A Tale of Two Congresses—Health Care Policy in the 117th vs 118th

The 118th Congress is wrapping up with a whimper rather than a bang when it comes to health care legislation, particularly compared to its predecessor's transformative impact on pharmaceutical policy. As we reflect on these past 4 years, the contrast between legislative accomplishments couldn't be starker, especially for pharmaceutical manufacturers navigating an increasingly complex regulatory landscape.

The 117th's Landmark Achievement

The 117th Congress fundamentally altered the pharmaceutical landscape through the Inflation Reduction Act (IRA), marking a historic shift in federal authority over drug pricing. After decades of pharmaceutical industry opposition and failed legislative attempts, Democrats successfully leveraged their slim majority to implement what many consider the most significant drug pricing reform since Medicare Part D's creation.

The IRA's drug pricing provisions represented a seismic shift in how the federal government approaches pharmaceutical costs. For the first time, Medicare gained the authority to negotiate prices directly with manufacturers, ending the long-standing non-interference clause that had prevented such discussions.

The legislation established a complex framework for selecting and negotiating prices for high-expenditure drugs, while also implementing inflation rebates to prevent excessive price increases. Perhaps most significantly for beneficiaries, the law capped out-of-pocket costs at $2000 annually and limited insulin cost sharing, providing immediate relief for millions of Medicare recipients.

The 118th's Implementation Reality

In contrast, the 118th Congress has found itself in the challenging position of oversight rather than innovation (but to be fair, the 117th is a tough act to follow). Rather than crafting new health care policies, legislators have grappled with the complex realities of implementing the IRA's ambitious provisions. The divided Congress has witnessed the unfolding of 9 separate legal challenges to Medicare's negotiation authority, each raising distinct constitutional concerns about government overreach and fair compensation.

The implementation phase has revealed numerous complexities that the original legislation couldn't have fully anticipated. CMS completed its first round of negotiations in August 2024, resulting in projected savings of $6 billion—representing a 22% reduction from current prices. However, this process has raised significant questions about methodology, transparency, and long-term impact on innovation.

A New Era of Health Agency Leadership

As we transition into 2025, the incoming administration's health care leadership appointments signal a potentially dramatic shift in how federal health agencies operate. Dr Mehmet Oz's nomination to lead CMS comes at a crucial moment in Medicare drug price negotiation implementation. As I mentioned in my blog last week, Dr Oz’s vision for Medicare drug pricing suggests a more decisive shift toward privatization. And, while the CMS Administrator has significant discretion over program implementation, they must still operation within congressional intent (and who knows how that intent will shift with the incoming 119th Congress).

Even more significantly, the administration has outlined an ambitious agenda for regulatory reform through RFK Jr's emerging role in health policy. His mandate includes 3 key directives that could fundamentally reshape how health agencies interpret and implement their authority: returning to "empirically-based, evidence-based science and medicine," addressing perceived conflicts of interest within agencies, and demonstrating measurable impacts on chronic disease within two years.

This new leadership approach, combined with the recent overturning of the Chevron doctrine, suggests a potential shift toward stricter textualist interpretation of agency authority. For pharmaceutical manufacturers, this could mean significant changes in how drug pricing provisions are implemented and enforced.

Looking Ahead: The Policy Inheritance

The pharmaceutical industry now faces a complex regulatory landscape shaped by the 117th Congress's ambitious reforms and the 118th Congress's oversight challenges. As we enter 2025, manufacturers must navigate not only the existing framework of Medicare drug price negotiations but also prepare for potential shifts in how health agencies interpret and implement their authority under new leadership.

The contrast between these two Congresses offers valuable lessons about the nature of health care policy reform. While the 117th Congress demonstrated how transformative legislation can reshape an industry, the 118th Congress has shown that implementation often reveals complexities that even the most carefully crafted legislation cannot fully anticipate.

As we look toward 2025, these lessons will be crucial for understanding how ambitious policy goals translate into practical reality under new agency leadership.

Join me next year as we continue to analyze what's behind the bill in health care policy, where we'll likely see the full impact of these congressional sessions and new agency leadership unfolds.

Reference

Freking K. Lawmakers prepare for final lame-duck sprint before making way for next Congress. AP News. December 16, 2024. Accessed December 17, 2024. https://apnews.com/article/congress-spending-judges-lame-duck-3084d5c362474ee9ddd9bf9e1cd7b812