On March 13, 2019, Health and Human Services (HHS) Secretary Alex Azar testified on President Donald Trump’s proposed 2020 budget during a hearing before the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and Related Agencies.
Azar Testimony
In his lengthy initial testimony, Secretary Azar touted the Agency’s record over the last couple of years, including affordable healthcare options. He stated that the proposed reforms included in Trump’s budget would deliver patient-centered affordable healthcare, noting that it maintains pre-existing condition protections and modernizes Part D to reduce out-of-pocket costs. The budget also supports HHS’ five-point strategy to fight the opioid crisis and President Trump’s initiative to end the HIV epidemic. Azar also announced that the Food and Drug Administration (FDA) proposed policies to prioritize the enforcement of age limits on flavored tobacco products and require all flavored e-cigarette products to submit premarket application to the Agency no later than August 8, 2021.
Opening Statements
Azar was hit with fire from all members in the opening statement period, with Subcommittee Chairwoman Rosa DeLauro criticizing the Trump Administration’s “undermining” of the Affordable Care Act, including promoting short-term, limited-duration insurance (STLDI) plans and promoting a repeal of the law. While she was positive and encouraged by the Administration’s focus on HIV, she criticized cuts to Centers for Disease Control (CDC) and Health Resources and Services Administration (HRSA) funding. She also criticized cuts to the Global AIDS Program and to PEPFAR, saying that it was “robbing Peter to pay Paul,” in addition to criticizing cuts to the National Institutes of Health. She called the proposed reductions in Medicaid funding “counterproductive” to resolving the opioid epidemic.
Ranking Member Tom Cole echoed Chairwoman DeLauro’s sentiments on the NIH, saying that the Committee had historically increased NIH’s budget to send a message to young scientists that their work was valued and would continue to be valued. He also called the $1.3 billion in cuts to the CDC a “risky mistake.” However, he did praise some parts of the proposed budget, including investments in protections against bioterrorism and pandemics and reforms to the insurance market. He noted that the budget cannot be balanced by chipping away at needed programs, but policymakers would need to look at entitlement reform and work to make spending sustainable in the long term.
Appropriations Committee Chairwoman Nita Lowey called the budget “incomplete” and an “attack on public health.” She especially criticized the cuts to the CDC and NIH, referencing the bipartisan tradition of support for those agencies.
Discussion and Questions
Prescription Drugs
As is to be expected, the pricing of prescription drugs was a hot topic throughout the hearing. When asked how the proposed rule on drug rebates to pharmacy benefit managers (PBMs) in Part D would help seniors, Secretary Azar said it would immediately help, as it would bring down copays and place $29 billion in rebates into consumers’ pockets. He also mentioned the importance of reducing the incentive to set high list prices.
When asked if he would support direct negotiations on Medicare by HHS, he did not give a direct answer, instead noting that such a move would require a single national formulary and beneficiary choice and access questions would need to be reviewed.
Chairwoman DeLauro mentioned the International Pricing Index (IPI) demonstration for Part B drugs and asked for a status update on its progress. Secretary Azar reiterated HHS’ commitment to the idea and mentioned that the Agency is currently analyzing feedback and working on a notice of proposed rulemaking (NPRM). He also noted the IPI demonstration was for Part B instead of Part D because plans are already able to get price discounts comparable to European drug prices through negotiation, with the exception of protected classes, which plans are not allowed to negotiate.
Research and Health Agencies
As noted above, many of the members had an issue with the cuts to NIH. Committee Chairwoman Lowey called NIH funding a top priority and asked how many NIH grants would need to be cut as a result of the funding reductions. Secretary Azar replied that it would depend on the size of the grants in question but said that HHS was doing the best it could within the budget cap framework. Representative Pocan mirrored this criticism, saying that the cuts would affect thousands of grants.
Representative Barbara Lee turned the attention to the HIV and AIDS crisis, noting the importance of maintaining a unified national and global strategy on HIV and AIDS. Secretary Azar said that part of the international cuts come from beneficiary countries reaching stability and that they could handle HIV prevention and treatment by themselves.
Medicare & Medicaid
One criticism of the Medicaid portion of the budget was the proposal to transform Medicaid into a block grant, noting that substance use disorder (SUD) coverage relies on Medicaid, while Azar noted that grants to states would help them to focus on the originally-targeted populations instead of the expansion populations. Representative Katherine Clark noted that Medicaid expansion states provide triple the opioid treatment to their citizens as compared to non-expansion states and wondered if the Administration would be able to guarantee access to opioid treatments under a block grant. Secretary Azar stated that it would be up to the individual states to make their own choices.
Conclusion
The president’s budget proposal has typically served as a “jumping off point” for budget discussions in prior years. Only time will tell how this budget proposal is treated, and how much of it is actually turned into the final FY 2020 budget as approved by Congress and the President.