FY17 Appropriations

The Office of Management and Budget has proposed a $17.9 billion spending cut to offset higher proposed defense and border security spending in FY17.  The proposed reductions are spread across nine Appropriations subcommittees that allocate non-defense discretionary (NDD) spending.  The Labor-HHS-Education Subcommittee would take the biggest hit at $7.2 billion.  Specifically within the Labor-HHS Subcommittee, the proposed cuts include large cuts to National Institutes of Health funding and cuts to HIV prevention funding.

President Trump had asked for $30 billion increased defense spending and $3 billion for border security in FY17, which ends September 30.  To offset those increases, he asked Congress to cut $18 billion in NDD spending but without offering details.  These proposed cuts represent the first fleshing out of how those cuts could be made.  The government is currently operating under a continuing resolution that runs out April 28.  There has been significant pushback from both Republicans and Democrats to these proposals as Congress is currently working to wrap up FY17  appropriations bills before the CR expires.

ACA Replacement Legislation

On March 6, 2017, the Republican House leadership unveiled their ACA replacement and Medicaid funding structure modification legislation proposal– the American Health Care Act. On both Thursday and Friday of last week, the Republicans hoped to have votes on the proposed legislation but did not have enough supporters so no vote was held.

340B Update

On March 20, 2017, the Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA) issued an interim final rule delaying the implementation of the 340B Drug Pricing Program Ceiling Price and Manufacturer Civil Monetary Penalties Final Rule until at least May 22, 2017. This final rule, which had previously been delayed until March 21, 2017, addresses the calculation of the 340B ceiling price and establishes civil monetary penalties for manufacturer violations of the 340B Program.

This series of delays follows President Trump’s January 20, 2017 memorandum that halted all pending federal regulations until the regulations were reviewed by the current Administration as well as the January 20, 2017 executive order to minimize the burden of the Affordable Care Act pending repeal.  Because the final rule was generally favorable to 340B covered entities, this may indicate that OPA is reconsidering manufacturers’ comments on the proposed rule.  The interim final rule seeks comment on whether the final rule should be further delayed until October 1, 2017. Comments are due on April 19, 2017.