He said he is unsure why drug makers are not interested in taking part in some of these proposals.
HHS “has the largest discretionary budget” outside defense spending, Azar said, adding that among the reforms in the budget proposal is one that would eliminate cost sharing for Medicare beneficiaries should a screening colonoscopy return a positive result. The budget proposal should extend the viability of the Medicare Part A trust fund for another 25 years, he said. As matters stand, the fund is expected to hit zero in 2026.
The budget proposal also allocates more funds for state opioid programs and sets aside $760 million for HIV, which Azar said, “reflects how seriously we take other infectious diseases” as well. Also on this list is the COVID-19 virus, and the budget prioritizes funding for infectious disease programs at the Centers for Disease Control and Prevention (CDC). Azar said the CDC had confirmed case number 14 of COVID-19 in the U.S., adding that another would be announced in the hours following the hearing.
That latest case is a patient who had traveled to Wuhan, China. The CDC confirmed that in a Feb. 13 statement, which said the patient tested positive despite lacking symptoms. The agency said more than 600 people who returned to the U.S. from Wuhan are still under quarantine.
Grassley said he supported the renewed focus on rural care in the budget proposal but bemoaned the absence of details regarding the policy. Azar said the proposal to allow critical access hospitals to convert to emergency hospitals should alleviate some of the problems with rural hospital closures, thanks to the fact that emergency care hospitals are not subject to a minimum bed count of 25. The proposal would pay these hospitals under the Medicare outpatient fee schedule plus a cost adjustment that would pay an additional 10% of facility payments to assist those hospitals with capital costs.
Rural health clinics “deserve more money” as well, Azar said, highlighting the proposal to craft a novel Medicare prospective payment system for these facilities. This, along with a proposal to boost the number of rural health clinics to be deemed telehealth-eligible sites, are essentially legislative proposals, as they lack statutory authority, Azar noted.
Mental health, addiction legislation wins support
Sen. Debbie Stabenow (D-Mich.) urged Azar to encourage the president to support the Excellence in Mental Health and Addiction Treatment Expansion Act, which she co-sponsors with Sen. Roy Blunt (R-Mo.). The bill builds on legislation passed in 2014, and Stabenow said the Congressional Budget Office recently reduced its estimate of the associated program costs by half. She also said that many of the grants issued under the legacy legislation are running out of funds. Azar concurred, vowing to work with the committee on expanding the program.