Biden braces for fallout from the Omicron surge

Jan 05, 2022

Presented by

With David Lim and Daniel Lippman

Editor's Note: POLITICO Pulse is a free version of POLITICO Pro Health Care's morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day's biggest stories. Act on the news with POLITICO Pro.

Quick Fix

— The White House is scrambling to contain the economic and societal fallout from a record surge of coronavirus cases.

— Republican governors are downplaying the threat posed by Omicron, while simultaneously pleading with the Biden administration for help fighting it.

— The CDC is sticking with its controversial Covid-19 isolation guidelines, pointing to evidence it says justifies the need for people to stay home only five days.

WELCOME TO WEDNESDAY PULSE — where ex-WeWork CEO Adam Neumann is living out that old adage: If at first you don't succeed (and create so many headaches in the process an investor pays you billions to leave), try, try again.

Send tips and apartment listings to acancryn@politico.com and sowermohle@politico.com.

A message from PhRMA:

In today's health care system, PBMs and health insurers often leave patients paying far more than they should for medicines. Unfortunately, the drug pricing plan being considered by Congress would do nothing to address the shady practices these middlemen use to overcharge patients. Our seniors deserve better. Tell Congress to make middlemen share the savings they receive with patients at the pharmacy counter. Learn more.

Driving the Day

THE WHITE HOUSE BRACES FOR IMPACT — Since Thanksgiving night, the Biden administration has watched as the Omicron variant seeded within the U.S. — and then fueled an unprecedented surge of Covid-19 infections across the country.

As if that weren't bad enough, officials fear the next few weeks could be a whole lot worse, Adam and POLITICO's Chris Cadelago report.

The White House is bracing for soaring rates of Omicron to swamp the nation, threatening to strain hospitals, complicate travel and disrupt swathes of the economy. Infections are already topping 1 million a day, with hospitalizations on the rise and schools and businesses facing staff shortages.

The crisis has spurred a race within the administration to avert breakdowns in critical services — with officials shifting from trying to contain the virus itself to simply trying to manage its reverberations. The White House is dispatching federal personnel to overwhelmed hospitals, expanding testing sites and urging states to keep their schools open.

On Tuesday, Biden pleaded with Americans to get vaccinated and boosted, arguing the U.S. has the tools to weather the surge if only, "for God's sake," people would take advantage of them.

It's an emergency unlike the pandemic's prior flare-ups. This time last year, most Americans didn't have vaccines to protect them. And unlike Delta, Omicron appears to be less vicious — a relief for health experts who have closely watched the nation's death rate.

But the nation is more divided and exhausted by Covid-19 than ever before. Lockdowns are off the table. Vaccines and masks are deeply politicized. The central threat, meanwhile, is less that hospitals will run out of beds than that they will run out of healthy doctors and nurses.

The White House now hopes the CDC's reduced isolation guidelines will help alleviate worker shortages, and officials have spent much of their time in recent weeks on expanding testing and supporting the needs of state-level responses.

There's also a silver lining the administration is clinging to: Indications abroad that Omicron could burn out as fast as it arrived.

Yet until then, Biden will remain mired in a pandemic that he'd once hoped to defeat within months — a burden already weighing on his approval ratings and likely to jeopardize his party's hold on Washington come November.

GOP GOVS BLAST COVID 'HYSTERIA,' STILL WANT HELP — While the White House tries to hold together the nation's health system, Republican governors are grappling with a more political dilemma: Whether to dismiss the Omicron threat as blue-state hysteria or ask for the help actually needed on the ground.

For several high-profile GOP leaders, the answer is both, POLITICO's Gary Fineout and Arek Sarkissian report.

Governors in states like Florida, Texas, Nebraska and Georgia have ruled out lockdowns and mandates, dismissing the rise in cases and downplaying any cause for concern. Yet at the same time, they're calling on Biden to do more to rein in the pandemic — and demanding greater supplies of the therapeutics needed to treat Covid-19.

"Bogarting these treatments like that and not putting them out is wrong," Florida Gov. Ron DeSantis said, before later saying that in the face of the Omicron surge, "it's not justifiable to let fear overwhelm you."

The shifting rhetoric highlights the fine line GOP governors are trying to walk when it comes to Covid-19 in an effort to simultaneously manage the public health crisis and position themselves as potential presidential challengers.

That's been complicated in places like Florida, where the state ranked third in infection rate last week. A handful of governors have responded by focusing primarily on access to monoclonal antibody treatments — even though initial studies suggest they may not be effective against Omicron.

After the federal government suspended shipment of two types of the treatments, DeSantis and others leveled criticism at Biden over the decision. HHS has since relented, sending Florida 30,000 doses in the past three weeks — a supply that comes on top of the 33,000 the state had already stockpiled.

