HIDA Members Head to the Hill Where Tariffs and Preparedness Led the Agenda

August 2019

HIDA Government Affairs Update

By Linda Rouse O'Neill
Vice President, Government Affairs, HIDA

Over 60 HIDA members convened in Washington, D.C. in early June to educate lawmakers and their staff about key issues affecting the healthcare supply chain. Attendees at the annual Washington Summit conducted 120 Capitol Hill meetings.

Distributors attending the event reported productive discussions with lawmakers and congressional staff who sit on key committees influencing healthcare and distribution. These include the Senate Finance, Armed Services, and HELP (Health, Education, Labor, and Pensions) committees, as well as the House Ways and Means, Energy and Commerce, and Armed Services committees.

While trade policy and pandemic preparedness were top-of-mind, conversations also included the medical device tax, government purchasing reform language in the National Defense Authorization Act, and other issues.

Here is a look at some of the topics HIDA members discussed with elected representatives:

Trade Policy and Tariffs

Summit participants explained how tariffs on healthcare products create risk to the nation’s public health preparedness capabilities. Exam gloves and isolation gowns protect healthcare workers, first responders and patients from the spread of infectious diseases. Ebola is once again an epidemic on the African continent and a single case in the U.S. would drive a substantial increase in demand for this protective equipment and supplies overnight. Placing a tariff on these products will further stress supplies at a critical time.

From left to right: Chris Kerski, Cardinal Health; Jerrica Mathis, Crowell & Moring; Chris Fagnani, Lynn Medical; Steven Sepulveda, Mesa Biotech.

In addition to raising the cost of care, summit participants explained that placing tariffs on healthcare goods could create risks for clinicians, first responders, and patients. It is important for policymakers to understand the complexities of the U.S. healthcare supply chain, so tariffs and trade policies do not unintentionally constrain preparedness capabilities, they added.

Emergency Preparedness

HIDA members thanked lawmakers for passing the Pandemic and All-Hazards and Advancing Innovation Act of 2018 (PAHPAI). This bill was a huge win for the industry as for the first time supply chain and commercial partnerships are included in legislation. Specifically, the bill requires the communication of regional health systems to the supply chain. It also requires the federal government to assess ancillary product availability, commercial market capacity and identify substitutions in its annual process. Lastly, it requires coordination with commercial market on response and re-entry.  

Summit participants hear political insights and a forecast for the current Congress.

HIDA members also shared their experience from recent pandemics and natural disasters, emphasizing the need for improved coordination and greater elasticity in the supply chain. Summit attendees were grateful for the passage of PAHPAI, as it underscores the value of public and private sector coordination during an emergency.

Medical Device Tax

Distributors thanked members of Congress for the two-year moratorium on the Affordable Care Act’s medical device tax. HIDA members explained to lawmakers the deleterious effect it had on medical device companies’ research and development efforts, and asked that the tax be repealed. Without congressional action to extend or eliminate the tax, it will take effect again at the end of this year.

Left to Right: HIDA President and CEO Matt Rowan, HIDA Chairman Mark Hineser, Louisiana Sen. Bill Cassidy, MD, and Chris Kerski, Cardinal Health.

Government Purchasing Reform
Distributors cautioned lawmakers that the General Services Administration’s efforts to reform the federal procurement system leaves open the door for future inclusion of healthcare-related products on the Commercial Ecommerce Portals program. HIDA members asked that Congress either exempt healthcare products from purchase through this portal or greatly alter the process for their future procurement.

Many healthcare products are not well-suited for procurement through the ecommerce portals. Mistaken delivery of the wrong surgical supplies or antibiotics, for example, could place patients’ lives at risk. Additionally, many medical goods require specialized handling and storage. Exposing these to the wrong environment or comingling them with non-medical freight could render them useless or even harmful, summit attendees said.

HIDA regularly advocates for distributors through meetings with lawmakers and partnerships with federal agencies year round. If you would like to get involved, or would like more information about the HIDA Washington Summit, please contact us at HIDAGovAffairs@HIDA.org.