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LEGISLATIVE UPDATE FOR JUNE 10, 2015:

Appropriations & Legislative Update


Appropriations Update

The House and Senate Appropriations Committees have been diligently moving the fiscal year (FY) 2016 appropriations bills through Subcommittee and Committee markups.  The House has even passed several bills on the floor.  Both Committees will continue to move bills through the Committee process in June and July.  (See chart below).

Despite the progress made so far, the bills face a very uncertain future.  Recently Senate Minority Leader Harry Reid unveiled his plan to have the Democratic caucus block spending bills from ever reaching the Senate floor.  Reid has vowed that as long as sequestration caps are in place, he would not allow bills to go to the floor.  As the President has already vowed to veto all of the current bills, the Senate Democrats are pushing to avoid a fall-time stalemate and deal with the process now.  The Senate's No. 3 Democrat Dick Durbin recently stated in Politico "Do we have to go through this process ... taking this to September or November? Or can we sit down now, in a timely fashion, and work this thing out? Let's start this conversation. We all agree there is an issue."
 
Many Republicans have agreed that sequestration will need to be dealt with, but prefer to move the bills now and deal with the spending caps later this fall.  They argue that with no sequestration deal in sight, it is best to move the bills with the current caps.  Senator Roy Blount recently stated "The law is the law, and until the law is changed we don't really have any option but to mark these bills up in a way the law would allow." 

Though there is hope a deal will eventually be made to raise the budget caps and eliminate sequestration, there are no emerging leaders stepping out to start negotiating such a deal yet. Add to that there are additional must-do legislation deadlines beyond the end of the fiscal year like the Transportation Trust Fund and reauthorizing the Federal Aviation Administration; many are forecasting the real possibility of another government shutdown.  At the very least, there will be fireworks!

21st Century Cures Act:
On May 21, the 21st Century Cures Act passed out of the House Energy & Commerce Committee on a unanimous 51-0 vote.  The bipartisan bill was introduced by full committee Chairman Fred Upton (R-MI), Rep. Diana DeGette (D-CO), Health Subcommittee Chairman Joe Pitts (R-PA), full committee Ranking Member Frank Pallone, Jr., (D-NJ), and Health Subcommittee Ranking Member Gene Green (D-TX). The bill does several things with the primary intention to boost biomedical innovation through additional funding, incentives and regulatory changes at NIH and FDA.
Passage of the bill was slowed down over the question of how to pay for the bill’s cost, including more than $10 billion over five years in new funds for National Institutes of Health (NIH) and $550 million over five years for the FDA. 


The offsets agreed to include selling 8 million barrels of oil each year for eight years from the Strategic Petroleum Reserve, which the Congressional Budget Office says will bring in $5.2 billion.  A second change modifies the timing of government payments to insurance companies under the Medicare Advantage program so that the government can keep interest earned on the funds rather than the insurer. This measure will bring in between $5 billion and 7 billion.  An additional $2.8 billion comes from reductions in Medicaid payments for certain medical equipment, and finally the bill brings in $200 million by limiting payments for X-rays on film, incentivizing the switch to digital imaging.
Included in the bill is $10 billion in new, mandatory funding for the NIH through the establishment of the Innovation Fund.  This is important because mandatory funding is not subject to the same spending caps that discretionary funding is, and allows for real increases to NIH funding. This received bipartisan support and from all members and is very popular with health and academic groups that support NIH.  HOWEVER, included in the manager’s amendment at Committee markup was a very fundamental change from the draft bill.  The draft bill included a provision that in order for the Innovation funds to be triggered, the appropriators would be required to meet a minimum level of discretionary funding (whatever the FY 16 level turns out to be).  If appropriators do not hit the discretionary FY 2016 level in subsequent years, the mandatory funds will not be made available. This provision was to prevent any cut in NIH spending.  In the manager’s amendment package, however, this provision was eliminated, so there is nothing that precludes the appropriators to cut NIH funding and depend on the Innovation Fund to make up the difference.  Given the pressures faced by the Labor-HHS Subcommittee, this could very well translate to no real funding increases for NIH.  The community hopes to address this issue in the Senate bill and put the funding trigger back in the bill.   
The bill additionally has many provisions to “modernize” the FDA and expand the Patient-Focused Drug Development (PFDD) program.  This includes provisions on biomarkers, accelerated drug development, precision medicine, clinical trials, streamlined data review, expediting patient access, healthcare economic information, antibiotics development, faster reviews for vaccines, continuous manufacturing, re-importation, breakthrough devices and priority review, medical device regulatory process improvements, and humanitarian device exemption for rare disease treatments.
House leaders hope to have a full House vote in June, where given the broad bipartisan support, it should easily pass.  

Status of FY 2016 Appropriation Bills 

HOUSE 

Appropriations                      Subcommittee            Full Committee          Floor

Subcommittee                        Markup                      Markup                      Action

Agriculture

 

 

 

 

Commerce, Justice and Science

May 14

May 20

June 4

Defense

 

May 20

June 2

 

Energy & Water

 

April 15

April 22

May 1

Financial Services

 

June 11

 

 

Homeland Security

 

 

 

 

Interior & Environment

 

June 10

 

 

Labor, Health and Human Services

June 16 or 17

 (not confirmed)

Week of June 22 (not confirmed)

 

Legislative Branch

 

April 23

May 12

May 19

Military Construction/ Veterans Affairs

April 15

April 22

April 30

State & Foreign Operations

June 3

June 11

 

Transportation/Housing and Urban Development

May

May 13

June 9

  

SENATE 

Appropriations                      Subcommittee            Full Committee          Floor

Subcommittee                        Markup                      Markup                      Action

Agriculture

 

 

 

 

Commerce, Justice and Science

June 10*

June 11*

 

Defense

 

June 9

June 11*

 

Energy & Water

 

May 19

May 21

 

Financial Services

 

 

 

 

Homeland Security

 

 

 

 

Interior & Environment

 

 

 

 

Labor, Health and Human Services

June 23*

June 25*

 

Legislative Branch

 

 

June 11*

 

Military Construction/ Veterans Affairs

May 19

May 21

 

State & Foreign Operations

 

 

 

Transportation/Housing and Urban Development

 

 

 

 

*Scheduled, but not yet occurred. 






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