Government Interference Would Jeopardize Access to Meds

Proposed changes to the Medicare Part D program are once again making the headlines. Last week, Senator Amy Klobuchar introduced an amendment to allow the federal government to interfere in drug price negotiations between Part D plans, pharmaceutical manufacturers and pharmacies. The Senate did not move forward with the amendment, which is good news for the 577,949 Kentuckians seniors who rely on the program to access their medicines.

Medicare Part D is viewed by stakeholders across the board as a successful program. This success can largely be attributed to the non-interference clause, which allows purchasers to negotiate substantial discounts and rebates directly with manufacturers, saving money for beneficiaries and taxpayers alike.

The nonpartisan Congressional Budget Office has stated that if the federal government participated in drug pricing, it “would not be able to negotiate lower prices than exist now without restricting access to medicines for beneficiaries.” Injecting government into drug negotiations would only harm the many seniors and individuals living with disabilities who rely on Medicare Part D for their health and wellbeing.

Over the past decade, Medicare Part D has proven to be a life-changing—and cost-effective—program for enrollees. Medicare Part D is linked to increased medication adherence, improved overall health outcomes and lower costs. Last year alone, nearly 200,000 Medicare beneficiaries lived at least one year longer, with an average increase in longevity of 3.3 years. These men and women are living longer because Part D gives them access to the medicines they need to be healthy.

The Kentucky Life Sciences Council thanks Senator Paul, Senator McConnell and health care advocates across the state who support keeping our successful Part D program intact.

Kyle Keeney is the Founder and Executive Director of the Kentucky Life Sciences Council.


A generic approach to biosimilar substitution won’t do

In Kentucky you don’t have to look far to find the positive impacts of health care innovation.

From preventative medicines to new cures, advances in medical technology have been the driving force behind significant improvements in patient health. But as new treatment options are introduced to the market, protecting patient safety has never been so important.

This year, the General Assembly is considering legislation that would establish a much-needed framework of regulations for biologics and biosimilars – breakthrough treatments that could help many people living with chronic diseases.

Unlike oral pills or tablets, which are made from chemically derived ingredients, biologics are complex treatments manufactured from living organisms – cells programmed to produce a desired therapeutic substance in a highly controlled, sterile environment.

While drug manufacturers are able to create chemically identical copies of pharmaceutical medicines such as oral pills – think generic versions of brand name drugs – the same isn’t true for biologics because they are made from living materials that cannot be perfectly duplicated.

Drug manufacturers can, however, create a version of a biologic that is so close to the original medicine it may be deemed a biosimilar. This could benefit many patients with chronic diseases, as biosimilars are expected to cost significantly less than biologics.

SB 134, in its originally intended form, would establish much-needed guidelines for substituting an interchangeable biosimilar to ensure patient safety. This includes ensuring that substitution would occur only when the FDA has designated a biosimilar as interchangeable; that the prescribing physician would be able to prevent substitution if he or she feels it is not in the patient’s best interest; that pharmacists would be required to communicate what product was dispensed with the prescribing physician; that the patient, or the patient’s authorized representative, would, at a minimum, be notified of the substitution; and that the pharmacist and the physician would keep records of the substitution.

Given the complex nature of biologics and the challenging medical conditions they treat, these are commonsense guidelines to ensure that doctors, patients and pharmacists are all informed about the medications that are prescribed and ultimately dispensed to the patient.

Biologic medicines are an important new tool in treating and curing disease. Biosimilars are also important for providing different and sometimes less expensive options for treatment.

But let’s be clear. Patient safety and ensuring physician involvement is far more important than helping the insurance company’s bottom line.

Legislators should pass SB 134 as it was originally intended. Common sense dictates that we make sure physicians are informed about what products their patients are using to treat their life threatening and chronic illnesses.

Kyle Keeney is the Founder and Executive Director of the Kentucky Life Sciences Council.


