Preliminary Considerations for the Healthcare Industry for the 116th U.S. Congress

Drug pricing and transparency: Democrats and Republicans could find common ground by trying to lower prescription drug costs and increase transparency. In particular, several Democrats and Republicans have signaled interest in working with the White House on some of the drug pricing initiatives, including proposals mentioned in the American Patients First Blueprint (Blueprint). Our previous Sidley Update on the Blueprint can be found here. Notably, President Donald Trump and House Democrats have expressed their support for giving the Secretary of Health and Human Services (HHS) the authority to negotiate the price of drugs covered by the Medicare Part D program. House Democratic committee leaders with jurisdiction over Medicare have made it clear that approving this policy is a top priority.

Additionally, Sen. Charles Grassley, R-Iowa, the new chairman of the Senate Finance Committee (he previously chaired the committee in 2001 and again from 2003 to 2007), has expressed an interest in bipartisan efforts related to lowering drug pricing and increasing pricing transparency. He recently stated that he will “continue working across the aisle to lower drug prices, restore competition and increase transparency in the pharmaceutical industry” and welcomed “the incoming Democratic House Majority to join our efforts on behalf of the American taxpayers and consumers.”

Thus, pharmaceutical companies must be prepared for a continued focus on drug pricing and transparency issues, including new HHS proposals and potential reforms to existing laws, as well as in-depth investigative hearings. Any such hearings are likely to analyze pricing decisions, raise questions regarding the use of taxpayer money for drug research and explore how companies can help to offer more affordable medications to consumers.

Congressional investigations: As explained in a previous Sidley Update, Democratic committee chairs conducting investigations will have virtually unchecked power to issue subpoenas, demand documents, call hearings and require witnesses to testify. In the House, one of the most significant powers that comes with a majority is the ability of committee chairmen to issue subpoenas unilaterally (in the Senate, the rules require a committee’s chair and ranking member to authorize subpoenas together).

Senate Republicans will likely join House Democrats in conducting drug-related investigations. Sens. Grassley and Susan Collins, R-Maine, have spearheaded past investigations into the healthcare industry and are expected to work closely with Senate Democrats on these types of investigations.

Drug and biologics manufacturers should consider preparing for inquiries and investigations now by evaluating the risk of an inquiry or investigation, weighing strategic options, understanding company policies and procedures, assessing potential vulnerabilities and documenting the rationale for company decisions.

Affordable Care Act: Protecting the ACA was a cornerstone of many successful Democratic campaigns, and the recent decision nullifying the law (Texas v. United States of America, No. 4:18-cv-00167-O (N.D. Tex. 2018)) heightens the Democratic sense of urgency in defending it. While many observers expect that the decision will be reversed on appeal, congressional Democrats have forcefully pledged to take action in the interim to protect the law at the beginning of the new Congress. In House rules adopted last week, Democrats included a section authorizing the Speaker of the House, on behalf of the House, to intervene, otherwise appear or take any steps, in Texas v. United States, in any appellate proceedings arising from the case or in any other cases involving the ACA. And on the opening day of the Congress, Energy and Commerce Committee Chairman Frank Pallone, D-N.J., announced that the second hearing he will hold will examine the impact of the decision.

Importantly, Republicans will be interested in protecting certain provisions of the ACA. Ways and Means ranking member Kevin Brady, R-Texas, said, “Should the courts ultimately uphold this decision, both parties should start over, working together to make healthcare truly affordable, making sure patients can see local doctors and be treated at local hospitals, and ensuring that patient protections like pre-existing conditions, no lifetime limits and allowing children to stay on their parents plans until age 26 are preserved.” This potential for bipartisan agreement on at least certain provisions of the ACA can present important strategic opportunities for stakeholders to engage with policymakers on ACA matters.

Opioid abuse crisis: Even with the recently enacted bipartisan Substance Use Disorder Prevention That Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act), many in Congress have stated that they believe more is needed to combat the national opioid abuse epidemic. Democrats criticized the SUPPORT Act because they said it did not provide adequate resources or expand Medicaid enough to address the problem. Because the opioid abuse crisis was seen as one of voters’ top priorities in the 2018 midterm elections, Congress can be expected to take further steps to address the abuse epidemic.

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Given the significant, bipartisan interest in advancing health policy initiatives and investigations, industry participants should both consider ways to share their views with policymakers in Congress and prepare for possible inquiries and investigations. Stakeholders may increase their chances for positive outcomes by engaging with and educating policymakers before legislative or investigative actions are taken.

For more on other breaking drug pricing related news, visit Sidley’s Global Drug Pricing page.