Lawmakers Push Cures 2.0 As ARPA-H Funding Nixed From Reconciliation

Inside Health Policy

October 8, 2021 6:27 pm

Reps. Diana DeGette (D-CO) and Fred Upton (R-MI) say swift passage of their Cures 2.0 bill that would authorize a new federal biomedical research agency is critical now that key Senate Democrats reportedly stripped from the reconciliation bill a provision providing $3 billion for President Joe Biden’s proposed Advanced Research Projects Agency for Health.

The deleted reconciliation language also would have given ARPA-H “other transactions authority” (OTA), which the Congressional Research Service warned could have posed intellectual property issues for medical products developed through ARPA-H.

House Energy & Commerce Committee Democrats had included $3 billion for ARPA-H in their portion of the lower chamber’s proposed Build Back Better Act — a broad $3.5 trillion partisan reconciliation package that Democrats are struggling to scale back to around $2 trillion to get support from hold-out moderates.

On Friday (Oct. 8), reports emerged that senators had deleted the $3 billion ARPA-H funding language from the package.

According to Politico, Senate health committee Chair Patty Murray (D-WA) said the proposed agency needs to be authorized before it can be funded.

Ellie Dehoney, vice president of policy and advocacy for Research!America, asserted Murray’s team also didn’t think there were dollars within the committee to pay for ARPA-H, and wanted to focus on more bipartisan, bicameral work.

E&C’s $3 billion would have supplemented the $3 billion for ARPA-H that was included in the House-passed appropriations minibus in July, which would have brought the total amount for ARPA-H to $6 billion, much closer to Biden’s $6.5 billion funding request.

But any proposed funding is contingent on Congress passing legislation to establish the agency. Lawmakers did not include authorizing language in the reconciliation bill because it would have violated the Byrd rule, Upton said during an E&C reconciliation bill markup in September. The rule prohibits the Senate from considering extraneous matters as part of a reconciliation package.

Upton and DeGette previously acknowledged that the language in the reconciliation bill wasn’t perfect or as robust as it needed to be to get ARPA-H up and running. There are a number of things E&C needs to do to improve the language, but that wasn’t possible to do in reconciliation because of the Byrd rule, Upton added.

DeGette and Upton plan to include language to authorize ARPA-H in their emerging Cures 2.0 bill, which they recently said they hope to get passed by year’s end. Upton and DeGette released the draft version of Cures 2.0 in June and plan to officially introduce the bill in the coming weeks, the lawmakers said in a statement on Friday.

The news that ARPA-H funding language has been removed from reconciliation makes passages of Cures 2.0 even more important, the lawmakers said.

“Creating this new advanced research agency to cure some of the world’s most difficult diseases — such as cancer, Alzheimer’s, ALS and more — has been one of the Biden administration’s top priorities. And it’s why we have been working tirelessly for many months now to craft the language needed, not only to make ARPA-H a reality but, to ensure its success as part of our Cures 2.0 bill — which we plan to introduce in the coming weeks,” the lawmakers said.

Despite the reported removal of the funding language, Dehoney told Inside Health Policy there’s still a path for ARPA-H. She doesn’t think it’s a setback, especially if Congress passes the $3 billion for ARPA-H that was included in the House-passed appropriations minibus in July.

“It’s a change but there’s a path. There’s a very strong path to getting it done this year, I think,” she told IHP.

A year-end omnibus spending bill could also include authorizing language for ARPA-H.

“It’s not unprecedented for omnibus bills to have authorizing language in them. And so one path is the December omnibus bill,” Dehoney said.

Lawmakers on both sides of the aisle have expressed support for ARPA-H but some also say there need to be more committee discussions and hearings around the proposal.

Dehoney expects several more ARPA-H-focused bills to be introduced, including another on the House side from E&C health subcommittee Chair Anna Eshoo (D-CA). Murray and Senate health committee ranking Republican Richard Burr (NC) will also have their own legislation.

Dehoney says ARPA-H’s positioning also will be a key focus: Will it reside inside the National Institutes of Health, alongside NIH or in HHS? Dehoney said she wouldn’t be surprised if Eshoo’s legislative proposal puts ARPA-H inside of HHS.

Hiring authorities also need to be addressed, Dehoney said.

CRS also pegged IP as a potentially controversial issue that will need to be resolved.

The Biden administration has requested OTA for ARPA-H and that language was included in the E&C reconciliation provision.

OTA is an acquisition mechanism that does not fit into any of the traditional mechanisms used by the federal government for acquiring goods or services, such as contracts, grants or cooperative agreements, CRS explains in a Sept. 23 report. OTA is generally viewed as giving federal agencies additional flexibility to develop agreements tailored to the needs of the project and its participants, who do not have to comply with the government’s procurement regulations.

The government typically creates OTA to obtain leading-edge research and development or prototypes from commercial sources that are unwilling or unable to navigate the government’s procurement regulations, CRS says.

CRS asserts that OTA could end up being controversial in the context of medical products. A common justification for using OTA is that some companies might seek greater IP protections than are available under traditional federal funding mechanisms when deciding to work with ARPA-H.

In recent years, there has been increased interest in ensuring that medical products discovered with federal support are affordable, including by having the federal government exercise some of its IP rights to inventions developed with federal support. With those rights potentially waived in OTA authority, there might be some concern about the government’s ability to ensure that products developed with ARPA-H support are available and affordable commercially, CRS says.

Dehoney said there will need to be some discussions about IP. Those discussions can be pretty complex. The Defense Advanced Research Projects Agency and the Advanced Research Projects Agency-Energy have worked through IP issues, but it can be different for health products.

March-in is also a larger IP-related issue that’s going to have to be worked out no matter what, she added.

“It will be interesting to see how they talk about that, but I don’t see that as a deal breaker,” Dehoney said.

The Bayh-Dole Act allows federal agencies that fund private research to require patent holders to grant licenses to other companies to make patented products. The government has never used its so-called march-in power.

NIH is the primary agency to fund early research on drugs, but outgoing NIH Director Francis Collins has said the law only allows agencies to march in on patents when drugs are not available, and that power does not exist when the government wishes drugs were cheaper.

Collins recently announced he is stepping down after 12 years of running NIH, and Public Citizen and Knowledge Ecology International have said his retirement presents an opportunity to press the administration to use march-in rights to lower drug prices.