KLSC to Senate: Pass House Bill 330 to Combat Prescription Drug Abuse in Kentucky

KENTUCKY LIFE SCIENCES COUNCIL TO SENATE: PASS HOUSE BILL 330 TO COMBAT PRESCRIPTION DRUG ABUSE IN KENTUCKY
Access to innovative medicines critical to curbing improper opioid use and addiction

Frankfort, Ky. (March 24, 2016) – Today the Kentucky Life Sciences Council (KLSC), the Commonwealth’s leader in developing the life sciences industry, called on the State Senate to bring House Bill 330 to passage this session.

“Innovations in the health care industry have provided patients and providers with new medicines to treat pain more effectively,” said Dr. Kyle Keeney, president and CEO of the Kentucky Life Sciences Council. “Unfortunately, people have found ways to misuse and abuse these medicines. In Kentucky, we now face a very serious prescription drug abuse epidemic that is taking lives and hurting our communities.”

House Bill 330 seeks to address this epidemic by increasing access to a new type of prescription medicine that has entered the market in recent years, thanks to advances in science in and medicine. Abuse-deterrent opioids—commonly referred to as ADOs—are reformulated versions of common opioids, such as hydrocodone, oxycodone and morphine. ADOs have built-in technology that prevents potential abusers from crushing, injecting or smoking the medication, while still providing pain relief to patients with legitimate medical needs.

“ADOs could significantly lower abuse and addiction rates throughout Kentucky, but patients must be able to access them through their health plans. Despite the many proven benefits of ADOs, many Kentucky insurers currently refuse to cover them because they are, in some cases, more expensive than the non-abuse-deterrent formulations,” said Keeney. “In reality, this difference in cost is a small price to pay if it means saving lives and stopping prescription drug abuse in the Commonwealth.”

House Bill 330 passed the House last week with a 94 to 1 vote. Despite broad bipartisan support, the legislation has still not been called in the Senate.

“There have been many efforts over the years to curb prescription drug abuse and addiction—some of them more effective than others,” said Keeney. “Abuse-deterrent opioids represent an innovative approach, built on scientific research, to truly help Kentucky reverse this longstanding and dangerous trend once and for all. I strongly encourage our senators to bring House Bill 330 to the floor and pass this critical legislation in 2016.”

About KLSC
The Kentucky Life Sciences Council (KLSC) is a statewide association focused on developing the life science industry in Kentucky. KLSC works to educate both state and federal policymakers, the media, and the public about how legislative policies will affect the growth and development of the life sciences industry.

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BIO & Kentucky Life Sciences Council Support Bill Ensuring Patient Access to Interchangeable Biologic Medicines

BIO & Kentucky Life Sciences Council Support Bill Ensuring Patient Access to Interchangeable Biologic Medicines

Frankfort, KY (March 17, 2016) – The Biotechnology Innovation Organization (BIO) and Kentucky Life Sciences Council (KLSC) today voiced support for Kentucky Senate Bill 134, legislation that properly preserves patient and physician access to accurate prescription information, while promoting a competitive market for complex biologic medicines.

This important piece of legislation gives pharmacists the ability to substitute lower cost interchangeable biologic medicines while safeguarding the primacy of the physician-patient relationship and maintaining communication between patients and their treatment teams.

The policies outlined in the bill align with BIO’s principles on biologic substitution, therefore BIO and KLSC support this legislation and are grateful for bipartisan support and leadership on this issue.

Following today’s House Health and Welfare Committee hearing, BIO and KLSC highlight four key points pertaining to biosimilars:

  • The full spectrum of biologic medicines are safe and effective: Similar to innovator biologics, interchangeable biologics will provide patients opportunities to address their unmet medical needs
  • Substitution should occur only when the FDA has designated a biologic product as interchangeable
  • Biosimilars and interchangeable biologics are not generics: interchangeable biologics will be highly similar to the innovator biologic medicines they seek to replicate but not exactly the same. Therefore the policy issues surrounding these medicines are different than those associated with generic medications
  • Communication between physicians, patients and pharmacists, as well as all appropriate parties in the patients care continuum, is imperative so that any immunogenicity issues or adverse reactions from innovator biologics, biosimilars or interchangeable biosimilars can be documented and appropriately addressed

