In This Issue
Consumer Product Safety: House Committee Approves Six Bills
Legislation Consumer Product Safety: House Committee Approves Six Bills Responding to what they claim has been a failure of the Consumer Product Safety Commission (CPSC) to act in recent years, the House Energy and Commerce Committee adopted six bills that would aim to eliminate injuries from a variety of products. In his remarks during the subcommittee markup session on July 10, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ) argued that congressional action is needed given that the CPSC is “too slow to act, too timid, or too deferential to industry.” Following are the six bills that were adopted by the committee.
These bills now move to the House floor for consideration. The floor schedule has not yet been determined. Drug Pricing: House Committee Approves Drug Price Justification Bill As part of a markup session on July 17 of 10 bipartisan health bills, the House Energy and Commerce Subcommittee on Health approved legislation that would require drug manufacturers to submit documentation to the Department of Health and Human Services (HHS) 30 days before increasing the price of a qualifying drug. Introduced by Reps. Jan Schakowsky (D-IL) and Francis Rooney (R-FL), the “More Efficient Tools to Realize Information for Consumers” (METRIC) Act (H.R. 2296) would require manufacturers to report their justification for an increase in the wholesale acquisition cost (WAC) of a qualifying drug should the manufacturer decide to increase the price by 10 percent or more over a 12-month period, or by 25 percent or more over a 36-month period. A manufacturer of a qualifying drug would be required to report the total expenditures for manufacturing the qualifying drug, the research and development expenditures for the drug, and total revenue and net profit generated by the drug, as well as other documentation as applicable. The committee also approved nine other health bills during the markup session:
The last two bills—H.R. 3630 and H.R. 3631—were incorporated into the text of H.R. 2328 during the markup session. As with the consumer product safety bills that were approved by the House Energy and Commerce Committee, these bills now move to the House floor for consideration. The floor schedule has not yet been determined. Drug Pricing: Senate Committee Approves Price Reduction Legislation The Senate Finance Committee approved bipartisan legislation—the Prescription Drug Pricing Reduction Act (PDPRA)—on July 25 that would make reforms in Medicare and Medicaid as it relates to drug pricing. Other provisions in the bill aim to increase transparency and curb future abuses. The bill was introduced by Senate Finance Committee Chairman Charles Grassley (R-IA) and Ranking Member Ron Wyden (D-OR). Specifically, the bill would require the HHS to make public on its website, beginning on July 1, 2022, data reported to it by insurers and pharmacy benefit managers (PBMs) under Medicare Part D requirements on an aggregate basis. In addition, the HHS would be required to report discrepancies related to direct and indirect remuneration information submitted by Part D plans and results of independent financial audits. The bill would also require Part D insurers to conduct audits of PBMs and report certain financial information to pharmacies and the HHS. With respect to manufacturers, the bill would require a mandatory rebate if a pharmaceutical manufacturer increases its list price for certain covered Part D drugs above inflation. Further, it would require a manufacturer to submit justifications to the HHS for price increases for prescription drugs and biologics where the HHS determines that the manufacturer’s price increase met or exceeded certain thresholds. The HHS would be required to publicly post the price justifications. With respect to Medicaid, the bill would require enhanced auditing and reporting of the price and drug product information reported by manufacturers of covered outpatient drugs. It would also limit payment to PBMs under Medicaid to prevent abusive spread pricing and require DHHS to conduct surveys regarding payments for and prices of drugs covered under Medicaid programs. The bill passed the committee by a 19-9 vote, and now moves to the Senate floor where the schedule has not yet been determined. Senate
House
Letters and Statements Biologics: House Democrats Urge USTR to Drop Market Exclusivity Language from USMCA A group of 104 House Democrats wrote U.S. Trade Representative Robert Lighthizer to request language that would provide 10 years of marketing exclusivity for brand biologics from the U.S.-Mexico-Canada Trade Agreement (USMCA). In the July 11 letter, the House Democrats asserted that the USMCA would maintain high prescription drug prices “by increasing and locking in 10 years of marketing exclusivity for brand biologics, expanding the scope of brand biologics eligible for protection, and making it easier for brand-name drug companies to extend their monopolies through additional patents, patent extensions, and other forms of patent ‘evergreening.’” The letter also argued that the proposed language in the USMCA would prevent Congress from having the ability to adjust the biologics exclusivity period, which would lock the U.S. into policies that keep cancer and other drug prices high. According to the letter’s signees, it would result in this model being exported to Mexico, which has no additional exclusivity period for biologics, and to Canada, which has an eight-year period. Regenerative Therapies: Bipartisan Letter to FDA Raises Concerns over Unapproved Stem Cell Products The bipartisan leaders of the House Energy and Commerce Committee sent a letter to the Food and Drug Administration (FDA) on July 25 seeking more information on the agency’s strategy for enforcement and bringing stem cell products into compliance to protect consumers. The letter outlines concerns over the slower than expected progress of manufacturers and providers of stem cell products to come into compliance with the FDA’s guidance and premarket approval requirements, including those established by the 21st Century Cures Act. According to a committee press release, the letter comes after the FDA recently announced that it has sent letters to 20 manufacturers and providers who may be offering unapproved stem cell products. As part of their inquiry, the committee leaders requested answers to a series of questions, including:
The letter was signed by Chairman Frank Pallone, Jr. (D-NJ), Ranking Member Greg Walden (R-OR), Rep. Diana DeGette (D-CO), and Rep. Fred Upton (R-MI). Hearings Cannabis: On July 23, the Senate Banking, Housing, and Urban Affairs Committee held a hearing entitled, “Challenges for Cannabis and Banking: Outside Perspectives.” This hearing focused on legislation—The Secure and Fair Enforcement (SAFE) Banking Act (S.1200) —that would create safe harbors for depository institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses. Hemp Production: On July 25, the Senate Agriculture, Nutrition, and Forestry Committee held a hearing entitled, “Hemp Production and the 2018 Farm Bill.” The hearing focused on the legalization and promotion of industrial hemp. Blockchain: The Senate Banking, Housing, and Urban Affairs Committee has scheduled a hearing for July 30 that will examine regulatory frameworks for digital currencies and blockchain. Wilson Sonsini Goodrich & Rosati’s FDA Regulatory, Healthcare, and Consumer Products Compliance Practice group is actively following developments on Capitol Hill that impact life science and consumer product issues. For more information on the items above, please contact Brian Ronholm, David Hoffmeister, Jamie Ravitz, or Georgia Ravitz. If there are questions related to antitrust perspectives on these issues, please contact Seth Silber or Thu Hoang in Wilson Sonsini Goodrich & Rosati’s Antitrust practice group.
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