A House effort to reopen the National Institutes of Health (NIH) as the government shutdown continued into its third day hit a Senate brick wall.

With a vote of 254-171 late Wednesday, the House passed H.J. Res. 73 to fund the NIH, at sequestered fiscal 2013 levels, through Dec. 15. The resolution, supported by some Democrats as well as Republicans, followed comments earlier in the day by Sen. Majority Leader Harry Reid (D-Nev.) in which he lamented on the Senate floor that 200 patients, including 30 children, had been turned away from an NIH clinic on Tuesday, the first day of the shutdown.

Under the Department of Health and Human Services’ contingency plan, the NIH Clinical Center remains open to take care of existing patients, but it is enrolling no new patients during the shutdown. (See BioWorld Today, Oct. 1, 2012.)

Currently, about 14,000 NIH employees – more than 70 percent of the agency’s work force – are furloughed. They would all return to work under the House resolution, if the Senate and president were to sign off on it.

That’s not likely to happen. President Barack Obama has said he would veto the resolution, which was part of five House measures intended to blunt the impact of the shutdown for certain federal agencies. “Consideration of appropriations bills in a piecemeal fashion is not a serious or responsible way to run the United States government,” the administration said.

Senate Democratic leadership echoed that sentiment at a news conference Thursday, saying it’s all or nothing when it comes to funding the government. The Senate is pushing for a continuing resolution, stripped of amendments, that would fund the entire government at 2013 levels through Nov. 15.

Claiming that passing the piecemeal bills would essentially be giving an individual lawmaker veto power over government funding, Sen. Charles Schumer (D-N.Y.) said at the press conference, “We are not going along with it.”

In earlier comments on the Senate floor Thursday, Sen. Barbara Mikulski (D-Md.) said that unless the FDA also were fully operational, “it is a hollow opportunity” to reopen NIH. Although more than half of the FDA’s staff is on the job, the agency’s activities are mostly limited to those funded by carryover fee balances.

Until Congress agrees on a 2014 spending bill or a continuing resolution, the FDA cannot collect 2014 user fees, which fund two-thirds of its drug review process. Subsequently, the agency is not accepting new or supplemental applications for drugs and biologics. (See BioWorld Today, Oct. 3, 2013.)

Sen. Jack Reed (D-R.I.) agreed with Mikulski, saying, “A piecemeal approach . . . won’t work since the pieces [of government] are so integrally related.”

The conversation quickly shifted to a potentially bigger crisis as the Treasury Department runs out of extraordinary means to pay the government bills under the current debt ceiling of nearly $16.4 trillion, which it hit in May. While the Congressional Budget Office expected Treasury to run out of options Oct. 22 at the earliest, Treasury Secretary Jack Lew said it would likely happen five days sooner.

The House Republican leadership is considering a grand fix that could end the shutdown, raise the debt limit and potentially end sequestration. Senate Republicans welcomed that effort Thursday.

“We’re at that moment in time where we realize that the continuing resolution and the debt ceiling are probably going to be linked together. They are linked together,” Sen. Bob Corker (R-Tenn.) said on the Senate floor as he stressed the need for the president, the House and Senate to finally start talking with each other about those issues.

But the president and Democrat lawmakers were concerned about the possibility of tying debt ceiling talks to the shutdown, given the impact a government default would have on financial markets. During the daily White House press conference Thursday, Press Secretary Jay Carney reminded the media that just the threat of a default caused serious market consequences in 2011.

“The debt ceiling should be raised without drama or delay,” he said.

Reed made a similar point in his remarks on the Senate floor. If the debt ceiling isn’t raised, “we could be facing a catastrophic financial situation that would affect not just government operations but markets worldwide,” the Rhode Island lawmaker said.

PhRMA Seeks to Block Rule

True to its word, the Pharmaceutical Research and Manufacturers of America (PhRMA) filed suit this week against the Health Resources and Services Administration (HRSA) to keep it from implementing a final rule that would limit the exemption of orphan drugs from mandatory price caps under the 340B Medicaid program.

The suit, which PhRMA promised in its comments on the proposed rule should it be made final, challenged HRSA’s authority to even issue a rule on the exemption included in the Affordable Care Act (ACA), since the health care reform legislation didn’t call for rulemaking on that specific provision.

By expanding the 340B program to children’s hospitals, free-standing cancer hospitals, critical access hospitals, rural referral centers and sole community hospitals, the ACA significantly increased the number of health care facilities that are eligible for the drug discounts, which can be up to 50 percent under the 340B price caps, PhRMA said in its complaint filed in the U.S. District Court for the District of Columbia. As a result, nearly one out of every three hospitals in the U.S. participates in the program, the trade group added.

To encourage the development of drugs for rare diseases and conditions, the ACA specifically exempted orphan drugs from the discount pricing at most of the newly included facilities.

HRSA diluted that exemption in its final rule, which went into effect Tuesday. According to the rule, orphan drugs are exempt from 340B pricing only when “used for the rare condition or disease for which that orphan drug was designated.”

The rule could create a tracking nightmare for drugmakers and hospitals when a drug is approved for multiple indications, including a rare condition, PhRMA noted, adding that it also would discourage the much-needed development of new orphan drugs.