“We are pleased to see Kentucky legislators leading the way in adopting policies that not only support a growing industry in our state, but more importantly allow patients access to safe and effective therapies to treat chronic conditions,” said Kyle Keeney, Executive Director of the Kentucky Life Science Council. “We encourage the House of Representatives to pass this legislation that will allow for more treatment options with potential cost savings and will also improve patient safety by ensuring that the prescribing physician is always notified of the exact medication dispensed.”

“Ensuring access to these potentially life-saving medications is a shared goal with patient groups and both innovator biologic and biosimilar manufacturing companies,” said Patrick Plues, Senior Director, State Government Affairs, BIO. “Due to the complexities of biologic medications, existing Kentucky laws governing generic substitution cannot be applied to biosimilars and we must address this issue prior to interchangeable biologics coming to market.”

While the U.S.  Food and Drug Administration (FDA) oversees approval of biologic medicines and designation of interchangeability, policies governing whether one product may be substituted in place of a doctor’s prescription and whether a pharmacist must inform patients and doctors are covered by state law.

Patients and physicians managing chronic conditions are generally aware of which biologic treatments work best in their unique circumstances. Communicating with patients and physicians allows everyone involved the opportunity to discuss past treatment experiences so that any possible unexpected issues can be better understood and avoided.

As the Kentucky Legislature continues to address issues related to biologic medicines, BIO and KLSC encourage policy makers to continue to put patients first.

About KLSC

The Kentucky Life Sciences Council (KLSC) is a statewide association focused on developing the life science industry in Kentucky. KLSC works to educate both state and federal policymakers, the media, and the public about how legislative policies will affect the growth and development of the life sciences industry.

About BIO

BIO is the world’s largest trade association representing biotechnology companies, academic institutions, state biotechnology centers and related organizations across the United States and in more than 30 other nations. BIO members are involved in the research and development of innovative healthcare, agricultural, industrial and environmental biotechnology products. BIO also produces the BIO International Convention, the world’s largest gathering of the biotechnology industry, along with industry-leading investor and partnering meetings held around the world. BIOtechNOW is BIO’s blog chronicling “innovations transforming our world” and the BIO Newsletter is the organization’s bi-weekly email newsletter. Subscribe to the BIO Newsletter.


PhRMA Releases New Policy Solutions for Delivering Innovative Treatments to Patients

Washington, D.C. (March 10, 2016) — Today, at the Pharmaceutical Research and Manufacturers of America (PhRMA) 2016 Annual Meeting, PhRMA president and CEO Stephen J. Ubl announced the association’s policy solutions for delivering innovative treatments to patients.

“I am a passionate believer in the power of biomedical innovation to save and improve lives,” Ubl said. “We are on the cusp of a golden era in medical discovery and have the potential to revolutionize the treatment of costly and debilitating diseases. But we can’t take this progress for granted.

“Now is the time for PhRMA to play a leadership role in advancing pragmatic, pro-consumer policies that enhance the private market and address costs holistically.”

The proposals in the policy framework are aimed at modernizing the drug discovery and development process, promoting value-driven health care, engaging and empowering consumers and addressing market distortions.

“We need to improve on the competitive market to build a sustainable, health care system that stems the growth of chronic disease and fosters the development of tomorrow’s cures.”

