Senate Aging Committee Releases Report on Generic Drug Price Increases

House Republicans Advancing Regulatory Legislation This Week

Senate Begins Confirmation Process for Trump’s Cabinet

Nomination and Confirmation Tracker

 

Senate Aging Committee Releases Report on Generic Drug Price Increases

On December 21, 2016, the Senate Special Committee on Aging released a bipartisan report, entitled, “Sudden Price Spikes in Off-Patent Prescription Drugs: The Monopoly Business Model that Harms Patients, Taxpayers, and the U.S. Health Care System.” The report is the culmination of the Committee’s investigation, started in November 2015, into price spikes in long off-patent generic prescription drugs. The investigation focused on four companies, including Turing Pharmaceuticals, which was formerly led by Martin Shkreli, as well as Valeant Pharmaceuticals, Retrophin, and Rodelis Therapeutics. Importantly, the report differentiates between this issue and the larger debate on prescription drug pricing.

The investigation found that these companies had a similar business model that involved acquiring off-patent generic prescription drugs and then price gouging, to the detriment of patients, providers, and taxpayers. These companies selected drugs to acquire based on criteria of the drug having a single supplier, the drug being the gold standard for patient care that would make providers hesitant to recommend alternatives, and the drug having a small patient population to minimize public relations problems and opportunities for competition. These companies also limited distribution of these drugs in order to prevent potential competitors from obtaining the necessary samples for approval of alternative generics by the Food and Drug Administration (FDA).

The report found that these companies were exploiting a market failure, and the report provides policy options for how to remedy this failure and address regulatory hurdles at the FDA. Among the potential policy options, the committee suggested enacting legislation to improve the generic drug approval process at the FDA; enacting legislation addressing access to generic drug samples for competitors; allowing highly targeted temporary drug importation to combat price increases in order to provide immediate relief; preventing the abuse of patient assistance programs and copay coupons; having the Federal Trade Commission take a greater role in the pharmaceutical market; and improving transparency in drug pricing.

For the 115th Congress, the bipartisan nature of the report could help some of these recommendations find traction. In particular, framing the issue as a market failure in need of correction as well as an opportunity to reform the FDA could garner bipartisan support, along with support from some pharmaceutical stakeholders. Addressing these egregious examples of price-gouging may be used as a concession by the pharmaceutical industry to reduce pressure on other aspects of the drug pricing debate.

House Republicans Advancing Regulatory Legislation This Week

With the start of the 115th Congress, House Republicans are advancing legislation this week to allow Congress to exert greater influence and oversight over the Executive Branch’s rulemaking process. The House is expected to vote on H.R. 26, the Regulations from the Executive in Need of Scrutiny (REINS) Act, introduced by Rep. Doug Collins (R-GA). In addition, on January 4, 2017, the House approved H.R. 21, the Midnight Rules Relief Act, introduced by Rep. Darrell Issa (R-CA), by a vote of 238 to 184. The REINS Act would require Congress to approve major rules before they can take effect. The Midnight Rules Relief Act would allow Congress to disapprove of multiple final rules at once, expediting the existing process of the Congressional Review Act (CRA), and potentially allowing for the reversal of numerous Obama administration rules. On January 3, 2017, the 114th Congress adjourned sine die, moving the target date for regulations to be blocked through the CRA’s procedures to June 13, 2016, according to the Congressional Research Service’s calculation.

While House Republicans are eager to see these bills enacted, it is unclear how much traction they would have in the Senate, where they face a certain filibuster. If either bill were to be considered, the REINS Act has the better chance of attracting support from Democrats, if only to seize the opportunity to potentially block Trump administration regulations. While both bills allow for expedited consideration through the Senate of approval and disapproval resolutions of final rules, Senators may be hesitant to create a barrier to implementing future rules, particularly considering that divided government will one day return. In addition, requiring Congressional approval of regulations could undermine the Executive Branch’s ability to govern. Finally, Congress may also not want to give up its ability to pin blame on the Executive Branch for rules containing unpopular provisions or payment cuts; having to approve major rules puts the blame squarely back on Congress.

Senate Begins Confirmation Process for Trump’s Cabinet

In preparation for President-elect Trump’s inauguration on January 20, 2017, the Senate has begun the process of reviewing cabinet nominations for potentially immediate confirmation. (Scroll down for a full list of current nominees, as well as announced or expected hearings dates)

Since being nominated, Trump’s nominees have begun submitting background information to the relevant committees and meeting with individual Senators. Committees of jurisdiction have also begun scheduling confirmation hearings. After confirmation hearings are held, the committee of jurisdiction will vote on whether to advance the nomination to the full Senate. While approval is expected in most instances, the narrow Republican majority in the Senate could give a few Senators leverage to block certain nominees in committee. Once a nomination has advanced to the full Senate, only 51 votes are needed to approve the nomination, following the precedent set by Democrats in 2013 to weaken the filibuster for Executive Branch and Judicial Branch nominations (Supreme Court Justices are still subject to a 60 vote threshold).

While Presidents are often given deference to choose their own team, Democrats have expressed mixed opinions on many of Trump’s nominees. Eight nominees in particular are expected to receive significant scrutiny and opposition, including: Tillerson (State), DeVos (Education), Mnuchin (Treasury), Pruitt (EPA), Mulvaney (OMB), Price (HHS), Puzder (Labor), and Ross (Commerce). Furthermore, Tillerson is expected to face tough questions from Republicans over his ties to Russia.

As the confirmation process moves forward and nominees are vetted, it is highly likely that some nominees will withdraw from consideration. In 2009, tax issues sunk some of President Obama’s nominees, but the majority of his cabinet was in place by the end of January. Debate over confirming Trump’s nominees is expected to consume most of the Senate’s floor time in January.