NVCA Today

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Health Care Reform Skids to a Halt – President Obama Tells Congress to Press Forward

In early January, it looked virtually certain that Congress would be sending a comprehensive healthcare reform package to President Obama for his signature prior to his first State of the Union address.  That guarantee ended when Republican State Senator Brown scored an upset takeover of the open Senate seat in Massachusetts occupied by the late Senator Kennedy.  Massachusetts voters wanted to send Washington a message regarding their disapproval of the direction the Democratic Congress was going on the healthcare package.  As a result of the election, the President and the Democratic leadership retreated and made the decision to slow down movement on the comprehensive package and instead focus on job creation and the economy.

The Democratic leadership still insist they will move forward on passing healthcare reform, and are considering several options.  They could move a package through the budget reconciliation process, a procedure that would allow Democrats to bypass a potential filibuster and pass a bill with a simple majority (51) votes.  Senate and House leadership could craft a “cleaned-up” version of the Senate-passed bill by fixing it to satisfy the House liberals to ensure House passage or; work on a scaled-down bill that would include insurance market reforms.  Unfortunately for the Democrats all of these options have political challenges which will make it very difficult to pass any bill this Congress.  The moderate Democrats who would be needed to move any package continue to feel uneasy with the idea of using procedural tactics to achieve passage, since this would bypass the normal legislative process.

What does this mean for medical innovation?

Overall, the legislation passed by the Senate and House would increase access to affordable, quality coverage.  There are several provisions in the House and Senate bills that would promote and protect innovation of new breakthrough treatments, including an approval pathway for biosimilars with 12 years of data exclusivity for innovator products; a tax credit to encourage investments in new breakthrough medical therapies to prevent, diagnose, and treat acute and chronic diseases; and the establishment of the CURES Acceleration Network to cut the time between discovery and development of drugs and therapies through new grant-making mechanisms at the National Institutes of Health (NIH).

However, significant improvements are needed to any bill moving forward to protect medical innovation.  In particular the proposed medical device tax as currently structured, has no phase-in for small companies which would ultimately impose an approximate 2.5% tax on revenue of unprofitable companies.  NVCA has been working closely with the medical device industry to try to include legislative language that would include a small company phase-in that would include no fee on revenues between $0 and $100 million; and would assess 50% of the applicable fee on revenues between $101 million and $150 million.  Revenues over $150 million would be subject to the full fee.

NVCA has also advocated that a healthcare reform bill should include an “Innovation Advocate” to monitor and assess the impact of proposed delivery system reforms on innovation.  In particular such a role could be added to the Advisory Board for the Comparative Effectiveness Research entity and to any Independent Payment Advisory Board.

NVCA also has significant concerns regarding the proposed new Medicare Commission tasked with presenting Congress with comprehensive proposals to reduce excess cost growth and improve quality of care for Medicare beneficiaries.  It would consist of 15 members appointed by the President and existing HHS officers.  We believe this type of Commission could significantly stifle the introduction of medical innovation into the healthcare system.

NVCA’s Medical Industry Group (MIG) Creating Medical Innovation Coalition

NVCA’s MIG is organizing a new medical innovation coalition focused on FDA regulatory issues impacting the advancement of medical innovation.  The coalition will establish a plan and well-defined legislative goals on how to improve the FDA regulatory process for novel therapies and medical technologies.  The coalition will also develop an educational campaign targeted to policy makers on the medical innovation ecosystem and highlight the barriers that are hindering the advancement of innovation job creation.  The coalition will include venture capitalists, portfolio companies, and patient groups and will partner with other advocacy groups that have similar positions and interests on FDA reform efforts.