The policy solutions for delivering innovative treatments to patients include:

  • Modernizing the Drug Discovery and Development Process –Pro-patient, pro-science, pro-market reforms at the Food and Drug Administration would enhance the competitive market for biopharmaceuticals, drive greater efficiency in drug development and discovery and help hold down costs for payers and consumers.
  • Promoting Value-Driven Health Care – Payers face challenges in paying for the value of prescription medicines because regulatory barriers impede open communication by manufacturers, predictability regarding the biopharmaceutical pipeline, and innovative contracting. Value-driven payment for prescription medicines can promote efficiency and affordability by ensuring that more patients receive the best treatment for them, the first time around. We need to remove the hurdles making it difficult for innovative, sensible payer/manufacturer arrangements to emerge.
  • Engaging and Empowering Consumers – A well-informed consumer is an engaged and empowered patient. We need to make more information on health care out-of-pocket costs and quality available to patients. In addition, vulnerable patients should have the protection of enforceable, common sense rules that prevent discrimination and remove barriers to access. These steps will improve coverage and access and help make medicines more affordable to patients.
  • Addressing Market Distortions – The market-based U.S. health care system has worked well over time, but more can be done to help the market work even better. Addressing distortions in the market – like the rapidly growing 340B program, or the risk adjuster for commercial insurance that does not account for prescription drug costs – would help preserve the safety net, revive the health care market and improve affordable access to medicines for patients.

The platform can be viewed online here: http://phrma.org/sites/default/files/policy-solutions.pdf.

About PhRMA

The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier, and more productive lives. Since 2000, PhRMA member companies have invested more than $600 billion in the search for new treatments and cures, including an estimated $51.2 billion in 2014 alone.


340B Hospital Savings Come at the Expense of Oncology Practices

By Kyle Keeney

Are hospitals fueling drug spending as they buy up oncology practices? This important question is the focus of a recent Modern Healthcare article. A new analysis of private insurance claims indicates that the answer is yes.

What is missing from the article is context around why so many oncology practices are being bought out by hospitals in the first place. The federal 340B drug pricing program is one of the primary drivers behind this industry-wide shift.

Under 340B, drug manufacturers are required to provide outpatient medicines to eligible health care facilities at significantly discounted rates. Hospital systems can participate in the program, while oncology practices cannot.

Access to 340B gives hospitals a critical advantage over the independent and community-based oncology practices that have no choice but to pay market prices for the prescription medicines their patients need to survive.

The cost-savings and profits that hospitals reap from 340B come at the expense of cash-strapped oncology practices, which are increasingly being forced to shut their doors or be bought out by large hospital systems.

This is not to say that we should throw out 340B. It serves an important purpose, and has helped many patients access the medications they need to be healthy. But the negative impacts it is having on oncology practices and the cost of health care nationwide warrant a closer look at the program.

Kyle Keeney is executive director of the Kentucky Life Sciences Council.


A generic approach to biosimilar substitution won’t do

This piece originally appeared on Medical News.

In Kentucky you don’t have to look far to find the positive impacts of health care innovation.

From preventative medicines to new cures, advances in medical technology have been the driving force behind significant improvements in patient health. But as new treatment options are introduced to the market, protecting patient safety has never been so important.

This year, the General Assembly is considering legislation that would establish a much-needed framework of regulations for biologics and biosimilars – breakthrough treatments that could help many people living with chronic diseases.

Unlike oral pills or tablets, which are made from chemically derived ingredients, biologics are complex treatments manufactured from living organisms – cells programmed to produce a desired therapeutic substance in a highly controlled, sterile environment.

While drug manufacturers are able to create chemically identical copies of pharmaceutical medicines such as oral pills – think generic versions of brand name drugs – the same isn’t true for biologics because they are made from living materials that cannot be perfectly duplicated.

Drug manufacturers can, however, create a version of a biologic that is so close to the original medicine it may be deemed a biosimilar. This could benefit many patients with chronic diseases, as biosimilars are expected to cost significantly less than biologics.

SB 134, in its originally intended form, would establish much-needed guidelines for substituting an interchangeable biosimilar to ensure patient safety. This includes ensuring that substitution would occur only when the FDA has designated a biosimilar as interchangeable; that the prescribing physician would be able to prevent substitution if he or she feels it is not in the patient’s best interest; that pharmacists would be required to communicate what product was dispensed with the prescribing physician; that the patient, or the patient’s authorized representative, would, at a minimum, be notified of the substitution; and that the pharmacist and the physician would keep records of the substitution.

