Biden signs historic law: Insurers cheer, drugmakers regroup

Aug 17, 2022

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With Alice Miranda Ollstein

WELCOME TO WEDNESDAY PULSE — Good morning! It's Megan Wilson, the health team's lobbying reporter, and I'll be periodically taking the reins over the next couple of weeks.

Now that the Inflation Reduction Act has morphed from a bill into law, I know y'all are departing on vacation — if you haven't already. But vacation or no, if you're reading this, be sure to tip your hostess by emailing me at mwilson@politico.com.

POLITICO ASKS: How are abortion laws affecting your health care access? Please take a moment to fill out our survey.

A message from PhRMA:

Insurance companies and PBMs don't pay full price for insulin. So why do patients? Rebates, discounts and other payments from manufacturers lower the cost of insulins by more than 80% on average. But insurers and PBMs don't usually share these discounts directly with patients. Congress should address the system we use to pay for medicines. Fix harmful insurance practices and lower out-of-pocket costs for patients. Stand up for patients.

Driving the Day

President Joe Biden (AP Photo/Susan Walsh)

President Joe Biden signs the Democrats' landmark climate change and health care bill. | Susan Walsh/AP Photo

IT'S OFFICIAL: DEMOCRATS' SIGNATURE BILL IS NOW LAW — President Joe Biden signed the Inflation Reduction Act into law on Tuesday, marking a key victory for his administration.

The passage of the historic tax, climate and health care measure came after negotiations appeared to be stalled indefinitely — until they weren't. POLITICO's Adam Cancryn (a Pulse alum!) and Olivia Olander have the story about how the package gives momentum to Democrats heading into the November elections.

At the signing ceremony, Biden said: "With this law, the American people won, and the special interests lost."

But in Washington, "special interests" can be a loaded term — and some industries managed to fare better than others. Insurers, for example, cheered the three-year extension of the pandemic-fueled expanded subsidies for Affordable Care Act plans that resulted in 14.5 million sign-ups on Obamacare exchanges, a record high.

On the other side of the spectrum, the pharmaceutical industry now has to figure out how to respond to losing one of its hardest-fought battles in decades after spending a boatload of cash trying to defeat Democrats' long-sought plan to allow Medicare to negotiate the drug prices.

What I'm hearing so far is that drugmakers are still huddling to determine a path forward and evaluate their options.

Before Congress ultimately approved the bill, Pharmaceutical Research and Manufacturers of America CEO Steve Ubl told me that every option would be on the table — including legal and legislative. But how aggressive will the well-heeled (see: more than $573 million in revenues, per IRS filings) organization be in using its resources to attack vulnerable Democrats heading into the midterms? That answer isn't yet clear.

What is clear, however, is that PhRMA will almost certainly be on the warpath to make sure its enemies — namely pharmaceutical middlemen known as pharmacy benefit manufacturers — share in some of the pain.

There are bipartisan bills on the table to provide more oversight or transparency to PBMs, and it's expected that — outside of trying to "mitigate the harmful impacts" of the law, as Ubl said in a release on Tuesday — PBM-related policy will be one of the next big advocacy pushes for drugmakers. The measures likely won't move this year, but there's always the next session of Congress.

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Around the Nation

BECERRA HEADS TO NEW MEXICO IN VICTORY LAP — Health and Human Services Secretary Xavier Becerra is traveling to New Mexico today to talk, in part, about lowering drug prices and tout the Inflation Reduction Act's impact on health policy.

Dubbed the "Building a Better America Tour," it's part of an administration victory lap around the country — with Cabinet-level officials making 35 trips to 23 states over the next two weeks, according to a White House memo obtained exclusively by our Playbook colleagues.

MICHIGAN ABORTION BAN GOES BACK TO COURT — Michigan's 91-year-old abortion ban, which has no exemptions for rape or incest, is back in state court this week in a case that will determine whether the law remains blocked or can be enforced, Alice reports.

