Weekly Update for Week Ending July 24, 2020

Weekly Update for Week Ending July 24, 2020

Despite the coronavirus emergency, TSCL is continuing its fight for you to protect your Social Security, Medicare, and Medicaid benefits.  We have had to make some adjustments in the way we carry on our work, but we have not, and will not stop our work on your behalf.

Last week was a busy one in Congress.  There are 3 reasons for that.  First, the worsening of the coronavirus pandemic in many more states and the need to pass another major piece of legislation to deal with its effects.

Second, the end of the 2020 fiscal year is drawing ever nearer, and Congress needs to pass legislation to fund the government for fiscal year 2021, which begins on September 1.  And finally, the end of July and beginning of August, the month that Congress traditionally is in recess.

We tell more about all of those below.

President's Executive Order to lower Drug Prices

The big news at the end of last week was President Trumps four executive orders that are supposed to lower prescription drug prices.  Lowering those prices was something he campaigned on in 2016 and has talked about since, but this is the first time he has taken action.

TSCL is supportive of the President's efforts, but we are taking a wait-and-see approach because, as so many things are in Washington, D.C., the devil is in the details.

Here is why we say that.

One of the orders would allow for the legal importation of cheaper prescription drugs from countries like Canada.  The second would require discounts from drug companies now captured by middlemen that are then passed on to patients.

A third order seeks to lower insulin costs and the fourth order would require Medicare to purchase drugs at the same price that other countries pay.

The President describe this last order as the “granddaddy” of the four orders, but he also promised to drop the plan if the drug companies can come up with a better one within the next month.

Big Pharma, the lobby of the big drug companies, criticized the order right away and said  the move was “a reckless distraction that impedes our ability to respond to the current pandemic – and those we could face in the future.”

Top executives of the big drug companies have requested a meeting with White House officials this week to discuss how they can lower drug prices.

In addition, Wall Street analysts were skeptical that the orders would have much effect on drug makers and said they could prove difficult to implement in practice.

This order is not only vehemently opposed by the pharmaceutical industry but also by many conservative groups that have otherwise been supportive of Trump during his time in office.

In addition, the plans in his orders all have limitations.  For example, the rebate order comes with a caveat that any plan cannot increase seniors' premiums, the unworkable problem that led the administration to kill its original rebate rule last year.

The orders are not immediately enforceable. Health officials have been working on ways to implement some of the proposals — namely guidelines for states to implement importation plans. But it is unlikely that any could be finalized before the November presidential election, particularly since the most favored nation plan would not progress for at least a month.

The order that encourages importation of cheaper medicines by states, wholesalers, and pharmacies, is an effort already in the works since last year.

And the order that directs clinics that qualify for steep pharmaceutical discounts under a government program for low-income patients to pass savings on insulin and EpiPens directly to those patients only applies to about 1,000 community health centers, not to hospitals that are frequently flagged as diverting the discounts away from patients toward other programs.

As we said, TSCL is supportive of intentions of these, and other efforts on the part of both parties to lower prescription drug prices.  However, we also have our own concerns.

We are closely watching how the foreign drug index would be structured and evaluating how prices would be adjusted.  We are highly concerned that a greater portion of the high cost of these drugs that are administered in doctors offices and clinics could wind up getting shifted to Medicare patients either in the form of higher co-pays and co-insurance, or higher premiums.

Years ago, drug legislation was passed that made importation of FDA approved drugs from Canada legal, but the Department of Health and Human Services (HHS) secretary was required to certify the safety of the drugs.  So far, no HHS secretary has been willing to do so, despite regular efforts to get importation going.

Thus, we are watching to see how this Administration would do things differently this time.  In addition, there are concerns on the Canadian side about the timing.  Canada is concerned this could cause drug shortages, particularly for drugs used to treat COVID-19 further exacerbating tensions with one of our nation’s closest allies and trading partner.

Trump Gives up his Demand for a Payroll Tax Cut

The other good news for seniors last week was the apparent victory of TSCL and other groups to stop the payroll tax cut.  President Trump has been demanding the cut for months, and he had stated that he would not sign any new pandemic relief legislation if the payroll tax cut were not included.

However, he has apparently given up his demand.

TSCL has been fighting to stop a payroll tax cut for months because of the damage it would do to the Social Security and Medicare trust funds.  Last week we contacted both Senate and House leadership in both parties to reinforce our opposition.

New legislation to help the economy and give relief to the American people is urgently needed because at the end of this week the $600/month that unemployed workers were receiving will expire.  In addition, there has been an order in place stopping any evictions of people from their homes if they fell behind in the mortgage payments or rent.  That also expires at the end of this week.

The House of Representatives has already passed legislation dealing with those problems and more, but there has been a great deal of fighting between the Republican Senators who are the majority in the Senate, and also between the Senate and the President.

Over the weekend it was announced that the Senate and the White House were able to come to an agreement about new legislation and it will be presented today.  However, reports are that the GOP bill will cost about $1 trillion while the House-passed bill has a cost of $3 trillion.  That means there will have to be major negotiations between the House and Senate once the Senate finally passes its bill.

Looming over all of this is the traditional August recess of Congress.  That tradition started back before the discovery of electricity and therefore air conditioning.  August is normally the hottest month of the year in Washington so they would all leave town to go somewhere to stay cool.

Even though all federal government buildings are now air conditioned, Congress has continued with that tradition.

The Democratic leadership in the House has announced that the House will not take its August break until the next pandemic relief legislation is passed but so far we have seen no indication regarding the intentions of the Republican-run Senate.  As of right now, the Senate is scheduled to be out of session from August 10 until September 7.

House Passes first FY 2021 funding bills

As we said earlier, the end of the federal government's 2020 fiscal year is fast approaching and unless Congress can pass new funding legislation before then, we face the possibility of another government shutdown.  Last week the House of Representatives passed a four-bill fiscal 2021 spending package, advancing its first annual funding measure of the year. The legislation includes State and Foreign Operations, Agriculture-FDA, Interior-Environment, and Military Construction-VA funding.

The House has been working on the other funding bills but whether or not they are able to pass any of them before the August break is uncertain.  So far, the Senate has not managed to pass any of the needed funding bills.

Even if Congress is not able to pass all the funding bills by the end of the fiscal year on September 30, we doubt there will be a government shutdown.  It is most likely they will pass as many “continuing resolutions” as they need, as they have done in the past, to avoid a shutdown.

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For progress updates or for more information about these and other bills that would strengthen Social Security and Medicare programs, visit the Bill Tracking section of our website or follow TSCL on Twitter.