Given the complex nature of biologics and the challenging medical conditions they treat, these are commonsense guidelines to ensure that doctors, patients and pharmacists are all informed about the medications that are prescribed and ultimately dispensed to the patient.

Biologic medicines are an important new tool in treating and curing disease. Biosimilars are also important for providing different and sometimes less expensive options for treatment.

But let’s be clear. Patient safety and ensuring physician involvement is far more important than helping the insurance company’s bottom line.

Legislators should pass SB 134 as it was originally intended. Common sense dictates that we make sure physicians are informed about what products their patients are using to treat their life threatening and chronic illnesses.

Kyle Keeney is the Founder and Executive Director of the Kentucky Life Sciences Council.


Biosimilars: A Cost-Effective Treatment Option for Kentuckians with Chronic Diseases

In Kentucky, you don’t have to look far to see medical innovation in action. Innovation in the health care industry has helped to discover new cures and treatments, and ultimately, save lives.

As new and improved medicines are introduced to the market, patient safety has never been so critical.

This year, Kentucky’s General Assembly is poised to consider legislation that would establish a much-needed framework of regulations for biosimilars to ensure patient safety as these new medicines become available.

A biosimilar is a biologic that, as the name suggests, is highly similar to another biologic drug already approved by the FDA.

Biologics are medicines made by or from living cells though highly complex manufacturing processes. They are used to prevent, treat, diagnosis or cure a variety of serious illnesses including cancer, chronic kidney disease and rheumatoid arthritis.

The interchangeable biosimilars are sometimes a much more cost-effective treatment option than biologics for Kentuckians living with chronic diseases. However, Kentucky does not currently have sufficient measures in place to protect patient safety when a pharmacist feels that dispensing a biosimilar is in a patient’s best interest.

Kentucky should consider legislation that would allow for substitution of interchangeable biosimilars but also require communication between the pharmacist and prescribing physician on which product is dispensed. This will ensure patient safety, transparency and accurate patient records are maintained.

Kyle Keeney, Executive Director of the Kentucky Life Sciences Council


2016 Cap the Copay Bill Will Ensure Kentuckians Have Access to Life-Saving Medications

Access to coverage has expanded under the Affordable Care Act, but many Kentuckians are still struggling to afford the treatments they need to stay healthy.

This year’s Cap the Copay bill will be updated to address fiscal concerns raised by some health plans and other organizations. But the original intent of the legislation remains the same: creating coverage options that better meet the needs of Kentuckians who depend on prescription medications.

Under the current setup, insurers often place some life-saving medications on specialty tiers – a practice called “co-insurance.” Doing so can unfairly burdens patients with excessive and unexpected out-of-pocket costs which may put medications financially out of reach.

The new Cap the Copay legislation would provide Kentuckians a much needed choice when picking their health so that they are offered more reasonable copays for the medications prescribed by their doctors.

Additionally, the 2016 bill will:

  • Require 25 percent of plans per metal tier (Silver, Gold and Platinum) – or the equivalent tiers for a private/employer plan – to offer only copays for prescription medications and to cap these copays at one-twelfth of the plan’s annual out-of-pocket maximum cost. This means the cap would be one-twelfth of the annual out-of-pocket maximum per prescription.
  • Require at least one plan per metal tier to offer only copays for prescription medications. These copays would be capped at one-twelfth of the plan’s out-of-pocket maximum. Prescription medications will not be subject to a deductible.
  • Exclude all Bronze plans from these requirements. The legislation only impacts Silver-tier plans and above.

Kentuckians living with chronic diseases should not have to choose between paying for a life-saving medication and having enough money to cover groceries, gas and bills each month.

People purchase insurance with the assumption that it will provide reasonable coverage for the treatments they need. If passed, the 2016 Cap the Copay bill will ensure that this is really the case.

