October 25, 2021
Two Major Health Initiatives Take Shape
FY22 appropriations priorities have become clearer with the October 18 posting of the Senate Appropriations Committee (SAC) majority’s recommendations for nine funding bills. None of the draft bills were considered by the Senate Appropriations Committee or brought to the Senate floor, but they represent the Senate’s opening position in negotiations with the House. The Biden Administration will also weigh in to protect its FY22 budget priorities, which were largely supported (and even expanded) by the House and SAC Democratic majorities.
These bills demonstrate the good work we can do with a topline in the Fiscal Year 2022 Budget Resolution, passed by both the House and the Senate earlier this year. I would have preferred that we followed regular order and considered these bills in Committee. Unfortunately, our Republican colleagues have made clear they will prevent any additional consideration of bills until we have a negotiated topline. But I cannot and will not allow that to stop our work.
Senate Appropriations Chairman Leahy (D-VT), October 19
Federal FY22 health funding highlights include two major new HHS initiatives — one focused on public health infrastructure and the second on transformative, cutting-edge research. Both touch on information technology. While much of congressional activity this year has been sharply partisan, support for these initiatives has been bipartisan and discussions constructive.
Funding to “Turn the Tide” for Public Health Infrastructure
Rebuilding public health infrastructure with technology, people, and data, is a Biden Administration priority. CDC Director Walensky testified that the COVID-19 pandemic “put a spotlight on the fragility of our public health infrastructure.” The Biden Administration requested $10.6 billion for CDC’s FY22 budget, a $2.7 billion increase above the FY21 level. Almost $1 billion of the Biden CDC funding is for a set of initiatives to rebuild public health infrastructure, including IT and data systems. Overall, the House-passed bill provides CDC $10.5 billion, and the SAC draft bill includes $9.7 billion. Even at the lower Senate funding level, CDC funding would increase 24% over FY21 — its largest budget increase in almost twenty years.
The major aspects of the public health infrastructure rebuild are:
- Technology upgrades at CDC, states, and localities so that data reporting is fast and accurate, enabling CDC to do real-time analysis and prediction
- Funding that is not disease-specific and is sustained over time
- Flexible funding for states and localities, so they can invest in equipment, facilities, and information technology with a long-term view — the Biden budget includes $400 million; the House includes $1 billion for a new fund to build national infrastructure capacity, while SAC includes $600 million
- CDC’s Data Modernization Initiative to transform CDC’s data analytics and enable real-time communication and decisions with enhanced compute power and data storage — the Biden budget includes $150 million, and both the House and SAC match that level
- Workforce needs and training — the House and SAC match the $106 million FY22 Biden Budget request
- Biden’s budget includes $368 million for Global Public Health Protection, including enhanced surveillance and improved data analysis and forecasting; the House provides $448 million and SAC recommends $203 million for Global Health
Overall, House-passed appropriations add over $700 million to the Biden public health infrastructure initiative, for a total of $1.7 billion. The SAC majority recommendation is $100 million above the Biden budget request (see Chart I).
In addition, the Build Back Better Reconciliation Act (BBB) reported by House committees addresses public health infrastructure with overlap to the initiative described above. BBB includes $7 billion for a new Core Public Health Infrastructure grant program for states and localities, including technology modernization investments. Under that program, a minimum of $3.5 billion is for state and local health departments, a minimum $1.75 billion is for competitive grants, and up to $1.75 billion is for CDC.
The BBB also includes $5 billion for renovation, expansion, and modernization of state and local public health and CDC laboratory infrastructure. These funds focus on increasing testing and response capacity and technical upgrades.
The size and content of BBB are still under active negotiation. Enactment of any BBB funding for public health infrastructure may affect final FY22 appropriations priorities and funding levels.
Transforming Biomedical Research & Development through “ARPA-H”
The FY22 Biden budget includes $6.5 billion (over three years) for a new Advanced Research Projects Agency for Health (ARPA-H), to accelerate biomedical discoveries by providing funding to industry, academia, national labs, and consortia. ARPA-H is patterned on the Defense Department’s DARPA as a fast, milestone-based, and purposefully high-risk research arm. The administration indicates that ARPA-H research will initially focus on cancer, diabetes, and Alzheimer’s but is not limited to those conditions. ARPA-H funding is intended to be additive to National Institutes of Health (NIH) research; advocates have expressed strong concerns that NIH funding does not suffer to pay for ARPA-H.
Organizationally, ARPA-H will be under the NIH umbrella, but with an external advisory board and a separate director. After hosting 15 listening sessions with 5,100 participants to seek input from patient advocates, researchers, industry, and others about potential ARPA-H opportunities and barriers, the White House Office of Science and Technology Policy and NIH issued a report on September 30. Suggestions include leveraging or building large-scale quantum computers to combine AI and quantum mechanics to analyze data, use of wearables and digital technologies, and developing new treatment technologies such as nanoparticulate drugs.
From concept to law, many details of ARPA-H’s operation remain undetermined. This new program must be authorized and funded by Congress. Two members of the House Energy and Commerce Committee (E&C), Rep. DeGette (D-CO) and Rep. Upton (R-MI) have stated their intention to authorize ARPA-H along with Cures 2.0 this fall, and they included a placeholder for ARPA-H in draft legislation they circulated in June.
The BBB bill also addresses ARPA-H. E&C’s BBB recommendations include authorization language and $3 billion in ARPA-H funding. However, as negotiations for the infrastructure package continue, press reports indicate that ARPA-H may be dropped from the final product. Interviews with Sen. Murray (D-WA) and Sen. Blunt (R-MO), who are Chair and Ranking Member of the Labor/HHS appropriations subcommittee, seem to confirm this. On October 8, Blunt stated, “I’m a supporter of the concept…I think it’s a little too early to tell how we get it done, but I do think we can, and should, get it done.”
As authorization talks continue, there is progress on the funding side. The House FY22 Labor-HHS appropriations bill includes $3 billion for ARPA-H. While significantly below the $6.5 billion Biden budget, $3 billion for an unauthorized “new start” is a victory for the administration. SAC includes $2.4 billion for ARPA-H in its draft bill.
With bicameral and bipartisan support for both public health infrastructure and biomedical research, our forecast for significant new funding in these areas is sunny. But, as we note, many funding and policy details are unresolved. Even programs with bipartisan support can suffer collateral damage from broader partisan storms such as BBB disputes, FY22 discretionary spending topline differences, or poison-pill policy riders on funding bills. For the remainder of the year, our forecast has legislative storms on the radar.