Chart of the Week
Congress.
USTR Waiver of Vaccine IP. Katherine Tai, the U.S. Trade Representative defended the Biden administration’s decision to engage in negotiations with the WTO on waiver of IP protections for COVID-19 vaccines. The trick of understanding this bit of political choreography is that the USTR is only defending her right to act as a member of the WTO to debate and negotiate a temporary waiver of IP protections. Congress, it seems, would need to approve such a waiver and, in the Senate anyway, there does not appear be much interest in that. German Chancellor Angela Merkel’s announcement that Germany would oppose the move almost assures the issue will drop off the front pages in short order. (PFE, MRNA, JNJ)
Drug Price Legislation. We have been highly skeptical that any major drug price legislation would move forward, except for a redesign of Medicare Part D. In a coded message to Speaker Nancy Pelosi, a group of 10 moderate Democrats urged “bipartisan, bicameral” legislation focused on affordability not prices. Generally speaking, asking for a unicorn is the same as saying you plan to oppose legislation does not include one. With inflation taking off – assuming you are not in the transitory camp – the bill is outdated. Drug prices have a shot at increasing at a rate below inflation for the first time in years.
Food and Drug Administration Jurisdiction over LDTs. House Democrats on the Energy and Commerce Committee are pressing Health and Human Services Secretary Xavier Becerra on reinstating the Food and Drug Administration’s jurisdiction over Laboratory Developed Tests that was revoked under the Trump administration. Without a confirmed Commissioner at the FDA the call is a tough one. Meanwhile CLIA labs proliferate to handle point of care testing of COVID-19 and very likely other things as the consolidation of laboratory testing goes in reverse. (DGX, LH, DHR)
Getting Ahead of Medicare Cuts. A danger we have flagged a few times in the last several months has been Medicare’s pending insolvency problem and the need to (eventually) offset budgetary impacts of the American Rescue Plan Act. The last frontier for Medicare savings is in the area of post-acute care. Industry knows and appears to be trying to get ahead of the problem. They have a bill introduced and a “dear colleague” letter of support circulating. The prospects for the bill are not bright, like most legislation these days, but the best defense is a good offense, as they say. (AMED, LHCG, EHC, SEM)
COVID-19 Response. The Centers for Disease Control and Prevention, NIH, FDA and NIH were on Capitol Hill this week to discuss and defend the COVID-19 response. While Sen. Rand Paul’s exchange with Dr. Anthony Fauci of NIH received the most press, it was Sen. Susan Collins who effectively took the CDC to task for guidance, widely derided by the scientific community, on mask wearing, especially at summer camps. She called that agency’s guidance “conflicting, confusing and…undermines public confidence.” A couple of days later, the White House appeared to agree.
Hearings Next Week.
House Committee on Oversight and Reform Unsustainable Drug Prices (Part III): Testimony from AbbVie CEO Richard Gonzalez Tuesday, May 18th, 2021 at 10:00 A.M. (ABBV)
House Committee on Oversight and Reform, Select Subcommittee on the Coronavirus Crisis Examining Emergent BioSolutions’ Failure to Protect Public Health and Public Funds Wednesday, May 19th, 2021 at 10:30 A.M. (EBS)
Senate Committee on Finance COVID-19 Health Care Flexibilities: Perspectives, Experiences, and Lessons Learned Wednesday, May 19th, 2021 at 10:00 A.M. (TDOC, AMWL,GDRX)
Senate Committee on Homeland Security and Government Affairs COVID-19 Part II: Evaluating the Medical Supply Chain and Pandemic Response Gaps Wednesday, May 19th, 2021 at 2:30 P.M.
Senate Committee on the Judiciary, Subcommittee on Competition Policy, Antitrust, and Consumer Rights Antitrust Applied: Hospital Consolidation Concerns and Solutions Wednesday, May 19th, 2021 at 2:30 P.M.
Senate Committee on Health, Education, Labor and Pensions, Subcommittee on Primary Health and Retirement Security A Dire Shortage and Getting Worse: Solving the Crisis in the Health Care Workforce Thursday, May 20th, 2021 at 10:00 A.M. (AMN)
The White House.
Mask Mandates. On Thursday, a mere two days after CDC Director Dr. Rochelle Walensky defended mask guidance before the Senate HELP Committee, the White House announced that fully vaccinated people did not need to wear masks indoors or out. The scientific community, including former FDA Commissioner Scott Gottlieb, had been very outspoken about the imposition of mask guidance in the face of slowing penetration of vaccine administration. The White House eventually came around.
340B and Site Neutral Reimbursement Cuts. The White House has taken up the cause of the Trump administration and asked the Supreme Court not to hear cases from the hospital associations seeking to overturn a Court of Appeals decisions supportive of Trump administration policy. The policy has negative implications for nonprofit hospitals, especially large research medical centers but levels the competitive playing field between them and for-profit providers ineligible for 340B discounts. (HCA, THC, CYH)
Regulatory Agenda.
Medicare Rule-A-Rama. The second tranche of Medicare payment rules are pending at the White House’s Office of Management and Budget. These are:
- Physicians Fee Schedule for 2022 and “other revisions to Medicare Part B”
- CY 2022 Home Health annual payment update
- CY 2022 ESRD annual payment update
- CY 2022 Hospital Outpatient annual payment update
This afternoon, CMS released a rule delaying the effective date of the Medicare Coverage Innovative Technology (MCIT) and definition of “reasonable and necessary.” The new effective date is Dec. 15, 2021. The rule, recall, establishes a new guaranteed pathway for Medicare reimbursement for four years for those devices – and include in device, in vitro tests like Grail’s liquid biopsy. Importantly, the Biden administration made no changes to the policy but gave everyone more time to prepare.
ACA Exchange Open Enrollment. HHS released updated figures on the Special Enrollment Period now underway for ACA Exchange Plans. As of May 11, 1 million people had enrolled.
Other Stuff.
More Money. HHS is preparing to release the last bit of provider relief money, something on the order of $25B plus $8B for rural providers. Members of Congress are urging the administration to allow more time to spend the relief funds – preferably until the end of the Public Health Emergency at the end of 2021. If the administration concurs, it will be a positive for THC and others that did not return funds which could be used to defray higher labor costs.
Public Health Infrastructure. The White House announced release of $7B to state and local public health departments for workforce development, data scientists
SPAC and S-1 Corner.
Progress made this week on VGAC’s acquisition of 23andMe. They set their shareholder meeting for June 10. CAPA filed an amendment to S-4, so things are moving along there as well. Same goes for FCAC’s acquisition of Sharecare.
You can access the updated SPAC spreadsheet here.
If you are investing in SPACs but not super familiar with health care, hit and we can help.
Upcoming Events
Next Thursday at 12:30 p.m. ET we will be taking a look at the spate of SPACs and IPOs focused on primary care. “Roll-up, blow-up or “This Time is Different?” Add to Outlook calendar.
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Emily Evans
Managing Director – Health Policy
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