Daschle to Assume Dual Health Policy Roles

January 5, 2009

Former Senate Majority Leader Thomas A. Daschle (D, SD) will become the nation’s health care policy czar with enormous influence on health care policy and reform. In addition to being named secretary of the vast 65,000-employee Department of Health & Human Services (HHS)-home of the FDA, the Centers for Medicare & Medicaid Services (CMS), and the NIH-

Former Senate Majority Leader Thomas A. Daschle (D, SD) will become the nation’s health care policy czar with enormous influence on health care policy and reform. In addition to being named secretary of the vast 65,000-employee Department of Health & Human Services (HHS)-home of the FDA, the Centers for Medicare & Medicaid Services (CMS), and the NIH-he has insisted on a second role: chief health care policy advisor to incoming President Barack Obama and his administration. In this dual role, Daschle not only will assume the administrative role filled by former HHS secretaries but also will be the major voice in determining the direction of the new administration’s agenda for change. Until now, these duties typically were taken on by presidential advisors operating independently of the HHS.

The selection of Daschle elicited wide support. “Senator Daschle brings to the position an impressive and deep background of health care policy expertise,” said James C. Greenwood, president and CEO of the Biotechnology Industry Organization, echoing the view of Billy Tauzin, president and CEO of the Pharmaceutical Research and Manufacturers of America, that Daschle was a “wise choice.” Tauzin went on to note that the HHS nominee “has what it takes to do the job-smarts, toughness, and a strong understanding of the health care challenges that face the nation.” Bruce T. Roberts, executive vice president and CEO of the National Community Pharmacists Association, noted, “during his time in the Senate, Mr Daschle embraced commonsense policies that allowed our more than 23,000 members to operate on a level playing field in providing patients with their health care needs.”

Daschle brings to the task both political savvy and a great deal of specific knowledge of the way health care is delivered and paid for. Until he lost his Senate seat in 2004, he was the Senate Majority Leader. In recent years, he has been on the board of the Mayo Clinic; has served as a public policy advisor at Alston & Byrd, a law firm that represents such clients as Abbott Laboratories and the Generic Pharmaceutical Association in HHS proceedings; and has written a book, Critical: What We Can Do About the Health-Care Crisis, which was published in 2008.

Daschle can also call on another advantage: the great confidence that Obama has in him. He has been a mentor of the President-elect (Obama hired many of the outgoing senator’s aides for his own office staff) and was one of the key persons who urged the junior senator from Illinois to run for president. Obama has praised Daschle’s “fresh thinking” on improving the health care system and lauded his ideas on proposed compromises among the conflicting positions of the many players. As Sen Ron Wyden (D, Ore) explained, “On the premier domestic issue of our time, the President-elect sees Tom Daschle with the skills and abilities to bring people together and get this over the finish line.”

However, while Obama and Daschle agree that the nation needs to continue its multilayered system of health care coverage and both are likely to back such pharmaceutical-related issues as easing the ban on the reimportation of prescription drugs and authorizing the CMS to bargain more forcefully for discounts on the medications it pays for, they have different opinions on some issues. The most important difference is that although during the presidential campaign Obama stated that the federal government should not demand that all US adults obtain health insurance, Daschle thinks that obtaining health care insurance should be mandatory. One of the first clues to the extent of Daschle’s influence will be how this issue is addressed in the health care reform legislation that the new administration plans to unveil later this year.

Obama’s selection of Peter R. Orszag for director of the Office of Management and Budget should greatly help Daschle achieve health care reform. In Orszag’s previous job as director of the Congressional Budget Office, he repeatedly spoke of the need to contain health care expenditures in order to boost the US economy.

Major Committee Change, Minor Impact Expected
The dramatic and unusual ouster by Democrats in the House of Representatives of Rep John D. Dingell (D, Mich) as chair of the Committee on Energy and Commerce should have an impact on many industries, but not necessarily on pharmaceutical manufacturers, even though the committee oversees all health care reform legislation.

Rep Henry A. Waxman (D, Calif) had been his party’s second in command on the committee for most of the 28 years during which Dingell was the top Democrat on the panel. Waxman finally challenged Dingell for the top spot because he wants to push through more activist legislation than Dingell had supported. The ideological difference between them has focused on energy and environmental issues. Dingell has been less enthusiastic than Waxman about strict measures to limit global warming and to promote clean air and fuel efficiency that would significantly affect the auto industry, which is centered in Dingell’s home state.