Planned Parenthood and Michigan Gov. Gretchen Whitmer filed separate lawsuits against the state's ban ahead of the Supreme Court ruling that overturned Roe. The state's GOP-controlled legislature jumped in to defend the ban. A temporary restraining order from a lower court is the only thing preventing the law from taking effect.

Jonathan Miller, one of the attorneys working on Whitmer's legal challenge, told Alice that the governor's team will call multiple doctors to testify at today's hearing.

The 1931 law's "ill-defined" exemptions regarding the mother's life cause doctors to "struggle with assessing what that means and how imminent death needs to be in order to perform an abortion," said Miller, who is also the chief program officer of Public Rights Project, a legal advocacy group. "How horrifying to even have to think about that analysis!"

While abortion rights advocates in the state are confident they'll be able to put a constitutional amendment on the November ballot to protect abortion rights, they fear courts could allow the ban to go into effect in the meantime.

TEEN NOT 'SUFFICIENTLY MATURE' FOR ABORTION — A Florida state appeals court affirmed a lower court decision that said a 16-year-old couldn't get an abortion because she lacked the maturity to make such a decision, even after the parentless teen said she wasn't ready to have a child and is still in school, POLITICO Florida's Arek Sarkissian reports.

The unidentified teen is about 10 weeks pregnant and lives with a relative. One Florida law bans abortion after 15 weeks of pregnancy, with no exceptions for rape and incest, while a separate statute requires parental consent before a minor can have an abortion.

Although underage teens can circumvent the consent requirement by obtaining a waiver from a state circuit court judge — and the teen's appointed guardian supports her wish to obtain an abortion — the teen "had not established by clear and convincing evidence that she was sufficiently mature to decide whether to terminate her pregnancy," the ruling said.

ABORTION BANS TO STRAIN HEALTH SYSTEMS — The health care system isn't fully equipped to handle the impacts of a growing number of states banning abortion procedures, a trio of Duke Health physicians said in a Tuesday briefing. This includes an increase in pregnancy-related deaths — or the mental health trauma caused by near-deaths — and an increase in newborns.

"What I don't think we're prepared for nationally is an increase in birth rates. We're already seeing rural hospitals closing," said Beverly Gray, an OB/GYN, professor and founder of the Duke Reproductive Health Equity and Advocacy Mobilization team. "We need to start thinking about how to prepare for more pregnancies."

A message from PhRMA:

Covid

West Virginia and Kentucky have the highest Covid-19 infection rates in the U.S. as the ultracontagious Omicron subvariant BA.5 spreads.

FIRST LADY TESTS POSITIVE FOR COVID — First lady Jill Biden on Tuesday tested positive for Covid-19, coming down with the virus roughly a week after the president ended isolation for his own rebound case, Kelly Hooper reports. She's experiencing only mild symptoms, a spokesperson said.

JHA URGES PROACTIVE COVID PREVENTION — White House Covid-19 coordinator Ashish Jha said Americans — and businesses — need to be more proactive about preventing spread of the coronavirus, particularly as winter approaches and the flu becomes more prevalent.

"If we do nothing and just sort of hope for the best, we could end up getting into a lot of trouble," Jha said on Tuesday during an online Q&A with the U.S. Chamber of Commerce.

Jha emphasized getting the impending booster and improving air quality and ventilation in the workplace and schools — and encouraged parents to hold schools accountable "in a respectful way" for upgrading air systems. "School districts have gotten tens of billions of dollars. Let's make sure that they're using it for improving ventilation and filtration. Many schools have; some schools have not.

"Assuming [the] FDA and CDC do their thing," he said, vaccines that combat newer Covid-19 variants should be on the way in "about three weeks."

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What We're Reading

"Investigators say there was so much fraud in federal Covid-relief programs that — even after two years of work and hundreds of prosecutions — they're still just getting started," according to The New York Times.

Trauma centers in San Diego are being overwhelmed, surgeons say, due to an increase in falls from higher border walls that have led to a surge in admissions, more severe industries and deaths, MedPage Today reports.

A message from PhRMA: