Capitol Insights Newsletter

Authors: Luke Schwartz, Matt Reiter, and Caroline Oliver

What happened in Congress this week?

With all the attention on the Senate’s foreign aid and border security package and the House’s effort to impeach Homeland Security Secretary Alejandro Mayorkas, it was otherwise a rather quiet week in Congress for healthcare policy.

However, on Thursday CEOs of Johnson & Johnson, Merck, and Bristol Myers Squibb testified before the Senate’s Committee on Health, Education, Labor & Pensions (HELP) as lawmakers questioned why the United States boasts the highest prices prescription prices in the world. Senator Bernie Sanders got the CEOs to admit that the same drugs are priced lower in other countries and are still profitable. CEOs were quick to shift the responsibility to Pharmacy Benefit Managers (PBMs) for the high prices. While the Inflation Reduction Act’s Medicare Drug Price Negotiation Program will lower what patients pay for some drugs, Capitol Associates is keeping a close eye on Congress and state legislatures to see if there will be further action to reduce prescription drug prices in 2024.

Weight Loss Drug’s Surging Popularity: How Will Congress Respond?

Last week, this featured section focused on the recent and rapid innovation of Alzheimer’s drugs and the attention they are receiving from lawmakers. Continuing this series, this week’s edition will focus on weight loss drugs, perhaps the hottest class of drugs on market right now.

Eli Lilly has recently surged to become the eighth biggest company in the S&P 500 with a market valuation of nearly $700 billion, roughly $100 billion ahead of Tesla, the next biggest company by market cap. Eli Lilly’s stock has grown over 100% in the last year largely due to its weight loss drug Zepbound. Zepbound, along with its Diabetes-focused equivalent Mounjaro, are a class of medication called glucagon-like peptide 1 receptor agonists, or commonly known as GLP-1. GLP-1 drugs have seen a rapid growth in popularity as an appetite regulating drug that is helping patients lose weight. Many are even hypothesizing that Eli Lilly’s GLP-1 drugs will become a top selling drug of all time. Eli Lilly is building a new drug manufacturing facility in North Carolina to keep pace with the rising demand.

Across the Atlantic, Eli Lilly’s biggest GLP-1 competitor is Denmark’s Novo Nordisk and their weight-loss drug Wegovy (and its diabetes equivalent, Ozempic). Due to the weight-loss drug craze, Novo Nordisk is now the most valuable European company (by over $100 billion at the time of writing this) and is more valuable than the entire GDP of Denmark. On Monday, Novo Nordisk acquired the large drug manufacturing company Catalent for $16.5 billion to keep pace with demand for its weight loss drug.

GLP-1 drugs are fueling the weight loss trend and will hopefully lead to a healthier population. However, weight loss drugs are not currently covered by Medicare Part D, the component of Medicare that covers beneficiaries’ prescription drugs.

Back in July of last year, Senators Tom Carper (D-Del.) and Bill Cassidy (R-La.) alongside Representatives Raul Ruiz (D-Ca.) and Brad Wenstrup (R-Oh.) introduced the “Treat and Reduce Obesity Act of 2023” in both congressional chambers which would cover weight loss drugs for Medicare beneficiaries. The bipartisan proposed legislation has been referred to various committees but has not received meaningful consideration. Many commercial plans are not currently covering GLP-1 drugs for weight loss either, meaning many Americans are paying out of pocket for these weight loss medications which restricts lower income Americans from gaining access to the life-changing drugs. Not extending coverage of weight loss drugs to all individuals who need them can ultimately exacerbate health disparities.

As GLP-1 weight-loss drugs continue to grow in popularity, CAI will be closely monitoring if coverage for these drugs expands across public and private insurance plans.

Top Stories in Healthcare Policy

Last Friday, February 2nd, an FDA panel convened to discuss the racial bias that exists in using pulse oximeters. Evidence demonstrates that pulse oximeters do not accurately detect oxygen levels for darker skin tones, leading to disparities for Black patients.

Last week, San Mateo County in California became the first county in the U.S. to declare loneliness as a public health emergency. The resolution from the county’s Board of Supervisors explains that the county will work to promote social connection for residents. Promoting social connection to address the epidemic of loneliness in the U.S. is one of the priority areas of Surgeon General Vivek Murthy.

Jobs in healthcare grew 3.9% in 2023, as the demand for care increased. Data from Altarum estimates that the healthcare sector added 654,000 jobs last year.

According to 46brooklyn Research, 910 prescription drugs saw price increases during January. The median price increase was 4.7%, which is lower than it has been in previous years.

According to KFF, about 9.5 million people have been disenrolled from Medicaid during the unwinding process.

This week, the CDC relaunched an anti-smoking campaign specifically targeting menthol cigarettes. The “Tips From Former Smokers” campaign relaunches as the Biden administration’s proposed ban on menthol cigarettes is delayed until March.

On Thursday, February 8th, the Senate Finance Committee held a hearing on Artificial Intelligence and Healthcare. At this hearing, Capitol Associates saw lawmakers discuss the role of bias in healthcare AI development, as well as what steps Congress and CMS can take to combat this bias. Additionally, the hearing explored how lawmakers can more effectively support healthcare organizations through research, education, and implementation of AI technology.

On Monday, February 5th, the 3rd Circuit Court of Appeals ruled that not wearing a mask during the COVID-19 pandemic did not qualify as protected free speech. The appellants intend to petition the Supreme Court.

The House passed a bill on Wednesday, February 7th, that would ban Medicaid and other federal health programs for using quality-adjusted life years. However, both Senate Democrats and the Biden administration oppose the bill, meaning it isn’t likely to progress any further.