Washington Update FMMC 2017 Symposium

Transcription

1 Washington Update FMMC 2017 Symposium May 8, 2017 Clayton Hall, VP for Government Affairs Medical Device Manufacturers Association

2 About MDMA Founded in 1992 by handful of smaller medical device executives seeking a voice in Washington Today MDMA represents nearly 300 member companies Leverage collective resources to provide top-tier advocacy and educational assistance to companies Track record of success, and enjoy a strong partnership with FMMC

3 Agenda 2016 Election / State of Play ACA Repeal & Replace Device Tax Repeal Tax Reform MDUFA / FDA Reforms Reimbursement Cost of Care/Value of Technology

4 The 2016 Election & State of Play

5 Another Dewey Defeats Truman Forecasts pegged Clinton s chances of victory at 70-90% Trump polling at 42% was lowest since Bob Dole in % undecided versus just 3% in 2012

6 Republicans Sweep Elections

7 Trump Approval at 100 Days Lags behind Obama (61%), Bush (56%), and Clinton (52%) Still, only 2 percent of Trump Voters regret over vote

8 Fewer & Fewer Swing Seats

9 ACA Repeal & Replace

10 ACA Report Card Approx 22 million Americans now receive health insurance through the Affordable Care Act (ACA) 15 million gained coverage through expansion of Medicaid & CHIP 8.8 million enrolled via healthcare.gov as of Jan 14th Uninsured rate dropped to 10.9% of U.S. adults vs. a high of 16% in Exchange markets becoming increasingly unstable. 1/3 of U.S. Counties only offer one plan under the marketplace 20% average premium increases Carriers are fleeing Aetna only in two states Public support, hovering around 50%, at all time highs

11 Timeline for Repeal / Replace Jan Senate, House approved budget resolution laying groundwork for ACA repeal Jan. 27 House and Senate Committees missed non-binding deadline to report out ACA repeal legislation March 24 House pulls bill???june??? Senate to consider when they have 51 votes Jan. 20 President Trump inaugurated Feb. 24 Leaked House bill emerges March 8 & 9 House E&C and W&M Committees to mark up ACA repeal & replace bill May 4 House passes AHCA by vote of

12 What s Likely Repealed? Enhanced federal match for Medicaid expansion, beginning in 2020 Exchange Subsidies, beginning in 2020 Individual mandate, effective Dec. 31, 2015 Employer mandate, effective Dec. 31, 2015 Public Health & Prevention Fund Almost all tax increases

13 What Likely Stays the Same(ish)? Pre-existing conditions (with select changes) Community rating by age (with select changes) Under-26 mandate Prohibition on annual and lifetime limits Medical loss ratio requirements Insurance Exchanges

14 New Tax Credits in 2020 Age-based Range of $2,000 (ages 30 and under) to $4,000 (ages 60 and above) per individual Fixed amounts do not vary with actual cost of insurance or geography Advanceable & Refundable Like ACA, tax credits paid monthly throughout the year Refundable so even those not owing income tax may qualify Partially Means-Tested Phased out after $75,000 income level (individual; $150,000 for joint filers) Additive for a family & capped at $14,000

15 Incentive to Purchase Coverage Individual mandate would be repealed Pre-existing conditions would be covered, likely with caveats Premium penalties of up to 30 percent for one year unless continuous coverage is maintained More than 63-day gap is not continuous coverage Dependents aging off parents plan must enroll at first open enrollment

16 Device Tax Repeal

17 Medical Device Tax Repeal in Sight Two year suspension in 2016 & 2017 thanks to overwhelming bipartisan support. Unless Congress acts, the current two-year suspension expires at the end of Continue to remind policy makers of the benefits of the suspension, but 75% of MDMA members are holding off investing in R&D and expansion without the certainty of full repeal. Companies making budget decisions now assuming tax stays in place. Fully repealed in House passed AHCA package, but challenges remain in Senate. Can t Depend on a Large Package for Success, but Opportunities Exist in Other Must Pass Bills (CHIP / Medicare extenders deal, Tax Extenders, & EOY Omnibus).

