By Jon Bigelow • Executive Director of the Coalition for Healthcare Communication
Washington has settled into the hot and hazy days of August, with Congress on recess until September 9. Looking ahead to Labor Day, here’s a quick look at potential new developments important to health communications and marketing.
Drug prices in DTC ads
The Trump administration’s effort to require including list prices in prescription drug television advertisements was blocked in July by a U.S. District Court, but an appeal is very possible – and the First Amendment issues, with implications that extend beyond direct-to-consumer (DTC) advertising, have not yet been adjudicated. Even absent an appeal, Congress may revisit a legislative solution; last September, Sens. Chuck Grassley (R-IO) and Dick Durbin (D-IL) pushed to include this requirement in an appropriations bill and may try to do so again.
Pressure on drug pricing generally
The recent, encouraging efforts by the Trump administration to broaden the cost discussion to include limiting PBM rebates – offering far greater potential consumer savings than any measure involving DTC – have been jettisoned after political opposition and logistical issues proved too daunting. The administration will apparently now revert to cost-saving strategies aimed at pharma, including the “international pricing index” concept.
Meanwhile, House and Senate committees are working on legislative packages with measures such as requiring price negotiations for Medicare drugs, setting an inflation cap on price increases for Part D drugs, capping provider payments for physician-administered Part B drugs, limiting patents when prices are deemed excessive, and allowing drug importation from Canada. There are differences but also areas of overlap in the packages from the Democratic-controlled House and the Republican-controlled Senate, and it is instructive that Sen. Grassley and Sen. Ron Wyden (D-OR) introduced the Senate Finance Committee package together.
Health and Human Services Secretary Alex Azar and other Trump administration officials are pressing reluctant Republican Senators to go along with the drug pricing package, and Sen. Grassley warns that if they balk, the House and President Trump may offer something more extreme. Meanwhile, the leading Democratic presidential candidates, whether considered “centrist” or “progressive,” offer competing solutions. The bipartisan clamor to “do something” to rein in drug prices hasn’t abated; stay wary for measures that would, intentionally or not, restrict the type or content of health communication and marketing.
The jousting over drug prices, plus concerns over the ballooning federal deficit, renew the risk of an effort to eliminate the tax deductibility of pharma marketing expenses. Such a step would be unprecedented, make pharma marketing significantly more expensive, and raise serious First Amendment issues, but it would generate significant tax revenue and represents an irresistible soundbite for many politicians.
The Senate Finance Committee reportedly has debated including repeal of tax deductibility of pharma marketing expenses in its drug pricing package. Leading Democratic Presidential hopefuls Joe Biden, Elizabeth Warren, Bernie Sanders, Kamala Harris, Amy Klobuchar, and Kirsten Gillibrand all endorse removing the tax deduction for DTC promotion.
The Trump administration’s 2020 budget proposed a $350 million increase for the Food and Drug Administration, and the House agreed to a $185 million increase, to $3.26 billion, reflecting bipartisan consensus for funding important initiatives such as upgrading IT infrastructure, improving processes for integrating real world evidence into the drug approval process, reorganizing the Center for Drug Evaluation and Research, and addressing the opioid epidemic.
As further good news, just before the recess President Trump and Speaker Nancy Pelosi, to avoid another government shutdown, hammered out an agreement setting overall guidelines for the 2020 budget and raising the debt ceiling. The House has already passed 11 of the 13 individual budget bills, including the one covering the FDA. Still to come are Senate action on those bills, and then any differences in the House and Senate bills will need to be reconciled; there will inevitably be disagreements on spending, especially in controversial areas such as spending on border control. So, the outlook for strong budgetary support for the FDA is encouraging, but this is not yet a done deal.
There have been reports that the Trump administration is getting closer to appointing a permanent FDA commissioner, and that the choice may not be the person now filling the position on an acting basis, Dr. Ned Sharpless. Any nomination would send an important signal about future FDA priorities.
Affordable Care Act
In July, the Fifth Circuit Court of Appeals heard arguments in an appeal of the U.S. vs Texas case, in which Republican Attorneys General from 20 states argued that the entire Affordable Care Act (ACA) should be ruled unconstitutional because the 2017 tax bill removed the tax penalty associated with the individual mandate.
The headline here is that 21 million Americans would lose their health insurance, clearly a wrenching change that would provoke frenzied wrangling in Congress, but remember that invalidating the ACA would have other important implications. Two notable examples: The ACA is the legal framework for the “innovation center” authority underlying the proposed international pricing index, and also for the Sunshine Act and the Open Payments system. Two of the three judges on the panel seemed skeptical of the ACA, and their decision could push the case to the U.S. Supreme Court for final resolution by June 2020, in the midst of the presidential election campaign.
So, a lot will be happening behind the scenes this month, and there could be significant events soon in any of these six areas of concern to the Coalition for Healthcare Communication’s members – marketing firms, advertising agencies, medical communications firms, medical journals, digital publishers, and point of care education providers. Please visit us at www.cohealthcom.org to stay up to date.