As US House Changes Hands, CMS May Face More Oversight Than FDA
Executive Summary
Key Republican committee chairs on health issues are familiar faces, largely supportive of the US FDA’s approach to drug regulation. Implementation of the new pricing law, however, will get a lot more scrutiny.
Republican control of the House will transform the agenda for oversight of the biopharma-related policy issues, with the Centers for Medicare & Medicaid Services likely to face more pressure than FDA.
Major media outlets have now declared Republicans the winner in 219 of the House races, enough to secure the majority for the next Congress. The final split of the House is yet to be determined, but Republicans are likely to wind up with a narrow majority similar to the Democratic party’s current 220-213 majority (with two vacant seats).
The GOP majority is pledging to make oversight and investigations of the Biden Administration its primary focus. Using the power of the gavel to drive headlines is standard practice for an opposition party heading into a Presidential election cycle. That focus will likely be intensified by the challenges inherent in managing a narrow majority and a fractured GOP caucus, where even partisan messaging bills may be tough for the leadership to pass.
The key committee for most biopharma policy-related oversight will be run by familiar faces. The change in control will elevate Washington’s Cathy McMorris Rodgers to chair of the House Energy & Commerce Committee. Kentucky’s Brett Guthrie is in line to chair the E&C Health Subcommittee with Virginia’s Morgan Griffith in line to chair the Oversight Subcommittee.
The E&C Committee has a long track record of bipartisan legislative work, including developing an FDA user fee reauthorization package that incorporated a long list of bipartisan policy riders and passed out of committee unanimously. (Also see "House User Fee Mark-Up: Few Tweaks, But Concerns About ALS And Accelerated Approval" - Pink Sheet, 18 May, 2022.)
That bipartisan history means that the tone of the E&C oversight work may not be as strident as in some other parts of the House, particularly since top Democrats (including New Jersey’s Frank Pallone and California’s Anna Eshoo) are expected to stay as ranking minority members. At least some of the oversight agenda may be bipartisan in nature.
IRA Implementation Will Be Important Oversight Theme
The biggest change in tone will likely come on drug pricing related topics. As a result, CMS may find itself more often in the hot seat at Energy & Commerce than FDA will – and the panel could prove invaluable in helping the biopharma industry prepare for implementation of the drug price negotiation provisions enacted as part of the Inflation Reduction Act in 2022.
The IRA was a purely partisan bill, moving through the House without any Republican support. That makes it a clear target for aggressive oversight by the new GOP majority, since they can come at it from a position of long-standing opposition.
While GOP legislators have already introduced bills to repeal some or all of the drug pricing provisions in the IRA, there is no chance of enactment of a repeal unless or until the GOP recaptures both chambers and the White House. Even then the dynamics of pricing politics have changed to the point where it might well depend on which Republican is elected President. (Also see "Republican Leaders In Congress Want To Undercut Drug Pricing Law: What’s The Opportunity?" - Pink Sheet, 8 Nov, 2022.)
Still, having GOP oversight during most of the key implementation periods will be extremely important for innovator companies. It should ensure some degree of transparency – and potentially an ability to shape key decisions – that might otherwise be lacking, given that the IRA permits CMS to implement the price negotiation model without full notice-and-comment rulemaking.
The new E&C leadership has already alerted CMS to its key interest areas in the implementation process, sending a lengthy list of questions to the agency in September. For biopharma companies, having those types of questions answered in public may provide valuable time to anticipate and prepare for the first cycles of price negotiation. (Also see "US House Republicans Launch Oversight Of Medicare Price ‘Negotiation’ Program" - Pink Sheet, 31 Aug, 2022.)
In the longer run, the oversight process in 2023-2024 will go a long way towards determining whether a repeal strategy is viable. The GOP will be trying to build a case that the IRA will significantly harm innovation; if the theme plays well in the coming months it is more likely to carry forward as part of the Republican case to voters heading into the 2024 election.
CMS is also likely to face more immediate pressure to revisit its restrictive coverage policy on beta amyloid Alzheimer’s therapies. E&C Republicans have loudly criticized the Medicare agency’s decision to essentially non-cover Biogen, Inc.’s Aduhelm (aducanumab-avwa) as an unacceptable overreach.
Indeed, the GOP’s “Healthy Futures Task Force” highlighted the action as a priority within weeks of the finalization of the policy in April. (Also see "Medicare Premiums and Aduhelm: The Political Headache Continues" - Pink Sheet, 7 Apr, 2022.)
In stating its goal to “expand and speed up Medicare coverage for breakthrough drugs and devices” in general, the GOP task force declared that “the Biden Administration has recently rejected the FDA’s gold standard approval by significantly restricting patients’ access to the first new Alzheimer’s drug in almost two decades. Republicans would prevent bureaucrats from overruling doctors’ decisions and remove barriers patients face to medical innovation.”
While it is probably too late for any policy change to save Aduhelm as a commercial entity, the E&C leadership change is well-timed to apply pressure for CMS to reconsider in light of the positive data reported for the likely next entrant in the class: Biogen/Eisai Co., Ltd.’s lecanemab. (Also see "Medicare And Lecanemab: House Republicans Lack ‘Proactive’ Plan For Ensuring Coverage" - Pink Sheet, 18 Nov, 2022.)
FDA Out Of The Hot Seat – Mostly
The GOP critique of the Aduhelm policy as undermining the FDA “gold standard” is also noteworthy as a signal that FDA remains broadly supported by Republicans. However, the agency will still face oversight – with regulation of the abortifacient RU-486 a potentially thorny topic.
Abortion rights was of course a critical theme of the midterm election cycle in light of the Supreme Court ruling overturing Roe v. Wade. Even before that decision, Republicans have been pressing FDA to enforce restrictive access controls on RU-486, with the issue becoming a significant challenge to the confirmation of Commissioner Robert Califf in the Senate. (Also see "Califf Limps Toward FDA Commissioner Confirmation" - Pink Sheet, 14 Feb, 2022.)
Given the efforts by both parties to build support around reproductive rights policy positions, FDA’s review of a potential OTC switch for oral contraceptives could also become a flash point. The agency had scheduled an advisory committee review for the Perrigo Company PLC Opill application for 18 November. However, that meeting was postponed after FDA requested additional information from the sponsor.
If FDA reschedules the meeting as promised, it will likely come soon after Republicans have taken control of the House in the new year. (Also see "Opill AdCom Delay Not Unusual – Will Evaluation Of US OTC Switch Proposal Continue In The Norm?" - HBW Insight, 2 Nov, 2022.)
FDA’s opioid policy response is another potential area of oversight, though Republicans tend to prefer to shape the issue in terms of border policy and trade. FDA’s role in supporting domestic manufacturing and reliable supply chains for critical medicines will also remain a hot topic – one that has already had bipartisan attention.
Overall, though, FDA may be in for a tougher oversight climate in the Democratic-held Senate, given the elevation of Vermont’s Bernie Sanders to become chair of the Health Committee. (Also see "Status Quo Senate Still Means Big Changes For FDA Oversight" - Pink Sheet, 17 Nov, 2022.)