Bush Unveils Avian Flu Pandemic Plan
President Bush this week showcased his plan to protect U.S.
citizens from what he described as an inevitable avian influenza pandemic,
asking Congress
for $7.1 billion in emergency funding as an “investment” providing
for vaccine production, creation of a treatment stockpile, development of a
coordinated U.S. pandemic response and other strategies.
While emphasizing there is no pandemic currently, in the U.S. or elsewhere
in the world, and it is not known if the current bird flu virus will or could
cause such a pandemic, he stated public health and medical experts agree a
pandemic will occur. When this will happen and how severe it will be are not
known.
The main monies requested break out this way: $251 million
for global bird flu detection and control; $2.8 billion for developing new
cell-culture technologies
to accelerate vaccine development and increase manufacturing capability and
capacity; $800 million for development of new treatments and vaccines; $1.519
billion for HHS and the Department of Defense to purchase flu vaccines; $1.029
billion to stockpile 20 million doses of antiviral medications, with states
paying up to 75% of the cost, and $644 million so that state and local governments
can prepare response plans.
A new government website, www.pandemicflu.gov, will keep
people informed and educated about how to decrease their risk and how to respond
appropriately
in an emergency situation.
The Senate this week moved ahead of the president, approving $8 billion as
part of the Labor/HHS appropriations bill to fund a national avian influenza
preparedness program. The White House plan received mixed reviews from Capitol
Hill with some Democrats calling it “too little too late.”
The President said the Administration is sending to Congress a request that
liability protection legislation be enacted, which he described as essential
to an effort to increase the number of vaccine manufacturers. When speaking
with reporters after his testimony Wednesday before the House Appropriations
Labor-HHS Subcommittee (see related Inside Track article), HHS Secretary Mike
Leavitt stated that liability protections, a cornerstone of the Administration
strategy, should apply only to vaccines and treatments for pandemic flu, not
across-the-board to all manufacturers or all vaccines.
Apart from appropriations, other legislative provisions related to pandemic
flu are under consideration by both House and Senate Committees. In the Senate,
there is an effort to bring a broad biodefense bill to the floor that includes
liability protections related to biodefense products as well as to avian flu
vaccines. In the House, no biodefense legislation appears to be under consideration,
although members have indicated an interest in doing something targeted to
bird flu.
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USDA Works to Answer Pandemic Plan Questions
USDA moved to put the Administration’s avian influenza
pandemic action plan in context, letting the public know properly cooked poultry
products pose
no risk to consumers and urging the media to not “over react” to
any findings of low pathogen bird flu that may occur. USDA
also explained it is actively monitoring both domestic and wild bird populations
and emphasized it has all the resources and authority it needs to deal with
any outbreak.
Secretary of Agriculture Mike Johanns announced USDA requested $91 million,
the first request as part of the president’s funding proposal. $10 million
will go to stockpiling animal vaccines; $32 million to surveillance and diagnostic
measures for wildlife and training; $6 million for biosecurity measures to
rapidly contain an outbreak; $9 million for trade compliance and smuggling
intervention; $7 million for research, and $9 million for planning and preparedness
training and the development of simulation models.
In an ironic development, governments around the globe, particularly in Europe,
told their poultry producers who raise birds in outdoor “open” or “free
range systems” to move birds indoors to avoid infection from wild birds.
USDA acknowledged it is discussing the possibility of ordering producers of
pasture-raised or free-range birds to confine flocks if high path bird flu
is found in the U.S. Industry has long touted controlled environment housing
as one of the most effective means of keeping poultry disease free.
USDA conducts over a million commercial bird flu tests every year and the
U.S. Geological Survey and other federal agencies conduct another 12,000 tests
on wild bird populations. Return to top
Leavitt Defends Flu Plan
Secretary of HHS Mike Leavitt appeared before the House Appropriations
subcommittee on Labor-HHS Wednesday at a hearing on the administration’s
proposed pandemic influenza plan. This hearing, one of the many in both the
House and Senate this week, included witnesses Dr. Julie Gerberding, Director
of the Centers for Disease Control (CDC) and Dr. Anthony Fauci, Director
of the National Institute of Allergy and Infectious Diseases (NIAID) at NIH.
As Leavitt laid out the six components of the HHS emergency budget request
- international and domestic surveillance, vaccines, antiviral drugs, communication
and state and local preparedness – he emphasized the importance of
having flexibility in the use of funds and a public health system that is
able to handle a pandemic. He noted hospitals do not currently have a sufficient
surge capacity.
