The stimulus bill passed by the U.S. Senate March 26 on a vote of 96-0 does more than throw $2.2 trillion into the war against COVID-19.
“This is not … a stimulus package. It is emergency relief,” Senate Majority Leader Mitch McConnell (R-Ky.) said on the Senate floor before the vote.
Much of that relief comes from lessons learned as the nation responds to the coronavirus outbreak. Some of those lessons are being translated into new authorities the FDA and other federal agencies can use in the future to protect against the types of shortages being experienced now.
For instance, the bill, which the House is expected to pass Friday, gives the FDA more tools, and responsibilities, to mitigate potential drug and device shortages. Under the bill, the FDA is required to prioritize and expedite drug reviews and inspections to prevent or mitigate drug shortages.
Drug manufacturers would be required to maintain contingency plans to ensure a backup supply of their products and to give the FDA information about drug volume. If active pharmaceutical ingredients (APIs) are the cause of a supply disruption, manufacturers would have to submit information about their APIs.
Unlike drug companies, device makers currently don’t have to report potential shortages. The stimulus package clarifies that, during a public health emergency, they would be required to respond to the FDA’s requests for information about device or component shortages.
Other measures intended to address future shortages of medical products include tasking the National Academies with reporting to Congress on the security of the U.S. drug and device supply chain and expanding the Strategic National Stockpile to include medical supplies such as the swabs needed for COVID-19 testing. To incentivize production and distribution of personal protective respiratory equipment in a public health emergency, the bill also grants permanent liability protection to the manufacturers of the equipment.
To spur innovation in finding new ways to deal with emerging threats, the legislative package provides breakthrough therapy designations for animal drugs that could prevent animal-to-human transmission of a disease, which is the suspected cause of COVID-19. In addition, the bill removes the Biomedical Advanced Research and Development Authority (BARDA) cap on other transaction authority, during public health emergencies, so BARDA can more easily partner with the private sector on R&D and the scale-up of manufacturing.
Follow the money
Of course, the bill also provides a lot of new funding for the FDA, NIH and other federal health agencies. Those allocations include:
In addition, the package provides temporary relief from the 2% sequester to Medicare rates from May through December. Since the enforced hardships of the fiscal 2013 sequester, Congress has circumvented other sequesters under the 2011 Budget Control Act, but it has continued the 2% Medicare sequester through 2027 to help offset the cost of other spending. Because of that sequester, the add-on payment for Medicare Part B drugs has effectively been 4% instead of 6%.
Drug- and device makers, especially smaller companies, could benefit from several other measures in the stimulus bill that are intended to help the economy recover, and they may indirectly benefit from the $150 billion to be given to medical facilities in what Sen. Charles Schumer (D-N.Y.) called a Marshall Plan for Hospitals. The plan covers a new grant program for hospitals and health care providers, personal and protective equipment for health care workers, testing supplies, the construction and equipping of new facilities, and several other needs.
The Senate passed the stimulus bill 65 days after the first COVID-19 case was confirmed in the U.S., according to McConnell. Since then, Congress has responded with two supplemental bills, the first of which was $8.5 billion.
Although this third package dwarfs what’s been done before, some groups continue to plead with Congress for more. “While this legislation is an important first step forward, more will need to be done to deal with the unprecedented challenge of this virus,” Rick Pollack, president and CEO of the American Hospital Association, said following the Senate vote Wednesday.