May 15, 2015


In This Issue
NAHU Submits Comments on the Cadillac Tax
Reaching Milestones: Cures and Medical Device Repeal
New Guidance on Preventive Care and Deductibles
Lawmakers Propose Alternative Solutions to SCOTUS Challenge
Hit Parade
HUPAC Round Up
What We're Reading
E-mail the Editor
Visit the NAHU Website
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Reaching Milestones: Cures and Medical Device Repeal

The 21st Century Cures bill took the health headlines in Congress this week. On Wednesday, House Energy and Commerce Chairman Fred Upton (R-MI-6) along with Diana DeGette (D-CO-1) introduced legislation that has been years in the making to update the processes by which pharmaceuticals, medical devices and other medical inventions are approved, in addition to new telehealth, health IT and interoperability regulations that would set a single standard by 2018, FDA rules, and new funding for the National Institutes of Health to help with the additional workload the bill imposes. This is an update to the draft bill that was released in late April.

Leaving no time to waste, the Energy and Commerce Health Subcommittee held a markup hearing yesterday to review the contents of the legislation and make any amendments before sending it along to the full committee for its review. Following opening statements, the hearing flowed effortlessly without any amendments or discussion on the bill itself. This is in contrast to the months of back-and-forth between the parties to hash out the language for the bill, where Democrats threatened to withdraw support due to the favorability given to brand name drug manufacturers in the initially proposed bill that have since been removed. There were only minor objections from Democrats, including full committee Ranking Member Frank Pallone (D-NJ-6) over the length of pharmaceutical exclusivity for rare diseases and a similar objection by Representative Jan Schakowsky (D-IL-9) following the vote.

The bill will now head to the full Energy and Commerce Committee where a markup hearing is expected next week. Upton is seeking a quick turnaround on the bill and for it to be heard by the full house before the end of June. One of the major hurdles left for the bill is the issue of how to pay for it—so far there aren’t any credible proposals. The other major hurdle will be passing this legislation in the upper chamber where the Health, Education, Labor and Pensions (HELP) Committee is not expected to bring their version to the Senate floor until sometime next year. Upton has expressed hope for the Senate to finish a narrower bill sooner so that they can go to conference before the end of this year.

Also making news this week was a group of 18 freshmen and sophomore Democratic lawmakers asking for Speaker Boehner to bring the bipartisan medical device tax repeal bill to the floor. The bill, H.R. 160, has 279 co-sponsors and is currently awaiting action in the House Energy and Commerce committee. Representative Scott Peters’s (D-CA) letter to House leadership asking for the bill’s consideration was also signed by 17 of the bill’s 38 Democratic cosponsors, who mostly hail from districts that have a strong presence of medical device manufacturers. The letter asks for timely passage of the bill, seeking for a full repeal to be passed out of the house by Memorial Day. Both chambers have passed repeal votes of the tax in some form during prior sessions, but none have made their way to President Obama’s desk yet, who has vowed to veto the repeal unless the tax revenue is made up for from another source.

The 2.3% tax on medical device innovators, has been unpopular since the health reform law was still being drafted in 2009, when the rate was cut in half from the initially proposed 4.6%, and has been subject to calls for delay or repeal ever since. It is expected to bring in roughly $29 billion in revenue over the next 10 years, considerably smaller than other taxes included in the law like the health insurance tax (HIT), set to bring in over $100 billion over the same timeframe.

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