STEP INSIDE THE WEST WING: What's really happening in West Wing offices? Find out who's up, who's down, and who really has the president's ear in our West Wing Playbook newsletter, the insider's guide to the Biden White House and Cabinet. For buzzy nuggets and details that you won't find anywhere else, subscribe today.

CDC STICKS TO NO-TEST ISOLATION POLICY — The agency is doubling down on its insistence that asymptomatic Covid-19 patients can leave isolation after five days without a negative test, pointing to data it says supports the new guidance as long as people wear a mask afterward, POLITICO's Erin Banco reports.

In an update that followed days of criticism over the isolation guidelines, the CDC clarified the science behind its decision, citing studies that suggest most people aren't infectious after five days — and that fewer than one-third of people stay isolated for the full 10 days anyway.

The agency did add language advising people who had the virus to use an antigen test if they want a test and have access to one and remain isolated if they test positive. But it's resisted making tests a requirement amid concerns about limited supply.

Biden alluded to the testing crunch Tuesday, conceding that "it's frustrating" but said the administration is focused on improving the situation.

A message from PhRMA:

Eye on FDA

FDA NOMINEE'S COMMITTEE VOTE SET — The Senate HELP Committee will vote next Wednesday on Robert Califf's nomination to run the FDA, POLITICO's Lauren Gardner reports.

The schedule means mid-January is the earliest the agency could get a permanent leader, assuming that Califf wins the necessary support. The HELP Committee had initially planned to consider Califf's nomination this week, but since Monday's snowstorm prevented some senators from getting back to Washington, it pushed back the timeline.

OMICRON PUTS MOST FDA INSPECTIONS ON PAUSE AGAIN — The agency is again temporarily pausing most of its foreign and domestic inspections through Jan. 19, citing the Omicron variant's rapid spread, POLITICO's David Lim writes.

Foreign and domestic mission-critical work will continue, and contracted state inspections "have the discretion to make inspection decisions based on their local information," the FDA said. It will also use remote tools to help oversee regulated industries.

Medicaid

SOUTH DAKOTA TO VOTE ON MEDICAID EXPANSION — South Dakota voters will decide whether to expand their Medicaid program, after the state said it would add the question to its November ballot.

If approved, the proposed constitutional amendment would extend coverage to nearly 43,000 people, POLITICO's Dan Goldberg reports — and aid the state's rural hospitals that care for the uninsured.

South Dakota is one of a dozen states that's yet to expand Medicaid under the Affordable Care Act. But it's one of the few that has a citizen-led initiative process, meaning it's among the last fronts in the years-long battle to broaden the safety-net program.

Gov. Kristi Noem, a Republican, has opposed the expansion in the past. But legislation that Congress passed early last year now offers states additional money if they expand Medicaid — an incentive that could bring South Dakota an estimated $60 million a year over the next two years.

BECOME A GLOBAL INSIDER: The world is more connected than ever. It has never been more essential to identify, unpack and analyze important news, trends and decisions shaping our future — and we've got you covered! Every Monday, Wednesday and Friday, Global Insider author Ryan Heath navigates the global news maze and connects you to power players and events changing our world. Don't miss out on this influential global community. Subscribe now.

On the Hill

HOUSE LAWMAKERS DEMAND END TO DIRECT CONTRACTING MODEL — Dozens of House lawmakers are asking HHS to eliminate a Trump-era Medicare program that pays for-profit companies to manage care for beneficiaries, calling it a "threat to patient care and outcomes."

The health department is reviewing the so-called direct contracting model and has paused applications for the time being. But in a letter to Secretary Xavier Becerra, the lawmakers urged permanently ending the program and transitioning beneficiaries back into traditional Medicare.

"These models transform the care of a traditional Medicare beneficiary to care typically seen in a private Medicare Advantage plan despite the fact that the patient chose not to enroll in an MA plan," the group, led by Rep. Pramila Jayapal (D-Wash.), wrote.

Names in the News

Sophie Vaughan, a former speechwriter for Ady Barkan's Be A Hero PAC, is now the campaign manager for Ajwang Rading's California congressional campaign.

What We're Reading

Walmart and Kroger are hiking the price of at-home Covid-19 tests after a deal with the Biden administration to discount them expired, Bloomberg News' Brendan Case reports.

The antiviral pills that Biden has hailed as a "game-changer" in the Covid fight are still months away from widespread availability, The Washington Post's Katie Shepherd reports.

Some public health experts are arguing that case counts no longer matter in evaluating Omicron's surge, The Associated Press' Carla K. Johnson reports.

A message from PhRMA:

Last year, brand drug companies provided $187 billion in total discounts, rebates and other payments to pharmacy benefit managers, insurers, and other entities. In fact, the net prices paid by PBMs and health plans for brand medicines declined 2.9% last year, on average. So how come payers and middlemen often don't share these savings with patients at the pharmacy counter? Policymakers should put an end to these gimmicks so patients can get a fairer deal at the pharmacy. Learn more.