Skip to Main Content

You’re reading the web edition of D.C. Diagnosis, STAT’s twice-weekly newsletter about the politics and policy of health and medicine. Sign up here to receive it in your inbox.

Knocking out two Byrds with one stone

It’s just days before the Senate is supposed to leave town for summer break, and they’re still engaged in a last-minute scramble to streamline their ambitious plan to lower drug prices. My colleague Rachel Cohrs has the details on what’s already changed — and what’s still changing.


The biggest outstanding issue is insulin. Democrats have pivoted from their plans to pursue insulin pricing policy in a purely bipartisan way, and are instead engaged in a last-second effort to jam as much policy in their reconciliation bill as they can.

There are three main provisions in play here. First, there’s a $35 monthly copay cap for Medicare patients. Second, there’s a $35 copay cap for patients with insurance through their job. And third, there’s a provision that would lower the prices of insulin. .

The first, the copay cap in Medicare, appears to be moving forward, at least per draft legislative text obtained by STAT. Democrats have also submitted language for a copay cap for patients in the commercial market to the Senate’s rules referee for her consideration, a Senate aide confirmed, though it’s long been expected to run afoul of the rules for the fast-track reconciliation process. The fate of a mechanism to lower prices remains unclear.


There were also two tweaks Democrats made to their overall bill that were unrelated to insulin, according to a separate draft obtained by STAT. One would delay a Trump-era regulation banning rebates instead of repealing it. The other would let drug makers that refuse to sell drugs to Medicare at negotiated prices sidestep a big tax penalty — but they’d have to pull all of their drugs out of the program.

New 👀 details about a very 👀 hiring

My colleague — and your former D.C. Diagnosis author — Nick Florko is back with this dispatch about last week’s announcement that Matt Holman, a 20-year veteran of the FDA who played a central role in nearly every major tobacco regulatory decision, took a job at Philip Morris International.

(Hi again! Miss met yet?) Holman’s move prompted scorn and even shock from the tobacco world, but I’m not here to discuss that. Instead, I want to unpack what we know about the timeline for Holman’s departure. A staff note indicated that Holman recused himself from his role once he disclosed he was looking for outside employment, but the FDA declined to tell STAT when Holman actually started recusing himself.

But Holman only recused himself from FDA work for roughly a month, because he served as the formal signatory on the FDA’s June 23 decision to order Juul off the market, the company confirmed to STAT.

Holman’s involvement in the Juul application doesn’t violate ethics rules, so long as he was not hammering out his employment with Phillip Morris when he signed Juul’s denial. That’s because current rules only require officials to recuse themselves from matters having a “direct and predictable effect on the financial interests” of a prospective employer once they start formally “negotiating” with that employer, according to Walter Shaub, who served as the Obama administration’s top ethics officials and now is a senior fellow at the Project on Government Oversight.

But the timing is still likely to raise some eyebrows, especially since Philip Morris International — Holman’s new employer — is technically a competitor to Juul and its biggest investor, Altria. (The companies have a very complicated relationship; Altria used to be part of Phillip Morris and they have an agreement to co-market another type of e-cigarette known as IQOS.) But Wall Street analysts see the Juul denial as good news for Phillip Morris, especially because Phillip Morris is currently in the process of buying Swedish Match, one of the leading manufacturers of oral smokeless tobacco products like snus, which hypothetically could compete with Juul. The two companies also do currently compete in markets like the UK, where Juul is marketed by Altria and Philip Morris International sells several smoke-free tobacco products.

Holman told STAT in a message that he “began discussions about a potential job with PMI on July 1” and that “the approach that I took aligns with all ethic[s] regulations for FDA staff exploring career opportunities at FDA-regulated organizations.”

Excited about ARPA-H coming to your city? Maybe you shouldn’t be

The creation of ARPA-H, the Biden administration’s new high-stakes biomedical research agency, has kicked off a lobbying frenzy among local governments. Specifically, they want the federal government to place its headquarters in their city, be it Philadelphia, Cleveland, St. Louis, or North Carolina’s research triangle — to name just a few of the regions actively making the case.

But the ARPA-H headquarters might not be the economic engine it’s chalked up to be, STAT’s Lev Facher reports. Because of the new science office’s structure, it’s likely that the headquarters will constitute little more than a collection of desks. The real action will take place at the companies that win prestigious government contracts — not at the agency’s home base.

The race has not gone unnoticed in Washington. Francis Collins, the longtime NIH director and current White House science adviser, isn’t amused. “This is a crazy and unnecessary bidding war,” he told STAT. Read more here.

AIDS activists are going after Biden on his monkeypox response

(Courtesy Jessica Bassett) Courtesy Jessica Bassett

HIV/AIDS activists have been drawing parallels between the U.S. response to AIDS in the 1980s and today’s effort to contain monkeypox — which they see as disjointed, underfunded, and inadequate. Yesterday, a group of attendees protested the Biden administration’s handling of the monkeypox outbreak at the international AIDS 2022 conference in Montreal, complete with signs and chanting. “Biden you failed the mpox response,” some protesters’ banners read.

In an interview with me, James Krellenstein, a leader of the protest and co-founder of advocacy group PrEP4All, sharply criticized the White House for keeping vaccine doses in the national stockpile until June 28 when cases started appearing in mid-May. “This was a deliberate decision. This was just homophobia, and transphobia, and incompetence, and a basic inability to follow the science,” said Krellenstein. “How can we not be furious about this?” (On that point: it’s worth reading this Washington Post story about the monkeypox vaccine shortage; the U.S. does not expect more doses until the end of October.)

A legislative fix for SCOTUS’ opinion on dialysis

A bipartisan group of lawmakers is out with a new bill that would close a loophole that allows employer health plans to limit their coverage for outpatient dialysis. The Supreme Court ruled that businesses could restrict the coverage back in June, as STAT’s Bob Herman previously explained.

The bill, led by Reps. Yvette Clarke (D-N.Y.), Jodey Arrington (R-Texas), Buddy Carter (R-Ga.), and Danny Davis (D-Ill.), is worth watching because it would likely save the government money. The exact rules are complicated, but people with kidney failure qualify for Medicare regardless of their age. Without any action from Congress, the Supreme Court’s decision will likely mean the government program picks up more of the tab for those who previously got dialysis coverage through work.

This is amidst other pressing developments in the kidney disease space: Recent reporting by the Washington Post highlighted inefficiencies in the national organ transplant system; in 2020, 21.3% of donated kidneys were not transplanted. The Senate Finance Committee will examine the issue Wednesday. And in an unrelated JAMA investigation released today, researchers corroborated previous studies that for-profit dialysis centers provide worse care than their non-profit counterparts; patients at for-profit facilities took longer to enter the transplant waitlist and were less likely to receive a kidney, too.

What we’re reading

  • Drug companies could create new drugs to protect the Covid vulnerable. Why aren’t they?, STAT
  • The FDA is poorly positioned to regulate pharmacies that illegally sell abortion pills, which may be counterfeit, expired, or not arrive at all, Politico
  • Teladoc’s earnings point to potential threats to the telehealth industry, STAT
  • Hospices have become big business for private equity firms, raising concerns about end-of-life care, Kaiser Health News
  • The campaign to rename monkeypox is getting complicated, STAT

Correction: An earlier version of this newsletter incorrectly described Juul’s relationship with its biggest investor, Altria.