By Linda Rouse O’Neill
Midterm elections put supply chain champions in key positions
November’s midterm election brought substantial changes – some unexpected – to Congressional leadership. Voters reversed course from the past eight years, handing Republicans control of both the Senate and House for the first time since 2007.
With Republican control over the Senate and an expanded majority in the House, key committees will likely experience leadership shifts that could carry major supply chain implications.
Medical device tax
Leadership of the Senate Finance Committee is expected to be handed from Sen. Ron Wyden (D-OR) to ranking member Sen. Orrin Hatch (R-UT). Senator Hatch has long championed for the repeal of the 2.3 percent medical device excise tax.
Repealing the tax has also been a top priority among medical device suppliers; past repeal legislation has received bipartisan support, but with little progress. Any future legislation repealing the tax – including a solution for finding roughly $30 billion in revenues to offset the tax – must go through the Senate Finance Committee before approval.
In the House, the Ways & Means Committee would work on similar legislation with the Budget Committee. With his reelection to a ninth term in Congress, Rep. Paul Ryan (R-WI) is seen as a heavy favorite to take control of the Ways & Means Committee Chairmanship. Rep. Ryan has been another vocal supporter of repealing the device tax and a Chairmanship would solidify his direct involvement in finding a permanent repeal solution.
Competitive bidding
Medicare’s Competitive Bidding Program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS) is another contentious area that could be addressed in the coming months. Program delays, studies and/or audits on its effectiveness, or even alternate treatment of enteral supplies could all be on the table for potential discussion or action.
If Rep. Ryan moves to the Ways & Means Committee, as expected, Rep. Tom Price (R-GA) would likely assume Chairmanship of the Budget Committee. Rep. Price is a physician by trade and has been a leading supporter for modifying competitive bidding. Chairing the Budget Committee would put him in a unique position to make meaningful progress on program reforms.
Pharmaceutical traceability
Finally, wholesale distributors across the country are preparing for the implementation of new federal requirements intended to ensure prescription drug supply chain integrity by providing a mechanism for products in the supply chain. Phase I of the Drug Quality and Security Act (DQSA) begins Jan. 1, 2015, and requires pharmaceutical manufacturers, wholesalers, and repackagers to comply with applicable traceability requirements. Dispensers must comply by July 1, 2015.
Sen. Lamar Alexander (R-TN) will likely become the new Chairman of the Health, Education, Labor, and Pensions (HELP) Committee as current ranking Republican. Sen. Alexander was a key HIDA ally during the DQSA’s enactment. We expect him to remain closely involved throughout implementation. He is also likely to focus on improving the efficiency of the FDA as well as look for opportunities to reduce regulatory burdens on the industry.
HIDA will continue to closely monitor developments resulting from the November elections. For additional information, please contact us at HIDAGovAffairs@HIDA.org.