Senate HELP’s PAHPA draft: The good, the bad, and the ugly

House Committee on Energy and Commerce

The Senate Health, Education, Labor, and Pensions (HELP) Committee released a bipartisan discussion draft of the Pandemic and All-Hazards Preparedness Act (PAHPA) reauthorization bill on July 3, giving the public a tight window for comment. That window closed on July 10.

PAHPA, which is intended to “improve the Nation’s public health and medical preparedness and response capabilities for emergencies,” is “must pass” legislation and will expire Sept. 30 if it is not reauthorized.

The Biotechnology Innovation Organization’s (BIO) is in favor of many aspects of the draft and recommends extending the scope in some areas. Notably, in their public comments, BIO touched on two major points of the draft legislation: incentives for investment in medical countermeasures (MCMs) and the inclusion of a “reasonable pricing” clause.

The good

Incentives for investment in MCMs

Sections 203 and 204 of the draft both touch on incentivization for MCMs, including conducting research to promote strategic initiatives.

Among others, the draft covers MCMs for viral families that have significant potential to cause a pandemic, including pathogen-specific or broad-spectrum approaches. It also focuses on the development of technologies to improve the production and use of MCMs like vaccine-manufacturing, dose sparing, efficacy-increasing, and platform technologies, as well as technologies to administer countermeasures and improve storage and transportation of MCMs.

“BIO greatly appreciates the interest in incentives for investment in MCMs and strongly supports those policies in the draft,” said Phyllis Arthur, Senior Vice President for Infectious Disease and Emerging Science Policy at BIO.

“Efforts to spur innovation, the development of new and faster response capabilities, and to prepare for all types of national hazards has always been the purpose of PAHPA, and BIO is committed to supporting provisions that achieve those vital goals.”

“Now is not the time to weaken meaningful incentives—such as the MCM priority review voucher (PRV) program—that draw investment for R&D to treat unknown threats,” said Arthur.

The bad

Inclusion of a “reasonable pricing” clause

However, that incentivization is threatened to be undermined by the inclusion of a “reasonable pricing” clause introduced by Sen. Bernie Sanders which BIO strongly opposes.

“The inclusion of a reasonable pricing clause in the PAHPA reauthorization will effectively shut down private sector investment and the type of public-private partnerships that are vital to the development of life-saving medical countermeasures,” said Arthur. “This is especially true for many MCMs that have a limited or no commercial market and rely on these partnerships. It will make us less safe as we work to ensure that our nation’s intelligence, defense, and healthcare agencies have the tools they need to defend all Americans from chemical, biological, radiological, and nuclear threats, including threats from our adversaries, and to be better prepared for future pandemics.”

As Arthur highlights in her letter to the Senate HELP Committee, the experiment of a “reasonable pricing” clause has already proven its own ineffectiveness saying, “Reasonable pricing clauses have been tried in the past at NIH and failed, slowing private investment and engagement across the agency. Once they were revoked, critical partnerships resumed and increased.”

“It was a failed experiment terminated by the Clinton Administration in 1995 because it halted the public-private partnerships that developed NIH-funded science into important cures,” writes Arthur.

She goes on to explain, “Then-NIH Director Harold Varmus said, ‘An extensive review of this matter over the past year indicated that the pricing clause has driven industry away from potentially beneficial scientific collaborations with PHS scientists without providing an offsetting benefit to the public. One must have a product to price before one can worry about how to price it, and this clause is a restraint on the new product development that the public identified as an important return on their research investment.’

The ugly

Risk of losing the lessons learned

The ugly truth is that, while the most recent pandemic taught the world a great deal about what is needed for effective pandemic preparedness, those lessons will be lost if legislation like PAHPA is not well-written and passed—soon.

“This is an important moment for our nation as we emerge from a, hopefully, once-in-a-generation pandemic, allowing us to take stock of lessons learned. The important question to ask is, are we more prepared today than we were in 2019? Unfortunately, it is not evident that we are,” said Arthur in prepared testimony on June 13, to the House Energy & Commerce Health Subcommittee on the subject of pandemic preparedness.

And, as Arthur continued to explain, “The American public deserves and expects as much from their elected representatives, according to new polling.”

Indeed, the American public has been transparent in its desire for effective bipartisan legislation that will address the next pandemic before it arrives. In a poll conducted by Healthcare Ready and BIO, in conjunction with Wakefield Research, it was found that:

  • 95% of respondents believe that “The federal government should prepare for a wide variety of potential public health emergencies.”
  • 92% of respondents agree that “The lessons learned from the last pandemic should be incorporated into our national preparedness efforts for the next public health emergency.”
  • 90% of respondents agree that “The federal government should expand long-term preventive measures to help avoid any future pandemics.”

In their letter, BIO also recommends the incorporation of three additional bills to strengthen PAHPA. These include: the PASTEUR Act of 2023, to address the growing crisis of antimicrobial resistance; PHEMCE (Public Health Emergency Medical Countermeasures Enterprise) Advisory Committee Act of 2023, which establishes an advisory committee to seek input from external stakeholders on issues central to the mission of the PHECME; and the FLASH Act of 2023, which strengthens ASPR’s (Administration for Strategic Preparedness and Response) ability to invest in innovative technologies and enhances its ability to pursue partnerships with industry.

Looking forward, on the heels of the discussion draft of the PAHPA reauthorization in the Senate, the House Energy & Commerce Health Subcommittee is expected to hold a mark-up on a number of health care related bills, including PAHPA, this Thursday, July 13.

“As public health threats and hazards evolve, so must our efforts to prepare and respond—whether they be chemical, biological, radiological, nuclear, a cyberattack, or another emerging infectious disease,” said Chairs Cathy McMorris Rodgers (R-WA) and Brett Guthrie (R-KY). “We must take lessons learned from past experiences as well as advice from experts in emerging fields to secure the safety and well-being of the American people. We look forward to discussing solutions to prepare for the next generation of threats and hazards that we may face.”

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