President Donald Trump delivered his first State of the Union address Tuesday night, highlighting policy goals while welcoming a “new American moment.”
Over the course of 90 minutes, Trump discussed several healthcare-related legislative achievements, including adjustments to the Affordable Care Act as well as new care accountability measures for the Department of Veterans Affairs (VA).
Below are five key takeaways from the president’s speech to Congress:
1. ‘The individual mandate is now gone.’
Trump touted the repeal of the individual mandate penalty, calling the eliminated provision “an especially cruel tax.”
The measure, which required Americans without health insurance to pay a fine, was removed as part of the tax reform bill passed late last year.
The penalty is $695 or 2.5% of an individual’s income, whichever amount is greater, and remains in effect for 2018. The elimination will take place next year.
Though Trump did not call for a renewed effort to repeal the ACA in its entirety, he said the Republican-controlled Congress successfully repealed “the core of disastrous Obamacare.”
2. No mention of upcoming funding deadline or community health centers.
Trump did not acknowledge the recent six-year extension granted to the Children’s Health Insurance Program (CHIP), which was part of the continuing resolution that reopened the government last week after a three-day shutdown.
There was also no mention of the February 8 deadline to pass another continuing resolution or pass an omnibus budget package. Such action would likely have to address the fate of over 10,000 community health center (CHC) sites across the country. Federal funding for CHCs lapsed on October 1, so they have been funded by temporary spending packages since then.
Despite the next deadline coming in little more than a week, Trump did not speak on the issue last night.
3. Will call for unity result in bipartisan solutions?
The president’s speech centered on a call for unity among Americans and members of Congress alike. Such bipartisanship will be important in order to avoid a second government shutdown in as many months and to address lingering healthcare policy concerns.
There are two bills in the Senate with bipartisan cosponsors seeking to stabilize the federal insurance exchange markets: Alexander-Murray and Collins-Nelson. Trump’s call for bipartisanship in the final crafting and debate over these measures will play a role in determining their road to passage.
Newly confirmed Health and Human Services Secretary Alex Azar applauded the speech in a statement released late Tuesday night.
“I commend President Trump for delivering a speech that celebrated the economic boom we have seen under his leadership, which has brought new opportunity and prosperity to the American people,” Azar said. “A healthier economy means a healthier America, and we look forward to more such success in the coming year, including through reforms to make healthcare more affordable and accessible for all Americans.”
4. Reduce price of prescription drugs, endorse “right to try.”
Continuing with a campaign promise to lower prescription drug costs, Trump said the FDA is following his administration’s lead to approve more generic drugs and medical devices.
“One of my greatest priorities is to reduce the price of prescription drugs,” Trump said. “In many other countries, these drugs cost far less than what we pay in the United States. That is why I have directed my Administration to make fixing the injustice of high drug prices one of our top priorities. Prices will come down.”
Trump also urged Congress to take up the issue of the “right to try,” a policy allowing terminally ill patients to access experimental treatments without having to leave the U.S.
“President Trump says reducing price of prescription drugs is one of his highest priorities,” tweeted Bob Doherty, senior vice president for government affairs and public policy at the American College of Physicians. “Doctors and patients certainly hope so and will be glad to do their part.”
5. Signed VA healthcare accountability bill into law.
Trump promised to ensure veterans have a choice in their healthcare decisions, after reports of substandard care at VA medical facilities surfaced in recent years.
In June, Trump signed the VA Accountability Act, which eased restrictions on removing employees who were accused of wrongdoing while also protecting whistleblowers.
The president said the VA has already fired more than 1,500 employees who “failed to give our veterans the care they deserve.”
VoteVets, a progressive veterans advocacy group, criticized Trump’s remarks Tuesday night. The organization highlighted the push by Republican lawmakers to cut $1.7 trillion from federal healthcare programs, which 1.75 million veterans rely on for coverage.
Key House Republicans are warming to a proposal aimed at bringing down ObamaCare premiums, raising the chances of legislative action this year to stabilize the health-care law.
House GOP aides and lobbyists say that top House Republicans are interested in funding what is known as reinsurance. The money could be included in a coming bipartisan government funding deal or in another legislative vehicle.
Any action from Republicans to stabilize ObamaCare would be a major departure from the party’s long crusade against the law, but after having failed to repeal the Affordable Care Act last year, the discussion is shifting.
Rep. Ryan Costello (R-Pa.) is one of the leaders of the push in the House and is sponsoring a bill to provide ObamaCare stability funding in 2019 and 2020. He notes the relatively short-term nature of his measure.
“That reflects the political reality that we are not going to be doing some large, sweeping health-care bill in the next year,” said Costello, who faces a competitive reelection race this year.
“I am optimistic that it would be under serious consideration for inclusion in the omnibus,” he added.
