Drug Pricing EO Expected in Coming Weeks and Legislative Activity

The White House is working to prepare an executive order (EO) aimed at lowering drug prices. The President met with HHS Secretary Tom Price and Office of Management and Budget (OMB) Director Mick Mulvaney to discuss the order, which could be released before the Fourth of July congressional recess. Executive orders cannot change the law, but they can direct agencies to pursue certain regulatory actions. Potential policies that could be a part of the order include pursuing value-based purchasing contracts for drugs in federal health programs, or strengthening the intellectual property rights of pharmaceutical companies.

Sen. Ron Wyden (D-Ore.) has introduced legislation aimed at preventing price gouging in the pharmaceutical market. The SPIKE Act would require manufacturers to submit a price justification to the HHS Secretary. The justification would also be made public. The bill would require HHS to notify the company if their product costs at least $10 and experiences a price increase of 300 percent or more over a five year period, a 100 percent increase annually, or if the drug is included in the top 50th percentile of net drug spending in Medicare or Medicaid and has had a price increase of 50 percent or more.

Sens. Sherrod Brown (R-Ohio) and Kirsten Gillibrand (D-N.Y.) have also introduced a bill that would require drug companies to report and justify price increases. The Stop Price Gouging Act includes an Internal Revenue Service (IRS)- enforced penalty should the manufacturer increase the price by more than medical inflation but less than 15 percent, with the penalty equal to 50 percent of the profit. If the price increase is more than 20 percent, the penalty would increase to 100 percent of the profit. Revenues would be put toward drug research and development at the National Institutes of Health (NIH).

Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee Lamar Alexander (R-Tenn.) has announced plans to hold two more hearings on the topic of prescription drug costs. The first in the series of hearings was held last week, and featured academic witnesses discussing how the drug delivery system affects what patients pay. The Committee will hold a second hearing on the manufacturing and development process. The third hearing will cover a forthcoming report from the National Academy of Sciences on ensuring patient access to affordable prescription drugs.

Trump Administration Staff Announcements

The U.S. Department of Health and Human Services (HHS) Office of Intergovernmental and External Affairs announced the filling of several leadership roles last week. Renee Elmers, a former N.C. congresswoman, will serve as regional director. Kyle McGowan, former staff for Tom Price during his time in Congress, will serve as director of external affairs. Darcie Johnston, a former Vermont official for the Trump campaign, will serve as director of intergovernmental affairs. The White House has nominated Elinore McCance-Katz as assistant secretary for mental health and substance use at HHS. She was the first chief medical officer for the Substance Abuse and Mental Health Services Administration (SAMHSA), joining in 2013. The President has also named Norman E. Sharpless as head of the National Cancer Institute (NCI). Sharpless is currently is the director of the University of North Carolina Lineberger Comprehensive Cancer Center.

Upcoming Congressional Hearings and Meetings

Senate Appropriations Subcommittee on Agriculture, Rural Development, Food and Drug Administration Review of the FY2018 Food & Drug Administration Budget Request; 10:30 a.m., 192 Dirksen Bldg.; June 20

Senate Foreign Relations Subcommittee on Multilateral International Development, Multilateral Institutions, and International Economic, Energy, and Environmental Policy; hearing to “examine the World Health Organization and pandemic protection in a globalized world;” 2:30 p.m., 419 Dirksen Bldg.; June 20

Senate Homeland Security and Governmental Affairs; hearing to “examine cybersecurity regulation harmonization;” 10:30 a.m., 342 Dirksen Bldg.; June 21

Senate Appropriation Subcommittee on Military Construction, Veterans Affairs, and Related Agencies Review of the FY2018 Budget Request for the U.S. Department of Veterans Affairs; 2:30 p.m., 124 Dirksen Bldg.; June 21

House Armed Services Subcommittee on Readiness; markup of H.R. 2810 - National Defense Authorization Act for Fiscal Year 2018; 9:00 a.m., 2212 Rayburn Bldg.; June 22

Senate Appropriations Subcommittee on Labor, Health and Human Services, Education and Related Agencies Hearing to Review the FY2018 Budget Request for the National Institutes of Health; 10:00 a.m., 138 Dirksen Bldg.; June 22

House Energy and Commerce Health Subcommittee hearing “Examining the Extension of Safety Net Health Programs;” 9:00 a.m., 2123 Rayburn Bldg.; June 23

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