Kyle Keeney, Executive Director of the Kentucky Life Sciences Council


Washington Update

Lawmakers wrapped up 2015 with a flurry of legislative accomplishments. Legislators successfully passed a measure to fund the federal government through the remainder of Fiscal Year 2016 (FY16). Paired with the spending bill, Congress approved legislation renewing a host of expired tax extenders, and made a handful of those provisions permanent. Lawmakers also passed a multi-year Highway Bill that reauthorizes surface transportation programs for five years. December saw Congress delay several taxes related to the Affordable Care Act (ACA), reform cybersecurity laws, and pass resolutions condemning the Administration’s new carbon rules.

CONGRESSIONAL OUTLOOK FOR JANUARY AND 2016
Legislators effectively cleared the decks in December. The passage of several landmark pieces of legislation in 2015 allows Congress to enter 2016 with a relatively light agenda of must-do items.

The top priority for both chambers will be turning to the appropriations process for Fiscal Year 2017. The two-year budget deal that passed in October established the top line spending numbers for FY17, allowing appropriators to immediately begin work on the twelve annual spending bills. Both House Speaker Paul Ryan (R-WI) and Senate Majority Leader Mitch McConnell (R-KY) have vowed to return their chambers to regular order, with an orderly and timely appropriations process key to that goal. The ambitious aim of passing each individual appropriations bill across the House and Senate floor combined with the shortened summer session due to the earlier party conventions will lead to an aggressive schedule by the Appropriations Committees on both sides of the Capitol, with spending bills possibly hitting the House floor as early as March.

In the Senate, lawmakers are expected to turn to the customs bill conference report shortly after returning from the holiday break on January 11. The measure, which contains a range of provisions strengthening customs enforcement, passed the House in December. The House is expected to take up a legal reform bill and the Senate’s amended reconciliation bill when the chamber reconvenes on January 5.

January will also include President Obama’s last State of the Union address, which is scheduled for January 12. In his address, the President is expected to lay out his congressional agenda for his final year in office. The parties will also hold their planning retreats in January.

More broadly, 2016 is likely to be defined by election year politics, with the presidential campaign dominating the news cycle and influencing the congressional agenda. Four sitting Senators are seeking their party’s nomination (three Republicans, one Democrat). Additionally, Speaker Ryan has vowed to present an alternative for voters by developing a positive, message-driven GOP agenda, including renewed efforts on international tax reform.

ISSUE―GOVERNMENT FUNDING
Prior to the holidays, Congress successfully extended funding for the federal government through FY16 and took a step closer to sending the President reconciliation legislation that would repeal large parts of the ACA.

Budget and Government Funding
Congress approved an omnibus spending package in December renewing government funding through the end of September 2016. The legislation came after months of negotiations and the October two-year budget deal that increased spending caps on both domestic and defense spending for FY16 and FY17.

Final passage of the $1.1 trillion omnibus came after two months of intense negotiations. The bipartisan bill also included several policy changes. While Republicans pushed for a slew of policy riders, they walked away with fewer victories that they would have liked but touted the inclusion of provisions lifting the federal prohibition on exporting oil, reforms to the Visa Waiver Program, and pared back funding for the Environmental Protection Agency (EPA) as legislative victories. Democrats managed to prevent GOP attempts to include riders that would have defunded Planned Parenthood and imposed stricter controls on Syrian refugees entering the country, among many others.

The omnibus drew criticism from both Tea Party-aligned Republicans and progressive Democrats. Despite concerns from the left and right flanks, both chambers passed the legislation on a strong bipartisan vote. The bill was signed into law by the President on December 18.

Reconciliation and ACA Repeal
On December 3, the Senate approved a House-passed reconciliation package to repeal key portions of the ACA, including a rollback of the employer and individual mandates and repeal of federal subsidies for health insurance. The bill also defunds Planned Parenthood. Under reconciliation rules, the bill only needed a simple majority to pass the chamber, allowing it to avoid a Democratic filibuster. The final legislation passed on a vote of 52-47. The House will need to approve the Senate changes to the original measure. A vote on the amended legislation is expected to occur during the first week in January.