Speaker Paul Ryan (R-Wis.) noted the possibility of action on an ObamaCare stability measure, particularly funding for reinsurance, at an event in Wisconsin in January, saying he thought there could be a “bipartisan opportunity” on the issue.
Action on the reinsurance payments is far from certain; conservative opposition to what some view as a bailout of ObamaCare insurers could stop the proposal in its tracks. But there is growing momentum for the idea, and Republicans said the proposal would likely be discussed more at the GOP retreat this week in West Virginia.
The push on reinsurance matches up with one of the ObamaCare bills that Sen. Susan Collins (R-Maine) has been pushing in the Senate.
Senate Majority Leader Mitch McConnell (R-Ky.) gave Collins a commitment to support a reinsurance bill as well as another stability measure from Sens. Lamar Alexander (R-Tenn.) and Patty Murray (D-Wash.) in exchange for Collins’s support for tax reform in December.
Opposition in the House has always been the major impediment to those measures moving forward. But it now appears some of that resistance is softening, at least on the reinsurance measure, now that Republicans have repealed ObamaCare’s individual mandate through the tax bill.
Importantly, House Energy and Commerce Committee Chairman Greg Walden (R-Ore.), whose panel has jurisdiction, is supporting the ObamaCare stabilization efforts and backs Costello’s bill.
“Chairman Walden is supportive of Rep. Costello’s efforts to help states repair their insurance markets that have been damaged by Obamacare,” an Energy and Commerce spokesperson wrote in an email. “Rep. Costello’s bill is a fair approach to granting states greater flexibility to help patients and lower costs.”
Rep. Cathy McMorris Rodgers (R-Wash.), the fourth-ranking Republican in House leadership, is also a co-sponsor of Costello’s stabilization bill.
While House conservatives have opposed propping up ObamaCare, Rep. Mark Meadows (R-N.C.) did not dismiss the payments out of hand on Tuesday.
“If it lowers premiums, I’m willing to listen to any ideas,” said Meadows, who is chairman of the House Freedom Caucus.
He warned that he did not want a proposal to be an “insurance bailout,” but noted that he has been talking to colleagues in the House and Senate about the issue.
Another obstacle for an ObamaCare fix is a dispute over abortion. Republicans are adamant that a stabilization measure must include restrictions on the new funding being used to cover abortion services, a notion that is problematic for Democrats.
Reinsurance funding is used to help insurers cover the costs of especially sick patients, which helps relieve pressure on premiums for the broader group of enrollees.
The other main stabilization measure, from Alexander and Murray, would fund ObamaCare payments that reimburse insurers for giving discounts to low-income enrollees, known as cost-sharing reductions (CSRs).
Republican sources say there is less momentum in the House for funding CSRs than there is for the reinsurance measure. But even some Democrats are now questioning whether funding CSRs still makes sense, given that through a quirk in the law, President Trump’s cancellation of the payments last year actually led to increased subsidies and lower premiums for many enrollees.
Rep. Phil Roe (R-Tenn.), for example, a leading House Republican on health-care issues as co-chairman of the GOP Doctors Caucus, said Tuesday that he feels negatively about the idea of funding CSRs but likes the idea of reinsurance.
Roe pushed back on the idea that the funding would be propping up ObamaCare, saying that the repeal of the individual mandate had changed the discussion because people no longer were forced to buy coverage.
Roe said he runs into people in his district paying more than $1,000 per month in premium costs.
“We’re going to have to do something,” he said.
Congress is considering including bipartisan legislation that could expedite the availability of lower-priced generic drugs in its must-pass bill to fund the federal government in 2018. The legislation, called the CREATES Act, tackles one of the numerous problems driving high drug prices — brand-name drug manufacturers’ use of anticompetitive tactics to block access to generic drugs — that we describe in our report, Getting to the Root of High Prescription Drug Prices: Drivers and Potential Solutions. If passed, the CREATES Act, which has bipartisan support, would increase the development and availability of generic drugs by addressing anticompetitive behaviors of certain brand-name manufacturers that use limited distribution systems and congressionally mandated risk-mitigation programs as a way to delay generic drug development. And because the Act could save the federal government more than $3 billion over 10 years, it could help pay for other necessary federal spending, including funding for community health centers.
The Drug Price Competition and Patent Term Restoration Act of 1984 — commonly referred to as the Hatch-Waxman Act — created the generic drug market in order to balance incentives for innovation (i.e., extended patent terms and market exclusivity protections) with a system that ensures safe, therapeutically equivalent generic drugs are available at lower prices when patents and exclusivities expire. Before a generic drug can be approved by the Food and Drug Administration (FDA) it must demonstrate that it is bioequivalent to the brand-name drug it intends to compete against on the market.
