Would Repeal Affect Cures Research Funding Offsets From Obamacare?

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By Jeannie Baumann

Billions of research dollars authorized for biomedical innovation under the 21st Century Cures law likely will come through even though the payments are to be offset with funds from the Affordable Care Act—the ‘Obamacare’ law targeted by Republicans for repeal.

Broad congressional and White House support for medical research continues but an overall move to cut federal spending also could have indirect repercussions for the National Institutes of Health and the nation’s medical research portfolio as a whole.

“Science funding decisions don’t happen in a vacuum,” Matt Hourihan, director of the research and development budget and policy program for the American Association for the Advancement of Science, told Bloomberg BNA Feb. 13.

Cures Gives NIH $4.8 Billion

The 21st Century Cures law ( Pub. L. 114-255) to spur new medical treatments authorized $4.8 billion for the NIH and $500 million for the Food and Drug Administration through a 10-year “Innovation Fund” to boost funding for precision medicine, the cancer moonshot, and brain research. While the bill ended up clearing Congress with strong bipartisan support, one of the key hurdles lawmakers had to overcome was negotiating an agreement on how to pay for the bill. Rep. Fred Upton (R-Mich.), who championed Cures with Rep. Diana DeGette (D-Colo.), underscored a number of times that the Cures law is fully offset.

The offsets in the Cures law include $3.5 billion from the Prevention and Public Health Fund (section 5009), which the ACA established as a mandatory funding stream for the Centers for Disease Control and Prevention. The law also revokes $464 million available to U.S. territories in the ACA.

While the initial House-passed version of the bill in 2015 made the Cures Innovation Fund mandatory, the final law enacted last December requires the innovation fund to go through the annual congressional appropriations process.

Upton, DeGette Remain Confident

“We remain confident that the groundbreaking 21st Century Cures law will be fully implemented,” DeGette and Upton said in a Feb. 13 joint statement to Bloomberg BNA. “The bill passed both the House and Senate with overwhelming bipartisan support. We look forward to working with the administration and agencies to ensure our work on behalf of patients and their families continues.”

Bloomberg Intelligence senior analyst Brian Rye said he expects Congress to take care of the Cures provisions through the normal budgeting process. “I don’t think there’s any interest in scuttling that or somehow handicapping that,” Rye said Feb. 13, referring to the Cures law. “But it does underscore how interrelated all these things are.”

Tannaz Rasouli, senior director of public policy and strategic outreach at the Association of American Medical Colleges, noted the ACA’s public health fund takes up about 12 percent of the CDC’s budget. “If appropriators lose that, it’s going to leave a pretty big gap in the CDC that they’re either going to have to leave or that they’re going to have to fill in other ways,” she told Bloomberg BNA on Feb. 13. “That’s obviously going to have an impact on all the other programs that are funded through the Labor-HHS bill, including NIH, so I think there are implications for NIH funding broadly as a result of the increased pressure on the labor-health allocation.”

Discretionary Spending Cuts

The NIH’s $32 billion annual budget is part of the discretionary spending pool, which encompasses about one-third of the total federal budget. Hourihan of AAAS said one of the challenges is “we don’t know exactly what kind of approach they’re going to take in terms of defense versus non-defense discretionary spending.”

“We should expect them to cut the non-defense discretionary budget. Now if there’s less non-defense discretionary spending, then that may or may not have a ripple effect on NIH,” he said. “Typically the budgets for science agencies tend to move in accord with the non-defense discretionary budget so when that comes down, agency spending goes down. When that goes up, science agency spending tends to go up. So that’s a big question that could impact NIH spending.”

Lizbet Boroughs, president of the umbrella group United for Medical Research and associate vice president for federal relations for the Association of American Universities, said Feb. 13 she is hopeful NIH funding will be protected under the new budget because there’s so much support in both parties and the administration. Referring to the newly installed Health and Human Services Secretary Tom Price, she told Bloomberg BNA, “Dr. Price certainly understands the importance of ensuring that the U.S. is a global leader in medical research as well as developing breakthrough treatments for patients.” Price was sworn in to his HHS post Feb. 10.

During his Jan. 18 confirmation hearing, Price responded to a question from Sen. Susan Collins (R-Maine) that “NIH is a treasure for our country, and the kinds of things that we should be doing to find cures for diseases. One of the core avenues to be able to make that happen is through NIH, and I supported the increase.”

Hourihan said Price, who was chairman of the House Budget Committee, is similar to Republicans both inside and outside the Trump administration in that “he’s supportive of research funding. But is also very concerned about other parts of the budget, specifically entitlement programs, Medicare and Medicaid.”

“These are the programs that have overwhelmingly driven growth and federal expenditures,” he said. “President Trump campaigned on leaving those programs alone. On the other hand, Tom Price certainly has been in favor of entitlement reform in the past.” Mick Mulvaney, the new head of the Office of Management and Budget, also has supported entitlement reforms, he said.

“These are individuals who are going to have some say in the future budget, but that’s kind of a big unknown,” Hourihan said.

Edmund F. Haislmaier, senior research fellow at the Heritage Foundation, a conservative think tank, told Bloomberg BNA, “medical research funding is always a kind of warm fuzzy on Capitol Hill.”

But if the White House is looking to trim the budget, Haislmaier said, cutting grant funding could be a target area. More than 80 percent of the NIH’s budget funds researchers at universities and other institutions.

“An agency head is probably in a weaker position to argue for keeping grant funding than operational funding,” Haislmaier said Feb. 10. An agency that replies, “If you cut this, then we won’t have enough to do X, Y and Z that the law tells us to do,” has a stronger case, he said.

$34 Billion NIH Budget

A coalition of 260 research groups asked President Donald Trump and congressional leaders in both parties to provide the NIH with $34.1 billion in fiscal year 2017, which is the amount the Senate Appropriations Committee approved last June and represents a $2 billion increase over FY 2016 spending levels.

“As you know, a robust, reliable investment in scientific discovery is crucial to improve patients’ health, strengthen the economy in the near- and long-term, and maintain the U.S.’s global preeminence in medical innovation,” the Ad Hoc Group for Medical Research wrote in a Feb. 7 letter. “Through NIH, the federal government plays an irreplaceable role in supporting biomedical research that is inherently inefficient for industry to conduct but is essential to inform our fundamental understanding of medicine.”

To contact the reporter on this story: Jeannie Baumann in Washington at jbaumann@bna.com

To contact the editor responsible for this story: Randy Kubetin at RKubetin@bna.com

For More Information

The Ad Hoc Group for Medical Research letter is available at http://src.bna.com/mjC.

More information on the Prevention and Public Health Fund is avaialble at https://www.cdc.gov/funding/pphf.

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