New Ballgame in Washington - Pharmaceutical Executive


New Ballgame in Washington

Pharmaceutical Executive

Blocking funds

In addition to attacking select ACA provisions, Republicans will move to starve implementation of more objectionable health reform programs. Rep. Boehner talks of cutting the federal budget by $100 billion, which will reduce government outlays for non-military discretionary funds down to 2008 levels. One part of this strategy is to curb appropriations needed by the Department of Health and Human Services (HHS), the Internal Revenue Service, and other agencies to establish new ACA initiatives.

Making substantial reductions in federal spending, however, will not be any easier for Republicans than Democrats. With their eye on ousting President Obama in 2012, Republicans will shy away from any talk of reforming social security or Medicare. And most GOP legislators have their own lists of pet programs meriting federal support.

Complicating the situation is the need for Congress to immediately deal with some high-cost issues. The legislators left town early last fall to hit the campaign trail without finalizing the federal budget for fiscal year 2011, which now is months overdue. Medicare fees for physicians will plunge by 25 percent by January 1, 2011 unless the legislators extend that deadline for another year. And important Bush-era tax breaks, which Republicans are eager to retain, also expire Dec. 31 unless Congress renews or extends them now.

Big curbs on government spending could create problems for pharma. Boehner's cost-cutting plan could be devastating to FDA, the National Institutes of Health (NIH), and various health and social programs. NIH would lose about $3 billion, almost 10 percent of its current budget, and new FDA initiatives would fall by the wayside. Even if FDA and NIH escape heavy cuts, increases in resources are unlikely.

More oversight

The Republican takeover of the House also sets the stage for more intense scrutiny of administration policies by the committees responsible for health and biomedical programs. The new leaders of the House Energy & Commerce Committee are eager to grill HHS secretary Kathleen Sebelius and her top aides on health reform cost estimates and the impact of specific policies on employer coverage, premiums, and benefits. The panel also plans hearings on FDA policies and initiatives as it weighs proposals to revise the user fee program.

Rep. Darrell Issa (R-Calif.) is in line to chair the House Oversight and Government Reform Committee, where he will be able to issue subpoenas to access desired government documents. At hearings this fall on FDA's handling of Johnson & Johnson's recall of adulterated over-the-counter medicines, Issa criticized FDA for taking too long to shut down the noncompliant J&J plant and for withholding information sought by committee investigators.

Although Democrats retained control of the Senate, there will be notable changes in health-related committees. Sen. Orrin Hatch (R-Utah) is expected to play a more prominent role in shaping health reform changes as the ranking Republican on the Senate Finance committee; Hatch replaces Sen. Charles Grassley (R-Iowa), a longtime critic of pharma and of FDA. The Senate Health, Education, Labor, and Pensions (HELP) committee lost two longterm members due to retirement: Democrat Chris Dodd of Connecticut and Republican Judd Gregg of New Hampshire. HELP Committee chairman Tom Harkin (D-Iowa) and ranking Republican Mike Enzi of Wyoming will continue to be lead players in assessing FDA policies and government health programs.

Jill Wechsler is Pharmaceutical Executive's Washington correspondent. She can be reached at


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