The Food and Drug Administration Amendments Act of 2007 authorized the FDA, when there are safety concerns like increased toxicity or risk factors, to require manufacturers to adhere to a Risk Evaluation and Mitigation Strategy, or REMS. A REMS program can have four components: patient information, communication plan, elements to assure safe use (ETASU), and implementation system.
Some brand-name drug manufacturers have misused REMS programs to block generic drug manufacturer access in two different ways. First, a brand-name manufacturer may prevent a potential generic competitor from getting access to samples for bioequivalence testing by using the REMS program with ETASU to limit who can access or purchase the drug. More than half of drugs with REMS programs have limited distribution, which restricts access for generic manufacturers. Without access to samples of brand-name products, generic manufacturers cannot conduct bioequivalence testing, which is required for FDA approval of a generic.
Second, if a brand-name drug is subject to an FDA-mandated REMS, then the generic competitor drug is also.1 Shared REMS programs are generally required by statute to be implemented for the brand-name drug and the generic versions. Negotiations between manufacturers for a shared REMS program include confidentiality, product liability concerns, antitrust concerns, and access to a license for REMS program elements that are patented. Brand-name manufacturers can intentionally delay establishing a single, shared REMS program, which blocks the generic drug from the market. As of January 26, 2018, 10 of the 72 REMS programs were shared.
In addition to FDA-mandated REMS programs, manufacturers may voluntarily institute a REMS program or create a limited distribution system to control who may access their drug by allowing dispensing from a limited number of specialty pharmacies. For example, an investigation by the Senate Aging Committee found that Turing Pharmaceuticals put a limited distribution system into place in order to block competitors’ access to samples and significantly increase the drug price. (Daraprim was not subject to an FDA-mandated REMS program.) The anticompetitive behaviors associated with REMS programs and limited distribution systems are estimated to cost patients more than $5 billion each year.
The CREATES Act would enable a generic manufacturer facing one of these delay tactics to bring an action in federal court for injunctive relief (i.e., to obtain the sample it needs, or to enter into court-supervised negotiations for a shared safety protocol). The CREATES Act would expedite legal review and change the burden from proving a violation of antitrust law to one in which the generic manufacturer would need to only prove that sufficient quantity of samples were being withheld by the brand-name manufacturer. In addition, the CREATES Act would permit the generic manufacturer to work with the FDA to establish its own REMS with ETASU that are comparable to the brand-name manufacturer’s REMS program.
The Congressional Budget Office (CBO) has not officially scored the CREATES Act, but has estimated that similar legislation would save the federal government more than $3 billion over 10 years.2
Taking these steps to counter brand-name manufacturer tactics to delay generic competition could help address one of the factors driving high prescription drug prices. Such action also may serve as an important opening for further conversations on how we can regain the balance of incentives for drug innovation and competition that was established under the Hatch-Waxman Act.
Congress has knocked one big item off of its health care to-do list, but there are some other controversial issues lawmakers will need to tackle.
The Children’s Health Insurance Program was funded for six years in the stopgap government funding bill that keeps the government open until Feb. 8, but another major health-care program needs to be extended as well: funding for community health centers.
That is one of the items that could get wrapped up in a future government funding bill, either ahead of the Feb. 8 deadline or in a longer-term spending bill down the road.
Democrats have started hammering home the need for community health center funding.
“I’m very glad we were able to pass the extension of children’s health care, but now we need to work together to tackle those other critical health care issues that Republicans have now allowed to expire, because there’s no excuse for leaving families wondering whether their local health care center will shut its doors,” Sen. Patty Murray (D-Wash.) said on Tuesday.
House Energy and Commerce Committee Chairman Greg Walden (R-Ore.) has pushed back on the idea Republicans are to blame, noting that community health center funding was in a bill House Republicans passed in November but that the Senate did not take up.
“Republicans support community health centers and are continuing to work to fund the program for the long term,” Walden wrote in Morning Consult. “I know the ongoing debates have not been easy on the workers at these facilities and the families that rely on them for vital medical care, and I share their frustrations.”
On Monday, the Senate will hold a vote on a bill to ban abortions after 20 weeks of pregnancy, a major priority for anti-abortion groups. The bill is not expected to be able to get the 60 votes needed to advance, but it could pose a tough vote both for some red state Democrats and for Republicans who support abortion rights.
Sens. Susan Collins (R-Maine), Lamar Alexander (R-Tenn.), and top Democrats are also pushing to pass a pair of bipartisan ObamaCare fixes aimed at stabilizing markets and bringing down premiums.
Those measures are opposed by House conservatives, but Speaker Paul Ryan (R-Wis.) has shown some openness to at least one of the bills, which provides funding known as reinsurance to bring down premiums.