FDA Reform Bill Delayed on Offset Concerns

The bipartisan initiative intended to reform the Food and Drug Administration and accelerate approval of new drugs, known as 21st Century Cures, is stalled over concerns about cost offsets, according to several House aides.

The bill, spearheaded by Rep. Fred Upton (R-Mich.) and Rep. Diana DeGette (D-Colo.), boasts 171 cosponsors (87 Democrats and 84 Republicans) and passed the House Energy and Commerce Committee in a rare unanimous vote last month, 51-0. After the vote, Upton said he hoped to pass the bill through the House by the end of June, a deadline that the House will almost certainly miss now.

“People want to pursue a policy that they’ll agree on, but then you got to turn around and pay for it,” Julian Hobson, a senior policy advisor at Polsinelli P.C., a lobbying firm that counts pharmaceutical companies among its clients, said in an interview. “It has everything to do with the pay-fors, and I mean everything.”

The Congressional Budget Office says the bill will cost $106.4 billion, if appropriators direct all of the additional spending the legislation calls for, mainly to the National Institutes of Health. Without the additional appropriations, CBO said the bill saves nearly $12 billion dollars.

A House aide familiar with the legislation said there are concerns in the chamber over several of the offsets, and that negotiators on the House Energy and Commerce Committee are trying to work them out. “With these conversations ongoing, it’s a little hard to nail down exactly where any particular proposal stands at a given time,” the aide said.

One offset that has come under scrutiny would generate $5 billion by changing the timing of government repayments under the Medicare Advantage program, according to the CBO. The change – pushed by Democrats on the Energy and Commerce Committee – would allow the government to collect interest on the payments rather than insurers, and has faced opposition by Republicans and some Democrats.

Last week, 44 Congressmen, including 22 Cures cosponsors, signed onto a letter by Reps. Renee Ellmers (R-N.C.) and Ron Kind (D-Wis.) in opposition to the offset, which they called “a tax on America’s seniors.”

“I think it’s just a good way to send a strong message to leadership that that Part D pay for is not the route to take here,” said Blair Ellis, Ellmers’s press secretary. “I’m not sure what kind of alternative offsets are being discussed, but I know those are being discussed at the committee leadership level.”

An offset that would generate $5.3 billion by selling 8 million barrels of oil from the Strategic Petroleum Reserve over 8 years garnered criticism from Energy Secretary Ernest Moniz.

“I have some considerable concern about using (the reserve) for anything other than energy security and resilience issues for which it is intended,” Moniz said at a hearing earlier this month.

Another offset of $2.5 billion would put limits on the amount of money the federal government must reimburse state Medicaid programs for “durable medical equipment” used in home healthcare.

Update: this story was corrected to include the correct spelling of Rep. DeGette’s first name, and the correct number of years during which Cures proposes to sell oil from the Strategic Petroleum Reserve. 

Morning Consult