The bill’s passage will fulfill the GOP pledge to repeal President Obama’s signature legislative achievement. As expected, the White House has indicated that the President will veto the measure, and Republicans will not have the votes needed to override a veto.

ISSUE―TRANSPORTATION
Congress passed a multi-year transportation bill in December as well as legislation reforming the Surface Transportation Board. Transportation leaders failed to bring forth an FAA reauthorization bill, but promised to return to the issue in 2016.

FAST Act
On December 1, legislators negotiating a long-term Highway Bill released the conference report for the Fixing America’s Surface Transportation (FAST) Act. The legislation authorizes $305 billion over five years to be spent on highway, transit, and rail projects. The FAST Act included a wide range of pay-fors including some controversial provisions, such as sales from the strategic oil reserves and fees charged to banks by the Federal Reserve. Both houses of Congress passed the measure with significant bipartisan support, and the President signed the FAST Act on December 4, making it the first multi-year transportation bill signed into law in nearly a decade.

Surface Transportation Board Reform
In December, Congress approved a bill that would move the Surface Transportation Board (STB) out of the Department of Transportation and establish it as an independent agency. The legislation also expands STB membership from three to five. The new agency will continue to have oversight of proposed railroad mergers, rail rates, and services. The bill passed without significant opposition in either chamber and was signed into law on December 18.

FAA Reauthorization
Reauthorization of the Federal Aviation Administration (FAA) will be pushed to 2016. House Transportation and Infrastructure Chairman Bill Shuster (R-PA) and Peter DeFazio (D-OR) both indicated that a proposal to reauthorize and revamp the FAA will not be unveiled until the new year, citing the tight December congressional agenda as the reason for the delay. The FAA is currently authorized through March 2016.

ISSUE―TAX
Republican and Democratic tax leaders came to an agreement on a landmark tax extenders package in December.

Tax Extenders
On December 18, Congress passed legislation known as the Protecting Americans from Tax Hikes (PATH) Act, which will extend the package of personal and corporate tax provisions known as tax extenders. The $680 billion bill came together after several months of negotiations and included both permanent and multi-year extensions of the expired extenders, including:

Permanent Extensions
● Research & Development Tax Credit

● Section 179 expensing

● State and local sales tax deductions

● Active finance exception

● Earned Income Tax Credit

● Child Tax Credit

● American Opportunity Tax Credit

Multi-Year Extensions
● Bonus depreciation (phased out after five years)

● Work Opportunity Tax Credit (five years)

● Controlled-foreign corporation look-through rule (five years)

● Wind and Solar Production Tax Credits (five years)

● Railroad Track Maintenance Credit (two years)
The remainder of the some fifty extenders were included in the bill with extensions for 2015 retroactively and 2016 prospectively.

The legislation passed with the omnibus spending package. During debate over the measure, Republican deficit hawks and Democrats criticized the legislation due to the bill’s lack of pay-fors to offset the tax breaks. Despite opposition, the measure easily passed and was signed into law by the President on December 18.

Tax Reform
While debate over a comprehensive rewrite of the tax code is likely to continue in the new year, both House Speaker Ryan and Leader McConnell said that it is unlikely that a tax reform bill will become law in 2016. Speaker Ryan stated that a tax overhaul will likely have to wait until President Obama leaves the White House. More broadly, continuing disagreements between the parties in Congress over whether tax reform should be deficit neutral or produce new government revenue is also likely to stall reform efforts. Nevertheless, legislators are expected to continue debating tax reform ideas throughout 2016. One area that could receive increased attention is international tax reform, which will likely continue to be in the spotlight as more U.S. corporations pursue growth strategies that rely on foreign acquisitions and tax inversions. The House and Senate tax-writing committees are expected to continue efforts to educate members on tax reform, vet proposals from outside groups, and put forward new reform ideas in preparation for 2017.

