By Rachel Sachs, Jacob S. Sherkow, Lisa Larrimore Ouellette, and Nicholson Price
When President-elect Joe Biden is inaugurated in January, his administration will face the ongoing public health and economic challenges created by COVID-19. Even if Biden takes office without control of Congress, we can expect his administration to take important actions regarding COVID-19 innovation in response to the pandemic. In this post, we consider three main pillars of his administration’s likely response (as articulated by the Biden-Harris transition website) and explain the legal foundations behind them.
What innovation incentive and access goals has the administration put forth?
The transition website describes plans to encourage both innovation incentives for and access to COVID-19 diagnostics and treatments. Given that substantial progress has been made in developing new healthcare technologies to combat COVID-19—including, to date, at least two vaccine candidates that seem likely to be marketed in the US—the new administration’s efforts focus mainly on furthering the development of rapid diagnostics, improving access to them, and ensuring the broad and equitable distribution of personal protective equipment (PPE) and vaccines; these are laudable goals.
The administration plans to further the development of diagnostics, such as “next-generation testing, including at home tests and instant tests, so we can scale up our testing capacity by orders of magnitude.” This includes “[d]oubl[ing] the number of drive-through testing sites” and centralized production of at least some test kits, which the incoming administration likens to the War Production Board during World War II. This is good; as we’ve written about previously, at-home testing is a core strategy to controlling the pandemic. The current administration’s efforts focused on encouraging their development through NIH, and has had some success. The incoming administration rightly is focused on widely deploying such tests.
By contrast, the large-scale manufacture of PPE continues to be a persistent problem in the US, despite now being nearly a year since the current administration was warned of a new respiratory virus that would likely put millions of Americans at risk of illness or death. A national shortage of N95 respirators, for example, emerged as a key policy problem early in the pandemic that has not improved. The new administration recognizes that it needs to “[f]ix personal protective equipment (PPE) problems for good.” To do so, it plans to use the Defense Production Act “to ramp up production of masks, face shields, and other PPE so that the national supply of personal protective equipment exceeds demand and our stores and stockpiles.” The government indeed has supply chain power and expertise that it can lean on to coordinate the production and distribution of similar resources.
And with respect to vaccines—arguably the current administration’s most significant success—the new administration states it will use “$25 billion in a vaccine manufacturing and distribution plan that will guarantee [a successful vaccine] gets to every American, cost-free.” Whether these are new funds or money already committed to the effort remains unclear; the current administration’s vaccine’s plan intended for “most patients [to receive the vaccine] for no out-of-pocket costs.”
One noteworthy departure from the current administration’s priorities is explicit recognition of racial disparities in who has been most severely impacted by COVID-19. This includes “[e]stablish[ing] a COVID-19 Racial and Ethnic Disparities Task Force, as proposed by Vice President-elect Harris, to provide recommendations and oversight on disparities in the public health and economic response.” It even goes so far as to apply such efforts to “culturally competent approaches to contact tracing and protecting at-risk populations.” And, to the extent that personnel is policy, the new administration’s COVID Task Force is made up of members who have done top flight research on issues pertaining to COVID and equity, including Drs. Marcella Nunez-Smith and Celine Gounder. Nor do these changes appear to be temporary; the new administration plans that the Task Force will “transition to a permanent Infectious Disease Racial Disparities Task Force” at the pandemic’s completion.
What legal tools might the incoming administration use to accomplish these goals?
Any of these policy goals could be accomplished through new legislation, including appropriation of additional funds for combatting the pandemic. Congress is under pressure to pass a new COVID-19 stimulus package, although negotiations have been stalled for months, and it is unclear whether or when a compromise might be reached. The results of the January 5 Georgia Senate runoff elections will decide whether Democrats control both houses of Congress—making new legislation a more viable priority—or whether any new laws must navigate an even more challenging political landscape. But even without new congressional action, the Biden administration has numerous legal tools for accomplishing its goals concerning COVID-19. Here, we highlight three key options.
First, the Defense Production Act—passed at the start of the Korean War and reauthorized through 2025—can be used to control domestic industries through, for example government purchasing, requiring firms to prioritize government orders, and restricting exports. A report by the nonpartisan Congressional Research Service noted that the Trump administration’s use of the Defense Production Act has been “sporadic and relatively narrow,” and President-elect Biden has called for much more aggressive use of this authority to address PPE shortages. The Defense Production Act could also be used to increase supplies of diagnostics or products necessary for the vaccine supply chain like glass vials and freezers.
