Summary
Infrastructure
Negotiations over the infrastructure package continue to intensify this week as President Joe Biden seeks a bipartisan deal, ideally by the end of the month. While Biden and Republican lawmakers expressed optimism after their meeting last week, they remain far apart on fundamental issues – price tag, scope, and most crucially, pay-fors. Senate Minority Leader Mitch McConnell (R-KY) and Sen. Shelley Capito (R-WV), Republicans’ lead negotiator, have reiterated Republicans’ unwillingness to undo their 2017 tax cuts, further complicating the challenge of striking a compromise that satisfies both parties. The White House is expecting a revised counterproposal from Senate Republicans by tomorrow, according to White House Press Secretary Jen Psaki.
| Biden’s American Jobs Plan | Senate Republicans’ Counterproposal | |
| Price Tag | $2.2 trillion | Initially $568 billion, possibly up to $800 billion |
| Scope | $900 billion traditional infrastructure
$1.3 trillion nontraditional infrastructure (including home health, housing, schools, research and development, manufacturing) |
Traditional infrastructure only |
| Pay-Fors | Increase corporate tax rate to 28 percent (up from 21 percent), other tax reforms | Implement user fees (e.g., electric vehicles), repurpose appropriated federal funds |
Absent an agreement, Democrats will likely pursue budget reconciliation to advance infrastructure legislation, including the $1.8 trillion American Families Plan, over the summer. Executing this legislative maneuver will be no easy feat for Democrats. Hurdles include competing policy priorities within the caucus (e.g., drug price negotiation vs. moderate drug pricing reforms), slim majorities, and of course, the Byrd Rule’s requirements (e.g., significantly affect federal spending or revenue).
Votes This Week
This week, the Senate is slated to begin floor consideration of the Endless Frontier Act (S. 1260) – a bill aimed to increase the United States’ technological competitiveness in “key technology focus areas,” through investing in and expanding the National Science Foundation (NSF) and the National Institutes of Standards and Technology (NIST). The initial list of focus areas includes biotechnology, medical technology, genomics, and synthetic biology, among other topics. The Senate Committee on Commerce, Science, and Transportation approved the bill by a vote of 24-4 last week.
The House is slated to consider a slew of bills throughout the week on a range of issues – including veteran health; science, technology, engineering, and math (STEM) research support; housing; and hate crimes and violence against Asian-Americans and Pacific Islanders; among other topics. On Thursday, the House is expected to pass the Fairness in Orphan Drug Exclusivity Act (H.R. 1629) – a bill that would require manufacturers seeking orphan status for any drug to show they have no reasonable expectation of recovering research and development costs through sales in the U.S. for the entirety of the seven-year exclusivity period.
Health Care-Focused Hearings
On Wednesday, Sen. Amy Klobuchar (D-MN), who chairs the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, will convene a hearing on hospital consolidation. Sen. Klobuchar has introduced several bills this Congress aimed at curbing anticompetitive behavior – including legislation (S. 225) that would increase antitrust enforcement and shift the burden from the government to merging companies to prove their merger is legal. Last week, the Senate Judiciary Committee unanimously approved Sen. Klobuchar’s legislation (S. 228) introduced alongside Sen. Chuck Grassley (R-IA) that would raise merger filing fees to increase the budget for antitrust enforcement.
The Senate Finance Committee will hear from the Government Accountability Office (GAO) and physician stakeholders on Wednesday about “COVID-19 health care flexibilities.” The discussion will likely focus on next steps for coronavirus waivers and flexibilities, including telehealth flexibilities, issued by the Centers for Medicare and Medicaid Services (CMS) for after the public health emergency (PHE). The current PHE declaration ends July 20, 2021 and is likely to be in place for the entirety of 2021, according to a White House letter to governors in January.
On Thursday, the Senate Health, Education, Labor and Pensions Subcommittee on Primary Health and Retirement Security will examine the health care workforce shortage. The hearing will likely inform forthcoming bipartisan legislation from Chair Patty Murray (D-WA) and Ranking Member Richard Burr (R-NC) aimed at improving nation’s public health infrastructure and medical preparedness and response programs and capabilities.
Regulatory Update
Last week, the Office of Management and Budget (OMB) cleared its review of a new proposed rule titled, “Establishing Minimum Standards in Medicaid State Drug Utilization Review (DUR) and Supporting Value Based Payments (VBP) for Drugs Covered in Medicaid.” The proposed rule under review shares the same RIN number as the final rule on Medicaid VBP arrangements issued in December 2020 (our full summary here and attached), suggesting the forthcoming proposed rule could possibly rescind, revise, or otherwise add on to the provisions finalized last year. Its publication in the Federal Register is expected shortly.
As a reminder, the December 2020 final rule included provisions allowing state Medicaid programs to enter into VBP arrangements with prescription drug manufacturers, as well as revisions to the best price and average manufacturer price (AMP) exclusions of manufacturer-sponsored patient assistance programs, among other changes.