In terms of vaccines, Leavitt said currently the U.S. does not have the
ability to manufacture a sufficient quantity of vaccines. Under the proposed
plan, HHS has two objectives, creation of a stockpile of 20 million vaccines
of the best available strain and developing the capacity to deliver an additional
300 million courses of an exact strain in six months. Accomplishing this
will require expansion of egg based vaccine production, development of new
and innovative ways to develop and manufacture vaccines, such as cell-based
methods; and development of dose-stretching technologies, such as the use
of adjuvants and new vaccine delivery systems.
On the issue of liability, Leavitt assured the committee that many meetings
have occurred with the vaccine manufacturing community, which has provided
assurances they will help. However, he said the companies need issues of
liability addressed, assurance there will be a market for the vaccines and
a streamlining of the regulatory process. The companies also are concerned
with how to keep facilities “warm” when not producing for a pandemic.
Reps. Nita Lowey (D-NY) and Rosa DeLauro (D-CT) criticized the administration
for saying the “sole” reason for a decrease in the number of
vaccine manufacturers is concern over liability. Leavitt noted there is a
substantial difference in risk in the production of an annual flu vaccine
and creating something brand new. At the same time Fauci recognized while
in reality the actual risk may be minimal, the fear and perception of manufacturers
is very strong.
Members of Congress expressed concern over the plan's imposing
an “unfunded
mandate” on the states. Rep. Kay Granger (R-TX) criticized the plans
reliance on states footing part of the bill, asking Leavitt if he knows whether
states can and will allocate the funding. Leavitt emphasized the government
would be paying a significant portion of the cost for stockpiling antivirals.
In terms of preparation, he said it is important for all states to develop
their own plan. The proposed budget allocates money to help the states do
their own planning.
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Senate Passes Budget Reconciliation
On Thursday, the Senate met a self-imposed deadline and
passed its Budget Reconciliation bill, after several days of discussion,
debate, and amendments
that were surprisingly free of rancor. Medicaid- and Medicare-related
provisions as reported by the Senate Finance Committee remained largely as
the Committee had reported them. Among the successful amendments were:
• Sen. Jeff Bingaman (D-NM), to limit decreases in states’ Medicaid
federal matching payments (FMAP) and to establish Medicaid rebates for drugs
provided to Medicaid beneficiaries in managed care plans. The amendment passed
by a vote of 54-45.
• Sen. Gordon Smith (R-OR), to appropriate $450 million for a five year
demonstration program under which states could receive waivers to provide
Medicaid health services to HIV-infected individuals whose incomes do not
exceed 200% of poverty. The cost of this program is covered by an increase
in the Medicaid rebate for single-source and innovator multiple-source drugs
from 17% to 17.8%. The amendment passed by voice vote.
• Sen. Kent Conrad (D-ND), to increase prescription drug payments to “critical
access retail pharmacies,” namely pharmacies at least 20 miles from
another pharmacy. This is paid for by an increase in the Medicaid drug rebates
paid by manufacturers to 18.1%. The amendment passed by voice vote.
• Sen. Max Baucus (D-MT), to exclude discounts provided
to mail order and nursing care facilities pharmacies from the calculation
of the average manufacturer
price (AMP). This is paid for by extending drug discounts to Medicaid managed
care organizations. The amendment passed by voice vote.
Two failed amendments would have affected
the pharmaceutical industry if passed. One was offered by Sen.
Charles Schumer (D-NY) to strike from the
Senate Finance Committee language the increase in rebates for generic drugs.
Sen. Charles Grassley (R-IA), Chair of the Finance Committee, opposed the
amendment, arguing it undermined his bill’s attempt to be fair
in its treatment of rebates. The amendment failed on a vote of 50-49.
The second amendment, offered by Sen. Olympia Snowe (R-ME) on behalf of
herself, Sen. Ron Wyden (D-Or), and others, would have addressed the debate
about the so-called “non-interference clause” in the Medicare
Modernization Act. Snowe’s amendment explicitly would have allowed
the Secretary of HHS to negotiate drug prices for Medicare beneficiaries.
The amendment failed on a procedural motion.
The reconciliation bill passed by a vote of 52-47. The House
is expected to begin deliberations on its Budget Reconciliation bill next
week.
Significant differences between the House and Senate bills remain and will
need to be resolved once the full committee adopts its bill.
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CMS Publishes Physician and Hospital Outpatient
Payment Rules
The 2006 Medicare hospital outpatient payment rule and physician fee schedule
were published by Centers for Medicare & Medicaid Services (CMS) November
2. As expected, payments to physicians will be reduced by 4.4%. Other changes
in payment policies include expansion of coverage for glaucoma screening to
include Hispanic Americans, who also are at high risk; changes in payment that
will result in a small increase for drugs furnished by End Stage Renal Disease
(ESRD) facilities; and a temporary (one year) add-on payment for intravenous
immunoglobulin (IVIG), to account for increased demand in physician offices
and current allocations of product (CMS argues in the rule the pricing for
IVIG is accurate and there is no product shortage).
