Energy and Commerce committee unanimously approves FDA reauthorization

The House Energy and Commerce Committee voted unanimously—54 to zero—to approve H.R. 2430, the Food and Drug Administration Reauthorization Act of 2017 (FDARA), after a markup on June 7, 2017. The bill would reauthorize the FDA’s user fee programs for prescription drug, medical device, generic drug, and biosimilar biological products. Without the reauthorization, the use fee programs will expire at the end of September, 2017.

The FDARA would renew the FDA’s authority to collect user fees from the makers of prescription brand drugs, medical devices, generic drugs, and biosimilars. The fees account for more than one-fourth of the agency’s funding (see HELP committee advances FDA user fee agreements to Senate floor, May 12, 2017).

The bill passed the committee with six amendments, offered by: Chairman Greg Walden (R-Ore), Rep. Ryan Costello (R-Pa), Rep. Scott Peters (D-Calif), Rep. Mimi Walters (R-Calif), and Rep. Jan Schakowsky (D-Ill). Rep. Schakowsky offered two amendments. The amendments are designed to further the development of generic therapies, update approval and quality reporting requirements for medical devices, allow for risk-based classification of accessories, foster the development of medical device safety surveillance pilots, and encourage steps to lower the cost of prescription drugs.

Medicaid’s role in low income individuals access to mental health services

Medicaid plays a significant role in providing treatment for low income individuals with mental health conditions. Medicaid recipients usage of mental health services “is comparable to and sometimes greater” than usage among privately insured individuals, according to a Kaiser Family Foundation (KFF) analysis. In 2015, Medicaid covered 22 percent of nonelderly adults with mental illness and 26 percent of nonelderly adults with serious mental illness. KFF found that Medicaid coverage of mental health services is often more comprehensive than private insurance coverage.

Analysis Findings

The analysis (1) describes individuals with mental health conditions, and (2) compares the mental health needs and the receipt of services among individuals without insurance, with Medicaid, and with private insurance. KFF provided the following findings:

  • Characteristics of nonelderly adults with mental illness. Twenty percent of nonelderly adults have a mental illness. They are predominantly white, female, and under 50. Five percent have a serious mental illness. Most are employed (63 percent), but 4 in ten have low incomes and 22 percent are below poverty. In addition, nonelderly adults with mental illness often have co-morbid conditions.
  • Utilization of mental health services. Most nonelderly adults with mental illness have either Medicaid or private insurance. Those with Medicaid are more likely to receive treatment than those with private insurance or without insurance. In addition, the receipt of psychiatric medication is more common among those individuals covered by Medicaid.

The role of Medicaid expansion

The Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (HCERA) (P.L. 111-152), (together referred to as the Affordable Care Act (ACA)) expanded Medicaid coverage to millions of low-income Americans. Sections 2001 and 2002 of the PPACA as amended by 1004 and 1201 of HCERA enabled many low-income individuals with mental health conditions to obtain coverage and access treatment through state Medicaid programs that choose to expand.

KFF pointed out that the American Health Care Act of 2017 (AHCA) (H.R. 1628), introduced by Republicans and passed by the House of Representatives on May 4, 2017 would limit enhanced federal support for the expansion population. The Congressional Budget Office projected that the reduction in federal funds would result in a cut of $834 billion over 10 years. “A reduction in federal funds of this magnitude would likely cause states to decrease Medicaid payment rates, covered services, and/or eligibility, limiting states’ ability to reach people with mental health conditions,” KFF said.

HELP committee advances public health bills

Among a series of bills voted on by the Senate Health, Education, Labor and Pensions (HELP) committee on April 26, 2017 were bills focused on access to medications in emergency situations (Protecting Patient Access to Emergency Medications Act of 2017 (S. 916)) and hearing loss screening for children (Early Hearing Detection and Intervention Act (S. 652)). Also sent to the Senate floor were two other public health bills which would create a national commission on clinical care (S. 920) and better prepare the public health community for Zika and other mosquito-borne diseases (S. 849).

