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Morning Briefing

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Monday, Dec 11 2017

Full Issue

Tax Credit That Encouraged Development Of 'Orphan Drugs' Likely On Chopping Block

The credit provided incentive for drugmakers to spend money on creating costly treatments for small populations. The Senate and the House are working out the differences between the two versions of the tax overhaul.

A tax overhaul bill being hammered into its final form by Senate and House Republicans is all but certain to cut tax credits designed to encourage development of “orphan drugs” meant to treat rare diseases afflicting limited numbers of patients. Since 1983, a federal law has allowed fledgling companies to write off 50% of the cost of human clinical studies to develop drugs aimed at small markets of patients who wouldn’t otherwise have access to drugs specifically designed for their ailments. The law was designed to address crippling diseases afflicting a few thousand, or fewer, adults and children. (Burton, 12/8)

Anne Hammer is one of millions of elderly Americans who could face a substantial tax hike in 2018 depending on the final negotiations over the Republican tax bill. In her retirement community in Chestertown, Md., it’s the big topic of conversation. Hammer is 71. Like many seniors, her medical bills are piling up. There are doctor visits, insurance premiums, drugs, a colonoscopy, a heart scan, an unexpected trip to the emergency room that lasted three days, ongoing monitoring for breast and ovarian cancer that run in her family and the costs of medical staff at her retirement community. Her out-of-pocket medical expenses vary, but she estimates they are about $20,000 a year. (Long, 12/10)

A progressive activist who identified himself as diagnosed with Lou Gehrig's Disease (ALS) confronted Sen. Jeff Flake (R-Ariz.) on an airplane this week over Flake's vote on the GOP tax-reform bill. Activist Ady Barkan, a staffer at the Center for Popular Democracy, questioned Flake on Thursday after the Arizona Republican voted in favor of the GOP tax-reform bill that passed the Senate in a late-night session last week. Videos of the 11-minute conversation were posted on Twitter. (Bowden, 12/8)

Republicans must resolve the differences between the House and Senate versions of their tax overhaul bill before they can pass a final version. Both versions include substantial overall tax cuts for individuals and businesses, but the details vary, resulting in different outcomes for different groups. (Andrews and Parlapiano, 12/8)

In the coming days, a small group of Republicans will meet in Washington to try to settle a simple question: Should their revised tax bill eliminate a deduction for medical expenses and take away thousands of dollars each year from many people who are sick and, often, old? The two competing tax bills that will form the basis of an attempt at compromise over the coming weeks, one from the House of Representatives and one from the Senate, answer the question differently. The Senate bill would keep a deduction for medical expenses intact. The House bill would kill it off entirely. The more money that people had to spend this year, the more they would lose next year if the House prevails and the deduction disappears. (Lieber, 12/8)

And in other tax news —

A fight over ObamaCare is spilling into Congress’s December agenda, threatening lawmakers’ ability to keep the government open. President Trump signed stopgap legislation Friday aimed at averting a shutdown and keeping the government funded through Dec. 22. The bill allows lawmakers to focus on the next — and seemingly more difficult — negotiating period. (Weixel, 12/9)

ObamaCare's "Cadillac tax" has emerged as a sticking point in bipartisan negotiations over delaying certain health-care taxes before the end of the year. Democrats are pushing to delay the “Cadillac tax” on high-cost health plans, which is despised by unions, but Republicans are pushing back and have resisted including the Cadillac tax in the package, sources say. (Sullivan, 12/10)

This is part of the Morning Briefing, a summary of health policy coverage from major news organizations. Sign up for an email subscription.
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