Democrats’ slender majority in the House next year will have an outsized impact on healthcare policy and healthcare stakeholders in 2019 and beyond. From potential bipartisan deals on prescription drug prices to Democrats’ “shock and awe” oversight agenda, here are five things to know about what the 2018 midterm election results mean for healthcare policy in 2019.
1. Oversight, oversight, oversight. House Democrats are preparing to go into overdrive on oversight in 2019, focusing on the Trump administration and the private sector. Investigative letters with threats of subpoenas will soon be heading down Independence Avenue to Health and Human Services Department (HHS) headquarters.
The private sector will be in Democrats’ oversight crosshairs, too, especially pharmaceutical manufacturers. Before the election, Rep. Jan Schakowsky, D-Ill., a senior member of the Energy and Commerce Health Subcommittee, sent letters to five drugmakers demanding to know how they used savings from the 2017 tax relief law and publicly funded research even as they raised drug prices. The letters went to the CEOs of major pharmaceutical companies.
General counsels whose companies receive letters from minority party members such as Schakowsky sometimes don’t even respond, viewing the missives as little more than a toothless tiger. But soon House Democrats will be firing with real bullets: Beginning in January, they will have subpoena power to compel document production and testimony from company executives.
Although Rep. Frank Pallone, D-N.J., the incoming chairman of the Energy and Commerce Committee, said subpoenas should be a last resort, his panel is readying massive oversight scrutiny over the healthcare sector – especially pharma.
Pallone’s staff has held meetings with former staff who served on the committee under longtime Chairman John Dingell, D-Mich. The former lawmaker was legendary for firing off “Dingell-grams” to Cabinet secretaries and corporate CEOs, demanding answers and records on a host of policy issues. Pallone’s staff also has had discussions with presumed Speaker-to-be Nancy Pelosi, D-Calif., about boosting the committee’s oversight budget, including hiring dozens of investigators and attorneys.
Pallone will be targeting the Food and Drug Administration’s (FDA) accelerated approval pathways for drug and medical device manufacturers as well as relaxed post-market study requirements. The committee also will examine the FDA’s approval of opioids and opioid manufacturers’ activities before the crisis gripped the nation.
The real oversight fireworks may come from the committee that lacks legislative authority over healthcare policy. But the Oversight and Government Reform Committee – on which Rep. Elijah Cummings, D-Md., will become chairman – can probe any aspect of the Executive Branch or private sector, including issuing subpoenas to compel executives to testify in public hearings. Cummings is a longtime drug industry critic and had meetings in 2017 with President Donald Trump to discuss legislation to lower drug prices.
2. Finally, Affordable Care Act repeal and replace is dead. With Democrats taking the House majority next year, Republicans won’t be able to once again try to unwind the Affordable Care Act (ACA).
That effort failed in 2017 after months of wasted legislative resources in both the House and Senate.
Worse, the effort to strip protections for pre-existing conditions opened a deadly political narrative that Democrats exploited in this week’s midterm elections. Democrats nationwide sharply criticized Republican incumbents for supporting efforts to roll back requirements that insurers offer coverage to patients with pre-existing conditions. That line of attack crippled GOP House incumbents, especially those seeking re-election in suburban swing districts.
Senate Majority Leader Mitch McConnell, R-Ky., earlier this year said the GOP would take another run at ACA repeal as part of larger efforts to reform Medicaid if they kept their congressional majorities. But without a House majority next year, the party lacks the procedural tools to attack the ACA directly.
Although Republicans were able to strip out the ACA’s individual mandate as part of the 2017 tax reform law, most of the healthcare law remains on the books and likely will for years to come.
3. Scrutiny on drug prices. Pelosi has said advancing legislation to lower drug prices will be among the House’s first priorities in 2019. Lloyd Doggett, D-Texas, is among Congress’ loudest critics of the pharma industry – and he’s a frontrunner to become chairman of the Ways and Means Health Subcommittee. The panel has jurisdiction over how Medicare and Medicaid reimburses hospitals and physician-administered drugs.
Doggett this summer introduced legislation that would empower Medicare to negotiate prices directly with manufacturers – and if the companies refuse to negotiate, HHS could invalidate patents and grant competitive licenses to other manufacturers. Doggett is expected to push for the legislation – which currently has 100 Democrats as co-sponsors – in the opening weeks of the new Congress, including holding hearings in his subcommittee.
Doggett’s bill may not win House approval and likely wouldn’t pass in the Senate. But it underscores the ferocity with which Democrats are expected to target pharma and drug prices.
The pharmaceutical industry never viewed Trump as an ally – and how could they after he repeatedly criticized them as “getting away with murder”? But for nearly two years, the industry believed it could work with the White House to advance market-based reforms that would increase competition while lowering drug costs and patients’ out-of-pocket expenses.
That all changed last month, when Trump and Azar unveiled a proposed Medicare Part B pilot program that would test reimbursing drugs administered in physicians’ offices based on an index of drug prices paid in European countries. Industry pledged to fight the proposal, saying it would effectively import foreign price controls into the U.S. reimbursement system.
Now industry is worried House Democrats could seek to cut a deal with Trump to advance even more adverse policies, such as allowing Medicare to negotiate prices directly with manufacturers and drug importation. Trump campaigned in favor of both of those policies in 2016.
Azar shot down direct Medicare negotiation during Senate testimony earlier this year. But the secretary did push FDA Commissioner Scott Gottlieb to establish a working group to look at a limited importation plan.
4. House Democrats’ healthcare priorities. Legislation to lower drug prices and steps to strengthen the ACA will be among House Democrats’ top healthcare policy priorities. But their legislative activity in the healthcare sector won’t stop there.
Pallone is expected to target the $84 billion cosmetics market, including examining whether to require FDA approval of products before they could be sold to consumers. The committee also wants to give FDA the statutory authority to regulate lab-developed tests and speed approvals of biosimilars.
The panel is expected to push to eliminate exclusivity for branded manufacturers of over-the-counter drugs and for reforms of the Tobacco Control Act to prohibit menthol from cigarettes and to ban e-cigarettes.
The Ways and Means Committee is expected to push legislation requiring unique device identifiers for medical devices be included on hospital claims forms.
5. Senate Finance Committee. The Senate Finance Committee will get new leadership in 2019 after the retirement this year of Chairman Orrin Hatch, R-Utah. The panel is the principal Senate committee with jurisdiction over both healthcare regulatory and reimbursement policies. It also has jurisdiction over taxes and trade.
Sen. Chuck Grassley, R-Iowa, will most likely become the next chairman. He would have to relinquish the chairmanship of the Judiciary Committee, which under his leadership successfully confirmed two Trump-appointed Supreme Court justices and a record number of federal appeals court judges.
Grassley is no ally of the pharmaceutical industry, but he’s also been critical of other stakeholders, including hospitals over the 340B drug discount program and insurers and providers about price transparency issues.
Grassley served as Finance Committee chairman for part of 2001 and again from 2003 through 2006. Under Senate Republican rules, he could return to the Finance Committee as chairman for another two years.
If Grassley elects to stay at the Judiciary Committee, Sen. Mike Crapo, R-Idaho, would be next in line to become chairman. Crapo’s healthcare record is thinner than Grassley’s, though he has been active on veterans’ healthcare.