S. 916

The Protecting Patient Access to Emergency Medications Act seeks to amend the Controlled Substances Act to make it easier for first responders and those providing emergency medical services to have access to “time-sensitive and life-saving treatments.” The bill is sponsored by Sen. Bill Cassidy (R-La) and co-sponsored by Sens. Michael F. Bennet (D-Colo), Roy Blunt (R-Mo), and Al Franken (D-Minn).

S. 652

The Early Hearing Detection and Intervention Act is sponsored by Sen. Rob Portman (R-Ohio) and co-sponsored by Sens. Tim Kaine (D-Va), Sheldon Whitehouse (D-RI), John Cornyn (R-Texas, Sherrod Brown (D-Ohio), and Richard Blumenthal (D-Conn). The bill aims to improve state-based efforts to screen newborns, infants, and young children with hearing loss screening and link them to follow-up care if needed by amending sec. 399M of the Public Health Service Act. The Health Resources and Services Administration (HRSA), the Centers for Disease Control and Preventions, and the National Institutes of Health would need to coordinate and collaborate these efforts with those administering such programs as the Medicaid Early and Periodic Screening, Diagnosis and Treatment (EPSDT) program, for example.

Highlight on Alaska: FTC, DOJ back Alaska Senate’s move to eliminate certificates of need

Citing “considerable competitive concerns” raised by certificate of need (CON) laws, the Federal Trade Commission (FTC) and the Department of Justice (DOJ) issued a joint statement in support of Alaska Senate Bill 62 (SB 62), which would repeal Alaska’s CON program effective July 1, 2019. CON programs generally require firms to demonstrate an unmet need for services to the state before being permitted to enter the health care market, for example, by building a new hospital. Sen. David Wilson (R-Wasilla), who submitted the bill, applauded the statement, noting, “As government officials, we should not lose sight of a basic truth that competition improves the quality and lowers the costs of services; it’s what drives innovation and ultimately leads to the delivery of better healthcare.”

CON laws were enacted to reduce costs and improve access to care, based on the assumption that the existence of too many health care facilities in the same area could lead to inflated pricing for services. However, the FTC and DOJ opined that the laws create barriers to entry and expansion, allow entities to abuse the process to delay or halt competitors’ entry or expansion, and deny consumers effective remedies from anticompetitive mergers.

Alaska’s program requires parties wishing to spend at least $1.5 million on health care facility construction, alter an existing facility’s bed capacity, or add a category of health services provided to an existing facility to secure a CON after demonstrating that the quality, availability, or accessibility of existing health care resources is less than necessary “to maintain the good health of citizens of [the] state.” Specifically, it requires parties to submit an application with a fee ranging from $2,500 to $75,000.  The Department of Health and Social Services holds a public meeting and solicits comments and then submits a recommendation to the Commissioner of Health and Social Services, who makes the ultimate decision. Members of the public substantially impacted by the CON may initiate administrative proceedings and eventually seek judicial review.

The agencies stated that the existing state law raises both the monetary and time-based costs of entry and expansion, eliminates or reduces competitive pressure that normally incentivizes firms “to innovate, improve existing services, introduce new ones, or moderate prices,” and, in the event of denials, prohibits entry or expansion.  Furthermore, the law allows incumbent firms to drag out the CON application process by filing challenges or comments in order to delay competitors’ entry into the market. It also provides a platform that allows firms to form anticompetitive agreements–for example, two firms could agree to file CON applications for separate services to avoid a lengthy application process and potential challenges from one another. Finally, the existing law could impede antitrust remedies. As an example, the joint statement cited to the case of FTC v. Phoebe Putney.  Although the Supreme Court eventually ruled that an anticompetitive merger was subject to antitrust scrutiny, the entities involved had already merged and the applicable state’s CON laws made divestiture “virtually impossible.”