18 Tax Reform

19 Tax Reform Primed In the past 30 years, the US tax code has become more complicated and globally anti-competitive leading to a rash of corporate tax inversions and erosion of the tax base. Legislation, being drafted now, will draw from the House Better Way framework to simplify the code and lower the rates for individuals and businesses. Top priority for the incoming Trump Administration and Congress but details are still being developed. Border Adjustment is controversial and has been criticized by Trump as overly complicated.

20 Tax Reform Paul Ryan s A Better Way Changes to Business Income Tax: Reduces the corporate rate from 35% to 20%. Pass-through Businesses taxed at 25%. Full and immediate deduction of all capital investment costs. Eliminates the deductibility of net interest expenses. Restricts the deduction of net operating losses to 90% of taxable income, but can carry forward indefinitely. Eliminates Section 199 (manufacturing deduction) and all other business credits except R&D. Transitions to a territorial system exempting from tax all profits of foreign subsidiaries. One time deemed repatriation of foreign profits held overseas in cash / cash equivalents at 8.75%. Implements a border adjustment so that imports are taxed at the new corporate rate while exports are sold tax free. Now reconciling with the vision White House outlined in April

21 MDUFA / FDA Reforms

22 Key Features of MDUFA IV Agreement Reduce 510(k) and PMA avg total time goals First time performance goals for presubs & De Novo Improvements to deficiency letters Quality Management Programs Continuation of Independent Assessment / Auditing Patient Engagement NEST Pilots on RWE to support pre-market efficiencies

23 MDUFA IV Timeline / FDA Update MDUFA IV needs to be reauthorized by 9/30/17. Hill action heating up with votes expected in the Senate HELP on May 10 th. Not uncommon for other FDA reforms to ride along with user fee reauthorization. Scott Gottlieb expected to be confirmed by the full Senate this week. Hiring freeze has thawed. CDRH contemplating progressive approval for certain PMA devices to develop more data and that meet the EU standard.

24 Reimbursement Reforms

25 Reimbursement Reform / Patient Access Ongoing concerns about the time gap between regulatory and reimbursement decisions Pursue administrative and legislative solutions Increasing concerns about the lack of clarity by private payers around coverage determinations Tufts study published in late 2016 Lack of consistency and patient input More transparency needed with CPT and RUC process Bundled payment programs need reforms to properly measure outcomes over proper time horizon Patient access/impact will be critical to success!

26 Value of MedTech + Cost of Care

27 Drug Pricing Catalyzing Public Interest in Cost of Care The President continues to highlight the issue, and noted his interest in his Joint Address to Congress in February. bring down the artificially high price of drugs and bring them down immediately. Comprehensive legislation unlikely, but pressure continues to build. 12 GOP Senators voted to allow drug imports from Canada in January. Educate Congress and Public about the value of medical technology or risk being drawn into this fight.

28 Value of MedTech Between 1980 and 2000 life expectancies increased by 3.2 years (4%), and death rates dropped by 16%. During the same time frame, the number of days spent in the hospital dropped by 56%, and the number of people over age 65 with disabilities dropped by 25%. Medical Devices & U.S. Health Spending In 2011 medical device spending totaled $159.4 billion or 5.9 percent of total national health expenditures ($2.7 trillion) (King, 2014).

29 Value of MedTech From 2007 to 2011, seven major categories of implantable medical devices, seven substantial price declines: implantable defibrillators (24%), pacemakers (26%), artificial hips (23%), drug-eluting stents (34%), and more. Reduced complications and recovery times translate into lower health care costs.

30 Conclusion Can the White House deliver on their ambitious agenda with GOP divisions in the House, a narrow majority in the Senate, and over unified Democratic opposition? Bipartisan support for device tax repeal is highest its ever been, and prospects for relief are good but not guaranteed. Huge opportunities at the FDA but serious challenges in reimbursement environment. We have a great story to tell and policy makers want to hear about how our technologies are improving the lives of patients!

31 Questions? Clayton Hall VP, Government Affairs Medical Device Manufacturers Association (202) (cell) (202) (desk)