In a victory for oncologists and numerous Members of Congress who supported
an oncology quality-of-care demonstration project, CMS is announcing a new
demonstration project that will focus on treatment for specified types of cancer.
The agency states the project will last one calendar year and will produce “information
on coordination of care, treatment design, and patient monitoring.” Enthusiasm
was tempered, however, by the failure of the hospital outpatient rule to bump
reimbursement for drugs to ASP + 8%, instead retaining an ASP + 6% rate.
CMS also took the opportunity of the physician fee schedule to provide payment
rates under the new and somewhat controversial Competitive Acquisition Program
(CAP). Under this program physicians will have an option to purchase drugs
from vendors who have negotiated discounted prices with CMS, rather than receive
payment for their drugs at the ASP-based rate. CMS’s implementation of
the CAP program, announced several months ago, was delayed, reportedly because
of technical difficulties and no vendors were interested in bidding under the
agency’s anticipated rules.
In a swift negative response to one aspect of the hospital outpatient rule,
House Ways & Means Committee Chair Bill Thomas (R-CA) issued a statement
saying he believes the regulation is inconsistent with congressional intent
to bring healthcare spending under control. Specifically citing unequal payment
rates for what he termed “equivalent drugs,” Thomas said the regulation “incentivizes
providers to choose one drug over a therapeutically-equivalent drug in order
to maximize reimbursement.” Thomas stated further that CMS’s failure
to establish the same rates of reimbursement for “functionally equivalent” drugs
will result in increased co-payments and Part B premiums for Medicare beneficiaries.
Specific changes for hospital outpatient services include increasing payment
rates for covered screening exams, setting a maximum coinsurance rate of 40%
(compared with 45% last year), and setting payment for most Part B covered
drugs at ASP + 6%. Blood and blood products will be covered using a different
methodology.
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USDA, HHS Announce Meeting on Regulatory
Jurisdiction
The Departments of Agriculture and Health & Human Services announced
a public meeting, to be held December 15, to take public comment on
the appropriate approach to regulating products containing meat and
poultry. While this falls under the regulatory purview of USDA, it
also sometimes falls under the jurisdiction of FDA.
Over the years, the seemingly irrational approach to regulating these
kinds of products has caused some to recommend establishing a “single
food agency.” Indeed, during the Presidential campaign, President
George W. Bush commented that it seemed unusual USDA regulates pepperoni
pizza while FDA regulates cheese pizza. The announcement of the upcoming
meeting cites the regulation of corn dogs by the Food Safety and Inspection
Service (FSIS) and bagel dogs by FDA.
An FSIS-FDA working group has recommended that products containing
primarily meat or poultry (meat sandwiches, for example) be regulated
by FSIS and FDA regulate foods where meat and poultry are flavor enhancers
but “do not contribute to the identity of the product” (such
as pizza).
The purpose of the meeting, which will be held in Rosemont, IL, is
to present the suggested approach to the public for comment, as well
as to help assess, from public comments, the anticipated costs that
could be associated with the new regulatory scheme.
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Grassley, Dorgan Lose Amendment to Cap Farm Program Payments
An effort by Sen. Charles Grassley (R-IA) to cap farm programs payments
failed this week when colleagues refused to waive budget rules to debate
the amendment. Grassley has tried to cap farm program payments going
back to his days as a member of the House.
Grassley had joined Sen. Byron Dorgan (D-ND) in offering an amendment
earlier in the week to the Senate budget reconciliation package to
cap farm program payments at $250,000 for a married couple and $125,000
for a single farmer. The current limit is $360,000. The senators said
their amendment would save $1.1 billion over five years by removing
from the rolls of recipients large producers and corporate-owned farms.
The move set off a farm program payment Civil War as the northern
state senators’ amendment was immediately assailed by southern
senators since most of the large farms affected by the amendment are
in the South. Sen. Blanche Lincoln (D-AR) said the Grassley/Dorgan
amendment breaks a promise made to producers in the 2002 Farm Bill
and that payment limits should be part of the upcoming Farm Bill debate,
not the budget package.
Grassley and Dorgan said the savings could be used to restore some
of the spending reductions approved during the Senate Agriculture Committee’s
recent reconciliation action, first by delaying the 2.5% across-the-board
cut in farm program payments for 2006 and then by restoring more than
50% of the cuts to the Conservation Reserve Program and up to 75% of
the cuts to the Conservation Security Program.
