By John Kamp
Executive Director, Coalition for Healthcare Communication
Aug. 6, 2012 — When Congress recessed last Thursday we marked nearly the end of this session and began the final stretch of the Congressional and Presidential elections that will affect the next four years of governing. From this point forward we have the all-important nominating conventions, only eight more legislative days in September, the elections, and a very important lame-duck session. 2013 will bring us new faces in Congress and perhaps the White House. Here are some of the highlights of what transpired at the end of the session, as well as a look at what might happen next.
PDUFA V: The Five-year FDA Funding & Fees Bill Passes
Congress succeeded in funding the FDA for the next five years with comparatively little drama, fireworks and even political posturing. Sometimes the government works. Most importantly, the legislation did not include any amendments to ban or further restrict marketing and did include one mildly optimistic provision prompting the FDA to complete its social media policies within the next two years. (Presumably, nearly five years from the 2010 hearings will be enough time to complete findings, deliberations and orders. But, you will get no guarantees here.)
Otherwise, the Prescription Drug User Fee Act V (PDUFA V) sets new approval guideposts for pharma applications, extends fee programs to generics and medical devices, and reasonably funds the FDA for the next five years (unless the across-the-board cuts from last year’s failed budget agreement go into effect as scheduled on Jan. 2, 2013). (See note on the Lame Duck session below.)
Health Reform After Supreme Court Decision
The U.S. Supreme Court left most provisions of the Affordable Care Act (ACA) in place. Of particular importance to us, the following provisions remain intact: the Sunshine Act, the FDA mandate to report to Congress on the advisability of creating a “drug facts box,” and the essentials of the PhRMA deal that promised $80-100 billion dollars from pharma in return for closing the Part D “donut hole” and adding up to 38 million newly insured patients to the medicine customer pool.
Although politicians and policy wonks are speculating wildly on how many states may “take advantage” of the freedom to turn back federal money to insure many of those new patients, it seems at least plausible that few states will refuse federal dollars. Understand that under the ACA, federal tax dollars contribute 100 percent of the costs for
the newly insured for the first three years, and then contribute 90 percent of costs in the subsequent years. Meanwhile, expect that 2013 – no matter who wins the elections – will be marked by more tweaks to healthcare reform, presenting more opportunities to upset the PhRMA deal, and to invoke more criticism of pharma prices and our marketing programs.
Lame Ducks, the Fiscal Cliff and Tax Expenditures
While incumbent candidates seem happy to keep the political choices of the post-elections “lame duck” session in the background, Wall Street, Washington wonks, economists and many
others are anxiously awaiting the hard money decisions that must be made to avoid the fiscal cliff created by the Super Committee budget ceiling bust earlier this year. In short, that debt ceiling bill – unless revised – sets in place a series of budget cuts and tax increases economists promise would put the United States firmly back into a recession.
Everyone “Inside the Beltway” seems to understand the stakes, but few are willing to predict how the Congress will respond. Last Thursday, former House Member Vic Fazio (D-Calif.), a longtime friend of the advertising industry, made this observation: “Everyone’s ox will be gored or the compromise will not be good for anyone.” Fazio said he hopes that Congress and the President-elect will rally around the proposals of last year’s Simpson-Bowles Committee (http://www.fiscalcommission.gov/).
These proposals include tax increases and budget cuts virtually no candidate wants to talk about on the campaign trail – tax increases for nearly everyone and spending cuts in defense and virtually every popular program from Social Security to Medicare. Meanwhile, The Advertising Coalition, including the AAAA and the CHC, assumes that every tax expenditure – including the deduction for marketing costs – could be considered in that session and is fully prepared for battle.
Despite some recent luck predicting the outcome of the Supreme Court decision on the ACA, the November elections are just too close to call. Moderates in the battleground states of Florida, Ohio and Virginia, and even in Iowa, Minnesota, Missouri, Pennsylvania, Wisconsin and other often-settled states, will decide the election. Recent polls in many of those states give Obama the edge with moderate voters right now by 4 to 8 percentage points, but similar polls of committed voters (those virtually certain to vote) give Romney a four-point edge.
Regardless, both candidates and their Congressional counterparts have much riding on the political conventions – when many uncommitted voters pay attention and often decide – and both desperately watch the economies of the United States and the European Union, employment numbers, gas prices and every other indicator of consumer/voter sentiment as the election nears. Many say the election will again come down to who is most likable and that Romney, especially, is in need of a Madison Ave. makeover.
So, I will leave it to you and the undecided voters to tell me who will win the Presidential election. Meanwhile, the Congressional prognosticators say that the Republicans likely will retain the House, perhaps losing a few seats, and that the Senate, too, is way too close to call. Many suggest that in the Senate the final seat number will be somewhere between the 52-48 goalposts, and that even a 50-50 split is possible, giving the Vice President a very important deciding vote.
In summary, while the stakes are high for us and the entire country, the political and health policy events will move very quickly over the next several months. Contributing members of the CHC will get a much closer view of these evolving events by participating in the DC meeting on Sept. 18 and 19. Dinner on the 18th will be highlighted by a nonpartisan late look at the elections from a leader from Cook Report. The next morning will start with two diverse views on the government’s role in the future of U.S. healthcare, followed by an interactive session among CHC leaders regarding what our industry must do to survive and thrive amid the imminent changes while doing its part to improve the care of patients and the public health.