Mandate repeal is still in play in tax reform Presented by

MANDATE REPEAL IS STILL IN PLAY — Senate Republicans are still considering repealing Obamacare’s individual mandate as part of tax reform to help pay the cost of making some tax cuts permanent, despite not including it in a bill they released Thursday, POLITICO's Jennifer Haberkorn reports.

GOP leaders are talking with rank-and-file members to assess whether they have the necessary 50 votes to scrap the least popular part of Obamacare.

“Any one or two senators could keep it from happening, so everyone has a lot of leverage and my guess is people are sorting out the pros and cons,” Sen. Jerry Moran (R-Kan.) said after a briefing on the tax package. “The efforts to include it have increased in the last few days.” More for Pros.

Meanwhile:

— Senate tax bill preserved medical deductions. The Senate tax bill would allow people to continue to deduct major medical expenses, according to a summary of the legislation and comments from senators who were briefed on Thursday.

The House tax bill controversially eliminates that deduction, which is taken by people with big medical expenses, such as those often associated with long-term care, a special needs child or very expensive drugs for diseases like cancer.

—Senate modifies rare disease tax credit. The Senate tax plan also would alter, but not completely eliminate, a popular tax perk for drug companies conducting rare disease research. Instead of the current 50-percent tax credit for qualified clinical trial expenses, the plan would limit the orphan drug credit to 50 percent of qualified clinical testing expenses for the taxable year as exceeds 50 percent of the average qualified expenses for the three previous taxable years.

If there are no qualified clinical expenses during at least one of the three preceding years, the credit is equal to 25 percent of qualified expenses. The credit will also be limited if the clinical research being done on the drug is for an already approved use of the product that is not for a rare disease.

In contrast, the House Republican tax plan proposes getting rid of the orphan drug credit altogether. The perk, which dates to 1983, is one of a handful of incentives credit with spurring development of drugs for diseases that affect fewer than 200,000 Americans.

Senate Republicans are weighing tax reforms with implications for health care. | AP Photo

FDA TO PRIORITIZE REVIEW OF MORE GENERIC DRUGS — It's the latest step by FDA to try and get drug prices down by speeding cheaper generic versions to market, POLITICO's Sarah Karlin-Smith reports.

Under Thursday's announcement, FDA will conduct faster reviews of generic drugs that meet the agency’s standards after the expiration of the 180-day marketing exclusivity period. (That period is rewarded to the first generic drug that challenges a branded drug's patents and files a complete application to FDA.)

… FDA previously said it wouldn't prioritize review of generic drugs until it approved three generic options for each drug, because prices don’t tend to fall significantly until there are at least three generic competitors.

… Thursday's news came a day after FDA released guidance to help make it easier for generic products to get to market when a drug has an FDA-mandated safety program known as a REMS. Brand companies sometimes used REMS to try and block competition.

A message from PhRMA: Today, there are several promising vaccine candidates in stage three clinical trials. These trials have tens of thousands of participants, from every walk of life. From development to robust clinical trials, and throughout manufacturing, these vaccine candidates follow the same rigorous process of other vaccines that have saved millions of lives. More.

FORMER FDA COMMISSIONERS TO CONGRESS: DON'T GIVE PENTAGON THE POWER TO APPROVE DRUGS — Five former FDA commissioners on Thursday warned the House and Senate Armed Services committees to halt their plan to allow the Pentagon to go around the FDA and approve drugs and medical products in some circumstances — a high-profile warning that may come too late to stop the bill.

“The current law is very clear in giving the sole statutory authority for drug and medical device review to the FDA,” the former commissioners — Margaret Hamburg, Jane Henney, David Kessler, Mark McClellan and Andrew von Eschenbach — wrote to the lawmakers overseeing the annual defense policy bill, H.R. 2810 (115), which includes language to allow a five-person Defense Department committee to approve medical products for use by soldiers. “This provision … undermines that longstanding statutory framework and likely increases the risks for our military personnel.”

...But it’s not clear whether the former commissioners' opposition will slow the bill, which was finalized by a conference committee on Wednesday and retains broad support.

THANK GOODNESS IT'S FRIDAY PULSE — And we hope you'll join us at Tuesday's POLITICO event, " Emerging Health Care Leaders," where your PULSE correspondent looks forward to asking hard questions of rising stars, like who's the best boss to work for and how it feels to emerge as a proverbial butterfly. Have you emerged in your career yet? Many days, your author still feels like a confused caterpillar. Send tips to [email protected] or @ddiamond on Twitter.

With help from Sarah Karlin-Smith (@SarahKarlin) and Victoria Colliver (@vcolliver).