The amendment was successfully challenged by Sen. Saxby Chambliss
(R-GA), chair of the Senate Agriculture Committee, on a budget point
of order. Fifty-four senators agreed with Chambliss.
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Farm Bill Debate Heating Up; Enviro Group Releases Update Payment
List
The debate across the country over the direction of the next Farm
Bill continues to heat up. In North Dakota recently, Sen. Kent Conrad
(D-ND) and former Rep. Larry Combest (R-TX), chair of the House Agriculture
Committee during the 2002 Farm Bill and now a lobbyist, urged farmers
to fight to keep current farm programs in place, while critics called
for wholesale change.
The Environmental Working Group (EWG), which became infamous during
the 2002 debate for amassing and printing a list of all farm program
payment recipients, including celebrities and politicians, this week
released its updated listing (www.ewg.org), “incorporating $12.5
billion in payments made in calendar year 2004 to more than 1.4 million
subsidy recipients is listed on the web site.”
EWG says 22 of 435 House districts received more than half of all
payments or $69 billion. Further, “American taxpayers spent a
staggering $143.8 billion” over the last 10 years, with $104
billion or 72% going to 10% of recipients – 312,000 farms, cooperatives,
partnerships and corporations.
Return to top Portman Says EU Must Cut Deeper
The European Union’s (EU) second offer on trade distorting ag
subsidy reductions is too little and U.S. Special Trade Representative
Rob Portman urged the EU to promise deeper cuts at meetings next week
in Europe.
Portman, testifying at a House Agriculture Committee hearing on the
status of the WTO trade talks, said if the EU does not offer greater
reductions in its subsidies, then it’s likely the December ministerial
meeting will collapse. The U.S. has offered to cuts its subsidies by
up to 65% in exchange for offers on tariff reduction and market access.
The EU countered the U.S. offer by saying it would reduce subsidies
by an aggregate 46% -- Portman said the real figure is 39%.
Secretary of Agriculture Mike Johanns, testifying at the same House
hearing, said that any WTO deal on agriculture hinges on “a better
proposal by the EU,” explaining any EU offer must include “real
market access.”
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Animal Rights Terrorism Language Introduced in House
Rep. Thomas Petri (R-WI) introduced Friday a bill that
would amend the Animal Enterprise Protection Act section of the federal
criminal
code to impose stricter penalties and a greater number of causes
of action. Similar to S.1926 introduced last week in the Senate by
Sen. James Inhofe (R-OK), the bill would also, for the first time,
criminalize “tertiary targeting” – the practice
by animal rights groups of harassing and intimidating companies which
do business with a target firm, or terrorizing neighbors, friends
or colleagues of targeted individuals.
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New Bills
A number of new bills have been introduced. Click
here to send a request for a copy of the text or more information about
the bill.
S.1952
Sen. Norm Coleman (R-MN) introduced a bill to provide grants for rural
health information technology development activities.
S.1956
Sen. Sam Brownback (R-KS) offered the Access, Compassion, Care, & Ethics
for Seriously Ill Patients Act or the “ACCESS Act.” This
legislation would create a new three-tiered approval system for drugs,
biological products, and devices that is responsive to the needs of
seriously ill patients under the Federal Food, Drug & Cosmetic
Act.
S.1960
Legislation proposed by Sen. Jim Bunning (R-KY) would establish minimum
standards for the testing of steroids and other performance-enhancing
substances and methods by professional sports leagues.
H.R.4179
Rep. John Salazar (D-CO) offered a bill that would authorize appropriate
action if negotiations with Japan to allow the resumption of U.S.
beef exports are not successful.
H.R.4218 & H.R.4219
Rep. John McHugh (R-NY) introduced language to provide a 100 percent
deduction for the health insurance costs of individuals. McHugh also
proposed a bill to allow individuals a refundable credit against
income tax for the purchase of private health insurance.
H.R.4223
Legislation offered by Rep. Bill Pascrell (D-NJ) would prohibit cuts
in Federal funding under the Medicaid Program until full consideration
is given to recommendations of a Bipartisan Commission on Medicaid.
H.R.4221
A bill offered by Rep. Robert Aderholt (R-AL) would amend the Internal
Revenue Code to provide special rules for the exchange or installment
sale of certain agricultural property.
H.R.4229
Rep. Carolyn Maloney (D-NY), with 38 cosponsors, introduced a bill
requiring the FDA Commissioner to determine whether to allow the marketing
of Plan B as a prescription drug for women 15 years of age or younger
and a nonprescription drug for women 16 years of age or older.
Return to top
Inside
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