Second, the incoming administration can set priorities for the numerous agencies with discretion over innovation-related grantmaking budgets. The NIH—the world’s largest biomedical research funder—has a budget of over $40 billion. And direct public funding for health-related R&D is also provided by other agencies within the Department of Health and Human Services, including the CDC, FDA, and Biomedical Advanced Research and Development Authority (BARDA), as well as the Department of Defense, the Department of Veterans Affairs, and the Department of Energy. For example, we have previously written about the investments by the NIH and BARDA in Moderna’s SARS-CoV-2 vaccine and the NIH’s Rapid Acceleration of Diagnostics (RADx) initiative in collaboration with the FDA, CDC, and BARDA. These agencies can use both traditional ex ante grants as well as ex post or “pull” policies like prizes to support the Biden administration’s R&D goals.
Third, modulating government reimbursement amounts through insurers can also be used as an ex post innovation incentive. Some coverage decisions are out of the administration’s hands, such as whether to expand Medicaid eligibility under the Affordable Care Act in the 12 states that have failed to do so. But the Centers for Medicare and Medicaid Services (CMS) and the Department of Veterans Affairs have substantial authority over reimbursement decisions, such as for the more than 100 million Americans covered by Medicare and Medicaid. We have previously described steps taken by Congress and the Trump administration to expand coverage of COVID-19-related healthcare costs. HHS has repeatedly stated that it plans for COVID-19 vaccines to have no out-of-pocket costs for patients. And in October, CMS reimbursement rules were changed to cover with no cost-sharing even vaccines that receive emergency use authorization (EUA) rather than a full approval. In addition, CMS recently aggressively expanded access without cost-sharing to a monoclonal antibody therapy that had just received an EUA.
The incoming administration can play a crucial role not only in directing actions at individual agencies, but also in coordinating the wide array of innovation-related agencies into an integrated response. In prior posts, we have described how the early Trump administration responses to N95 respirator shortages and diagnostics represented interagency coordination problems. The Trump administration’s Operation Warp Speed, in contrast, seems to reflect a successful collaboration among agencies including the NIH, CDC, BARDA, and the Department of Defense. Coordinating the federal government’s COVID-19 response seems like one of the most important roles the incoming administration can play, whether or not it has support from Congress.
How does the Biden administration plan to communicate with the public?
In addition to more foundational innovation policy issues, communication is central to ongoing efforts to combat the pandemic. The pandemic has been greatly exacerbated by communications failures by the federal government, which has sent profoundly mixed messages on masks, the severity of the pandemic, and social distancing. The Biden administration aims to communicate better with the public in three related ways.
First, the administration plans to put doctors and scientists front and center in the pandemic response. Biden’s already-announced COVID task force shows this commitment. It is replete with scientists and physicians, particularly those with governmental expertise (like former FDA Commissioner David Kessler and Surgeon General Vivek Murthy)—though some have noted a lack of other experts, including social scientists. Biden also plans to return the CDC to the front line, including resuming regular daily briefings led by respected public health experts and scientists—and hopefully restoring some of the CDC’s lost luster and public authority.
Second, the Biden administration plans to provide evidence-based guidance for dealing with the pandemic dynamically. The transition guide suggests a more nuanced version of the policy prescriptions that have become familiar over the last several months. Social distancing, for instance, “is not a light switch. It is a dial. President-elect Biden will direct the CDC to provide specific evidence-based guidance for how to turn the dial up or down…” (Those of you who follow public-health-law-focused Professor Lindsay Wiley on Twitter will be familiar with this theme.)
Third and finally, the administration plans to be substantially more transparent than the Trump administration has been and to promote that transparency throughout the various agencies involved. For instance, the Biden administration plans to “publicly release clinical data for any vaccine the FDA approves, and authorize career staff to write a written report for public review and permit them to appear before Congress.” The FDA is now planning to do this—but the GAO is concerned that the FDA has been insufficiently transparent in its COVID-19 decisions to date, especially emergency use authorizations for therapeutics. Presumably, greater transparency about CDC guidance on public health matters is also likely to follow in a Biden administration. Particularly as scientists discover more about COVID-19 and recommendations change over time, transparency about those recommendations is especially important to maintain public trust. For therapeutics, non-pharmaceutical interventions, and vaccine distribution alike, public trust is key, and effective and transparent communication are essential to restoring and maintaining that trust.
This post is part of a series on COVID-19 innovation law and policy. Author order is rotated with each post.