ICYMI: What Sen. Bennet plans to ask the next HHS secretary. The Colorado Democrat, who appeared on POLITICO's "Pulse Check" podcast this week, will likely get two chances to publicly grill the next nominee. And he already has one burning question. More for Pros.







California: State calls for an emergency order on Trump’s birth control rule. California Attorney General Xavier Becerra late Thursday filed a request in federal court for a preliminary injunction to put an immediate stop to President Trump’s new rule that allows virtually any employer to deny women coverage for contraception on religious or moral grounds. Becerra’s lawsuit challenging the directive, which was filed on Oct. 6, the same day Trump issued it, has been joined by attorneys general in Delaware, Maryland, Virginia and New York, POLITICO's Victoria Colliver reports.

Based on an advanced copy of the preliminary injunction motion obtained by POLITICO, the Attorney General is expected to argue the new rules violate various current laws are “in excess of statutory jurisdiction” and foster “an excessive government entanglement with religion.”

... Last month, Becerra lost a bid for an emergency order related to a different Obamacare challenge. The state, joined by 18 others, tried to get an order to force the Trump administration to resume making the cost-sharing reduction payments, but the judge failed to be convinced by the argument for immediate and irreparable harm.

Most women in California, including those covered by the state exchange and Medi-Cal, aren’t affected by the rule change because state law still requires that health insurers regulated by the state cover birth control. But those who work for privately insured companies regulated by the federal government are vulnerable. Some may have already lost access to birth control, or may lose it when a new plan year starts in January. The state is expected to argue that could lead to a surge in unintended pregnancies, and put a greater burden on the state to deal with the ramifications. More for Pros.

FIRST IN PULSE: Tumblr CEO joins business leaders in committing to birth control for employees. Tumblr's David Karp is the latest executive to sign on to Planned Parenthood's "#BusinessForBC" campaign, joining the leaders of Warby Parker, Levi's and other companies. Watch Karp's announcement video.

Twenty-three national businesses have now publicly pledged to continue to offer birth control to their workers, a campaign that began after the Trump administration effectively rolled back the Affordable Care Act's contraception coverage mandate last month.

Washington state: ACA exchange sees surge of first-week sign-ups. There was a 50-percent jump in new enrollees year-over-year, the Washington Health Benefit Exchange said on Thursday.

During the first week of open enrollment in 2017, there were 4,550 new applications for coverage submitted, the state exchange said in a release. That compares to 2,964 new applications for coverage submitted in the first week of enrollment last year.

… The surge of applications in Washington state is consistent with national trends, with the pace of sign-ups at HealthCare.gov in the first days of this year's open enrollment nearly double last year's.

FIRST IN PULSE: Association for Community Affiliated Plans announces new pro-CHIP campaign. The "CHIP is US" digital campaign builds on strategies from the association's “Medicaid is US” campaign from the summer, which helped build resistance to the GOP's planned Medicaid changes.

The new campaign, which is posting resources and sample constituent emails at http://www.CHIPisUS.org/, is intended to build momentum for long-term funding of the children's health insurance program. It's been more than 40 days since Congress let CHIP funding lapse.

Marc Charon named new chief financial operating officer at National Quality Forum. Charon, who will be responsible for NQF's operations, previously spent a decade at the Managed Funds Association where he served in a variety of executive roles.

Lisa Zamosky will be running comms for eHealth. It's true: Our deputy health care editor, who previously was an L.A. Times columnist (and contributor to California Healthline, among other publications) is heading to the private sector. We wish her well.

"On the table, the brain appeared normal. But it was profoundly damaged," John Branch writes in the NYT about an infamous post-mortem that could have long-lasting ramifications. More.

Veterans are cautiously watching the Trump administration's possible reforms to the Veterans Choice program, Maya Rao writes in the Star-Tribune. More.

UPMC's $2 billion plan to three new specialty hospitals is setting off alarm bells for health care experts, Bob Herman writes in Axios. More.

KHN's Amy Martyn looks at how a grass-roots network of doctors is delivering supplies to Puerto Rico. More.

Follow us on Twitter Joanne Kenen @joannekenen



Adriel Bettelheim @abettel



Jason Millman @jasonmillman



Lauren Morello @lmorello_dc



Sara Smith @sarasmarley



Dan Diamond @ddiamond



Zach Brennan @ZacharyBrennan



Adam Cancryn @adamcancryn



Tucker Doherty @tucker_doherty



Brianna Ehley @briannaehley



Dan Goldberg @dancgoldberg



David Lim @davidalim



Susannah Luthi @SusannahLuthi



Alice Miranda Ollstein @aliceollstein



Sarah Owermohle @owermohle



Carmen Paun @carmenpaun



Mohana Ravindranath @ravindranize



Rachel Roubein @rachel_roubein



Darius Tahir @dariustahir