The Affordable Care Act (ACA) has been an issue in every Congress since it was enacted in 2010 and this next Congress will be no different. There are so many health care issues that need to be debated—a national vs state pandemic strategy; funding for testing; additional relief for health care providers; surprise billing; treatment of short term health plans; but ACA—whether to strengthen it or weaken it—could be at the top of the agenda.
Quickly turning to the congressional players in the House (since we will cover the Senate in another blog post), while the Ways and Means Committee under Chairman Neal and Brady will look similar next year, stakeholders will have a number of new Members on Energy and Commerce to educate about their concerns with 10 retiring members including Ranking Member Walden. There are six spots on the health subcommittee alone. Rep. McMorris Rogers and Rep. Burgess are competing for Walden’s spot and while Dr. Burgess has years of experience fighting the ACA fight, it may be that McMorris Rogers, who has focused less on health care, wins the post.
With the likely divided Congress, we would not expect to see much legislative movement on such campaign priorities as a federal public option under a Biden Administration. Rather, we would expect Biden to use whatever powers he has to try to achieve his policy goals through executive action. Biden likely will look to shore up the ACA marketplace with enrollment assistance and perhaps expand access by incentivizing states to set public options on the exchanges, which can be done without legislation.
We would not expect to see a return of the cadillac, medical device or health care taxes, already repealed, but all stakeholders in the health care industry will have to watch for ways Congress may try to pay for other costly programs that could advance on a bipartisan basis.
We expect congressional activity to increase dramatically if the Supreme Court strikes down the Affordable Care Act in its entirety next spring. There’s some optimism that the Court might rule on the constitutionality of the individual mandate without striking down the entire law. But even if it did, we would expect the Court to delay the effectiveness of its judgment for a period of time in order to allow Congress to pass replacement legislation, with likely quick bipartisan action addressing pre-existing conditions.
Despite tough rhetoric on drug costs, other than “naming and shaming” and yet to be effectuated Executive Orders—including International Price Indexing (IPI) and expanded importation from Canada—bio-pharma escaped the Trump Administration largely unscathed. Biden uses similar rhetoric, but a grand legislative bargain on drug prices would still be very unlikely in the event of a continued divided government. Recall that in this Congress even the initially bipartisan Finance package (much more modest in scope than the House passed The Lower Drug Costs Now Act (H.R.3.) stalled in the Senate.
Going forward, a lot of the action could largely be on the Executive side—A second term for Trump would have meant a continuation of the bully pulpit and some or all of the recent EOs. Biden, despite philosophical similarities, probably will reverse some or all of them—and if faced with legislative gridlock might, like Trump, use executive authority to pursue reforms. House progressives will likely conduct more drug pricing hearings and revisit H.R.3. or the like—including direct government price negotiations—but, assuming a continued Senate GOP firewall, the Democrats lofty ambitions on drug pricing will be more for messaging purposes rather than viable legislating. In this scenario, a President Biden is unlikely to go big on Rx prices—unless there is a Democratic Senate majority or otherwise some prospect of using it as a “pay-for” for a broader bipartisan budget deal and/or stimulus package.
Come what may with the Senate, there is some potential for bi-partisan deals on targeted issues such as: a cap on out-of-pocket costs for seniors, eliminating Part D rebates to certain “middlemen,” some form of importation and or IPI, and a ban on Rx advertisements. The various UFA’s must also be reauthorized and there could be action on COVID-related vaccine/therapeutics issues. Also, look for a Biden Administration, like Trump, to act on the pharmaceutical supply chain via “Buy American” and “re-shoring” policies to reduce reliance on foreign sourced products.
At the end of the day, expect bio-pharma to be on the defensive, as always!