However, Dingell and Waxman have generally been allies on health matters. “Their joint accomplishments on behalf of poor working families and children and pregnant women and people with disabilities and the frail elderly simply cannot be overstated,” noted Sara Rosenbaum, JD, chair of the department of health policy at George Washington University. Moreover, both men have been vocal critics of the pharmaceutical industry. Dingell held hearings lambasting pharmaceutical manufacturers over direct-to-consumer advertising and the FDA for being too lax about drug safety. Waxman, in his former post as chair of the House Committee on Oversight and Government Reform, railed against promotions of approved drugs for off-label uses and the Bush administration position that individual patients are prevented from suing drug manufacturers with charges that warnings on FDA-approved labels were not strong enough.

Dingell was an effective committee chair, but Waxman is expected to be even more skilled at moving the Obama administration’s health care reform measures through the House. “Waxman elevates to a high art the blend of substantive policy knowledge, advocacy of policy improvements, and excellence in strategic execution,” said Robert Greenstein, founder and executive director of the Center on Budget and Policy Priorities.

CMS to Test EHR Program for Medicare Beneficiaries
The CMS plans this month to launch a pilot program to determine if a little encouragement-and bargain fees-will prompt seniors to create complete electronic health records (EHRs). “An electronic record can easily follow a patient to a new city or a specialist across town,” explained Kerry N. Weems, acting CMS administrator, as he announced the new program. “The purpose is not to save money but to improve quality of health.” For example, a pharmacy could easily check which other medications a customer is taking before filling a prescription. Similarly, an EHR could enable a physician who is developing a treatment plan to find out which previous interventions have been tried.

The test will be run in Arizona and Utah, which were chosen because each state has a diverse mix of rural and urban Medicare enrollees; in addition, Arizona has already made health information technology a priority. If the program is successful in these 2 sites this year, the CMS plans to expand it to other states, with the goal of 1 million Medicare EHR users by 2012.

More than 40 vendors of EHR systems competed to be included in the pilot program, and the CMS eventually chose PassportMD, NoMoreClipboard, HealthTrio, and Google Health. Each vendor will do its own marketing and set its own pricing; some will offer free participation, and some will offer lower rates than those charged by vendors who are not part of the Medicare test. Each company will also establish privacy policies. The CMS has allotted $2.5 million for administrative costs but will not make payments directly to vendors.

Federal Court Upholds Ban on Rx Data Mining
New Hampshire’s attempt to ban prescription data mining received a new lease on life. The state legislature in June 2006 limited access to individual physicians’ prescribing histories to prevent pharmaceutical manufacturers from using them to determine which physicians to target in an effort to increase the use of their products. The lawmakers thought that the process stimulated sales of brand-name drugs rather than generics, thereby raising total health care outlays.

But in April 2007, Judge Paul Barbadoro of the US District Court in New Hampshire threw out the statute, finding that it “unconstitutionally restricted speech without directly serving the State’s substantial interests.” He ruled in a challenge brought by 2 data-mining firms, IMS Health and Verispan (acquired by SDI, a health care analytics firm, in July 2008).

That ruling was reversed on November 18 by the First US Circuit Court of Appeals in Boston in a decision that reinstates the law (IMS v Ayotte [No. 07-1945]). The 3 appellate judges explained that the ban on commercial use of individual prescribing information is reasonable because the implications of such data mining are “mind-boggling” and lets pharmaceutical company sales personnel “encourage the overzealous prescription of more costly brand-name drugs regardless of both the public health consequences and the probable outcome of a sensible cost/benefit analysis.”

The ruling is expected to prod other jurisdictions to pass similar laws. “This decision lifts a cloud of doubt that has hung over the passage of similar laws in other states,” declared Sharon Treat, executive director of the National Legislative Association on Prescription Drug Prices.

In Other Legislative and Regulatory News . . . The FDA is interviewing 1500 consumers for a research project to decide if direct-to-consumer television advertising for prescription drugs should contain a telephone number that patients can call to report adverse effects. Such a toll-free number must now be included in print ads, and Congress instructed the FDA to report in March about whether including the number in television ads would be helpful or would detract from other safety information. The FDA says it needs more time to complete its report.

The FDA opened its first overseas offices, sending 8 US employees to 3 cities in China: Beijing, Shanghai, and Guangzhou. The US staff, who will be supplemented by local hires, will inspect local pharmaceutical and food plants to certify that their output is fit for export to the United States and supervise inspections conducted by private labs and Chinese government agencies.

Most Part D enrollees have either only a vague understanding or none at all of the “doughnut hole” coverage gap, according to a survey by Medco Health Solutions. Interviews with 1000 randomly selected Medicare beneficiaries found that 62% do not fully understand how the coverage gap works, and another 28% either do not understand it at all or do not even know that it exists as part of their coverage. Results were somewhat better for beneficiaries who had actually reached the coverage gap: 39% of such enrollees said that the information about the coverage gap that they had received from their plan at that point fully explained the system.