Becerra Takes The Helm At HHS; More Visibility On Administration’s Drug Pricing Priorities To Follow
Executive Summary
Becerra’s HHS has a new crop of former Capitol Hill staffers in its policy ranks who are well versed on legislation in the health care realm, including prescription drug pricing reform. That will help advance the Administration’s agenda.
US Health and Human Services Department Secretary Xavier Becerra’s approval by the Senate means we’ll begin to get more visibility into the Biden Administration’s plans for prescription drug pricing reform on the regulatory and legislative fronts. His nomination cleared the Senate on 18 March in a narrow 50-49 vote with support from just one Republican, Susan Collins of Maine.
It’s pretty clear the Biden Administration wants to pursue drug pricing reform but not what specific policies it will prioritize. President Biden campaigned early on in favor of drug pricing policies but then pivoted to focus mainly on his approach to managing the pandemic and that has been his priority since taking office.
Becerra’s confirmation hearings in the Senate did not illuminate the Administration’s drug pricing agenda either. Although he embraced the concept of drug pricing reform, and pledged to act quickly, he avoided discussing specifics. (Also see "HHS Secretary Nominee Becerra Plans ‘Swift’ Action On Drug Pricing Reform" - Pink Sheet, 23 Feb, 2021.)
There were some hints about how he would approach various issues. He touted his record in blocking “pay for delay” patent settlements, indicated concerns with the Trump Administration’s rebate rule and criticized manufacturer efforts to restrict 340B discounts to contract pharmacies.
He also avoided supporting the exercise of federal government “march in” rights as a way to lower drug prices, despite advocating for such action when he was attorney general of California. (Also see "US HHS Nominee Becerra Treading Carefully On ‘March In’ Rights" - Pink Sheet, 3 Mar, 2021.)
More detail on the Administration’s position on the rebate rule should come soon. HHS must present a plan for the rule by 1 April under a court-ordered deadline in a lawsuit against the department brought by the Pharmaceutical Care Management Association. (Also see "Medicare Part D Rebate Rule Delayed Until 2023 As PBMs Notch Legal Win" - Pink Sheet, 31 Jan, 2021.) The court also postponed the implementation of the part of the rule that would eliminate the anti-kickback safe harbor for rebates until 2023.
In terms of the Administration’s legislative agenda on drug pricing, Becerra could work to advance a version of the Grassley-Wyden bill, which includes price inflation rebates and a redesign of the Medicare Part D benefit that allows for a cap on beneficiary out-of-pocket spending and lower Medicare reinsurance costs in the catastrophic phase. That could be a relatively easy win since the bill had bipartisan support in the last Congress.
Becerra’s team is also likely to be involved in discussions about lowering drug costs in Medicare and Medicaid to offset major government spending in other areas, such as infrastructure.
A House Ways & Means Reunion
HHS has a new crop of former Capitol Hill staffers in its policy ranks who are well versed on legislation in the health care realm, including prescription drug pricing reform, that will help advance the Administration's agenda. Becerra himself brings more than two decades of experience in the House, including membership on the Ways and Means Committee, which oversees Medicare and Medicaid and was a key committee involved in writing the Affordable Care Act.
Another Ways and Means Committee veteran, Melanie Anne Egorin, was recently announced as assistant secretary of legislation at HHS. She served as deputy health staff director at Ways and Means for nearly six of her 10 years on the committee and has been a members of the professional tax staff. Prior to that, Egorin was a senior analyst at the U.S. Government Accountability Office, where she focused on a range of public payer health policy issues, including Medicare payment policy for novel technologies.
Centers for Medicare and Medicaid Services Administrator-nominee Chiquita Brooks-LaSure was a professional staff member on the Ways and Means Committee from 2007 to 2010 and worked with Becerra during that time. (Also see "As CMS Chief, Brooks-LaSure Could Turn Quickly To Medicare Drug Spending Reforms" - Pink Sheet, 18 Feb, 2021.) The CMS administrator position is subject to Senate confirmation and Brooks-LaSure’s nomination is expected to begin that process shortly.
The Senate Finance Committee’s top health staffer, Arielle Woronoff, is joining CMS as director of the Office of Legislation. In her past four years at the committee, Woronoff was the policy lead on drug pricing, Medicare Advantage and private market insurance issues. Before that, she spent two years as health counsel to the House Energy & Commerce Committee. (Also see "Senate Finance Drug Pricing Bill May Gain Traction As Panel’s Lead Health Staffer Joins CMS" - Pink Sheet, 16 Feb, 2021.)
The Administration’s choice to lead the Center for Medicare and Medicaid Innovation is also a well-known alumna of Congress and the ACA. Elizabeth Fowler served as top health staffer to the Finance Committee, which took the lead on authoring the law. (Also see "Medicare Drug Pricing Demonstration Agenda May Be Reshaped By Fowler As CMMI Head" - Pink Sheet, 1 Mar, 2021.)
CMMI is not dependent on legislation to develop payment reforms through demonstrations and in fact was established to create workarounds when Congress is unable to act. Nevertheless, Fowler’s ties to Congress could help shore up support for projects the organization chooses to pursue.
Fowler has already begun to revise the CMMI portfolio by withdrawing a last-minute addition to the Medicare Part D Payment Modernization Model that would have allowed plans to restrict coverage of drugs in the protected classes. (Also see "Medicare Part D Protected Classes Targeted in Last-Minute Payment Demo Update" - Pink Sheet, 21 Jan, 2021.) A revised request for health plan applications to participate in the demo in 2022 now excludes the protected classes change.
That is good news for biopharma. But as in the past, the Trump Administration’s effort to allows plans more leverage to negotiate prices in the protected classes failed because of concerns about restricting patient access to treatments and not in deference to manufacturer concerns. (Also see "CMS’ Likely Reversal Of Threat To Part D Protected Classes Doesn’t Mean Other Reforms Aren’t Coming" - Pink Sheet, 5 Mar, 2021.)
Next Up, FDA Commissioner
Becerra’s approval will likely spur progress on installing a commissioner of the Food and Drug Administration. The President has yet to announce a nominee to head the agency, leaving Center for Drug Evaluation and Review director Janet Woodcock at the helm in an acting basis.
Woodcock is also a candidate for the permanent job but has faced opposition from some Senate Democrats, which may be complicating the selection process. The Administration’s delay in nominating a new commissioner recently prompted six past commissioners to write the President urging him to move ahead with a candidate. (Also see "Former US FDA Commissioners Try To Shake Loose Biden Nomination" - Pink Sheet, 9 Mar, 2021.)
Although the letter did not specifically endorse Woodcock for the permanent role, two of the signatories have since publicly expressed support for her candidacy. (Also see "Former US FDA Commissioners’ Letter On Woodcock: Why This One Is Different Than Sharpless" - Pink Sheet, 12 Mar, 2021.)
Becerra received a letter from the Alliance for a Stronger FDA as soon as he was confirmed, urging him to “take swift action to nominate and seek prompt confirmation of a permanent commissioner.” The current leaders of the agency “are doing an excellent job, but there is no substitute for having a confirmed commissioner who can stand behind long-term commitments made to you, Congress and the American people,” the organization said.