Pharmaceutical & Life Sciences News

Capsule: ‘Junk Plans,’ Slashed Budgets & Health-Care Antitrust

March 15, 2019, 10:15 AM

Welcome to Capsule—your weekly dose of health-care news, where we give you a recap of this week’s highs and lows for key players in the industry. You can expect us every Friday morning as a bookend for your week.

This week has been full of national emergencies: Trump’s border declaration got rejected in the Senate, Brexit drama continued, and diplomats fled Venezuela. The health industry has its own kinds of emergencies, too, and two potential conflicts involve e-cigarette manufacturers and Medicare funding. (Although, like Trump’s emergency declaration, Congress isn’t likely to put up with the huge cuts he proposed for Medicare.)

Here’s who ended the week on a high note:

AIDS Council Members

  • The president’s advisory panel on HIV/AIDS met for the first time this week since President Donald Trump fired its members in late 2017, Madison Alder reports. The council has new leaders and a renewed roadmap to end the HIV epidemic in the next decade.
  • Trump proposed additional funds for that roadmap in his FY 2020 budget. He asked Congress to allocate $291 million to fund his initiative to end HIV in the U.S. by 2030.
  • Here’s how he proposes splitting up some of the money: About $140 million would go to the Centers for Disease Control and Prevention to work with state and local health departments to reduce infections—a key part of the administration’s plan to end the epidemic. Roughly $120 million is for the Health Resources and Services Administration and the Ryan White HIV/AIDS Program, which both deliver care and treatment to those with HIV.

Antitrust Lawyers

  • An influential House lawmaker intends to start crafting legislation allowing the Federal Trade Commission to more easily punish anticompetitive behavior in the health-care industry, Shira Stein writes.
  • Courts typically push back on what the FTC considers anticompetitive practices because the law is unclear, an economics professor told lawmakers at a hearing. With more guidance, the FTC could more easily go after those violators, she said.
  • Meanwhile, Democratic presidential hopefuls are using antitrust rhetoric to boost their campaign platforms, Victoria Graham writes. That includes railing against technology companies’ pervasive influence and consolidation in industries like health care.

Religious Objectors

  • Our very own James Swann sat down with the director of the Health and Human Services Office of Civil Rights, Roger Severino, to talk religious rights enforcement. Severino has made protecting religious freedom a major priority for this administration.
  • The OCR received more than 100 conscience and religious freedom complaints in 2018. Before Trump was elected, the OCR was seeing about one such complaint per year, Severino told Swann. The office has been criticized by leaders from Planned Parenthood and the American Civil Liberties Union, who say the office is using religious freedom as an excuse to allow bias to be injected into health-care decisions.
  • The president has been a staunch supporter of protecting religious rights. For example, child welfare groups wanting to screen foster families based on their religious beliefs would be protected from bias allegations under a provision of Trump’s recent budget request, Madison Alder reports.

It was a bleak week for others. Here’s whose Thursday closed on a downswing:

‘Junk Plan’ Peddlers

  • The House Energy and Commerce Committee is launching an investigation into “junk” insurance plans that don’t meet Obamacare requirements, the chairman of the committee told insurers this week. The committee members hope to pass legislation “to make it impossible to sell the junk plans,” one of the committee members said.
  • The committee has sent letters to nine health insurance companies and three brokers to better understand what kind of plans are being sold, how they’re marketed, and the business practices associated with the plans, Sara Hansard reports.
  • The targeted companies include UnitedHealth Group, Anthem, Arkansas Blue Cross and Blue Shield, Blue Cross of Idaho, Cambia Health Solutions, Agile Health Insurance, and Health Insurance Innovations, according to a news release from the committee.

Vape Products

  • JUUL and other e-cigarette makers shouldn’t expect a reprieve from the FDA’s push on teen vaping with the Trump administration’s decision to put Ned Sharpless from the National Cancer Institute at the agency’s helm, Jeannie Baumann reports.
  • Sharpless had applauded on Twitter the FDA’s crackdown, and in a November statement he expressed support for reducing overall tobacco use among Americans.
  • Trump also suggested user fees for the e-cigarette industry in his budget proposal. The industry would pay $100 million, and the fees would go to the Food and Drug Administration to fund new oversight of tobacco and nicotine-related products—essentially taxing the manufacturers to pay for new regulations, Alex Ruoff writes.

HHS Coffers

  • The Department of Health and Human Services would suffer more than $14 billion in cuts next year under the Trump administration budget proposal, Alex Ruoff writes. That nearly 12 percent reduction is likely to renew questions on Capitol Hill about the White House’s priorities.
  • The largest cuts to the Department of Health and Human Services would come from changes in how hospitals are paid by Medicare, namely paying the same rate for services at off-campus hospital outpatient departments and independent doctors’ offices.
  • In total, the budget looks to cut more than $456 billion from Medicare over the next decade. Alex Azar, who heads HHS, told lawmakers this week he supports the proposed cuts. “I just don’t believe we’re spending too little money on health care: we’re spending too much but we’re spending in the wrong way,” Azar said.

Thanks for joining us this week and have a great weekend. I’m all ears when it comes to your two cents, tips, critiques, or coordinating exclusive interviews. Send them my way at jlee1@bloomberglaw.com.

To contact the reporter on this story: Jacquie Lee in Washington at jlee1@bloomberglaw.com

To contact the editors responsible for this story: Fawn Johnson at fjohnson@bloomberglaw.com; Andrew Childers at achilders@bloomberglaw.com

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