ISSUE―HEALTH
The omnibus legislation included several ACA-related provisions, while the Administration also released updated enrollment figures.

ACA Tax Delays
Republicans scored major victories when legislators included in the omnibus spending package delays of several ACA-related taxes. Excise taxes on high cost health plans (also known as the Cadillac tax) and medical device companies will be delayed for two years. The health insurance tax (HIT) will be delayed for one year. The delays come as a significant blow to the White House and the Department of Health and Human Services (HHS), which was relying on the revenue generated from the taxes to fund ACA programs. However, these delays enjoyed bipartisan support among congressional members.

ACA Enrollment
In December, HHS released updated ACA enrollment figures. The Department announced that 2.8 million Americans have selected plans using HealthCare.Gov, including one million new enrollees. The figures only include the 38 states that do not run a state-based exchange. The Administration is hoping to enroll between eleven and fourteen million before the open enrollment period ends on January 31.

Agency Funding
The omnibus spending bill included a funding boost for the National Institute of Health (NIH). The legislation appropriates $32 billion to the NIH budget, an increase of $2 billion from FY15. Funding for the Food and Drug Administration will increase by $133 million to an FY16 budget of $2.7 billion. The Centers for Disease Control and Prevention will receive $160 million, a slight increase from last year.

ISSUE―CYBERSECURITY
In December, cybersecurity legislation advanced and discussions continued over ways to combat terrorists’ use of technology.

Cybersecurity Information Sharing Act
Negotiators included the final Cybersecurity Information Sharing Act (CISA) in the omnibus. CISA provides companies with liability protections for sharing threat data with federal agencies. Both chambers passed the bill earlier this year, and intelligence leaders were working to reconcile the differences. Passage of CISA was considered a huge legislative victory for the business community, including cable, telecommunications, and a myriad of other companies concerned with the growing threat of hacking attacks.

Encryption and Social Media Debate
While CISA advanced, efforts to increase cybersecurity to prevent terrorist activities continue. Following the November 13 terrorist attacks in Paris by forces loyal to the Islamic State of Iraq and the Levant (ISIL), lawmakers and analysts renewed discussions on terrorists’ use of digital encryption and social media platforms to plan and execute attacks. Several public officials have called on Congress to improve agencies’ abilities to crack encrypted messages of suspected terrorists. Additionally, Senate Intelligence Committee Chairman Richard Burr (R-NC) and Ranking Member Dianne Feinstein (D-CA) introduced legislation this month that would require social media companies to report terrorist content on their sites, a bill that many in the tech sector oppose.

Internet Tax Freedom Act
In January, lawmakers will move forward on a customs bill conference report that includes a permanent extension of the Internet Tax Freedom Act (ITFA), a moratorium on taxation of Internet access. ITFA enjoys bipartisan support, but has become mired in a larger debate over the Marketplace Fairness Act (MFA), which would allow for broader collection of Internet sales taxes. Supporters of MFA have fought to tie the fate of ITFA to MFA and have vowed to strip out the ITFA provisions from the customs bill through a point of order. ITFA supporters would need sixty votes to block these attempts. Both sides believe they have the votes to achieve their conflicting goals.

ISSUE―PATENT REFORM
A deal on patent reform remains elusive heading into 2016. Earlier this year, committees in both the House and Senate previously passed patent reform bills (the Innovation Act and PATENT Act, respectively). However, continued inter-industry disagreement over provisions related to the inter-partes review (IPR) system at the Patent and Trademark Office continues to stand in the way of either chamber passing the legislation. Patent reform leaders have called on the affected industries―biotechnology/pharmaceuticals and technology sectors―to resolve the differences among themselves. Absent an agreement among the various groups pursuing reform, a rewrite of patent law will have an uphill climb in 2016.

ISSUE―ENERGY
In December, Congress passed S.J.Res. 23 and S.J.Res. 24, resolutions that would curb the EPA rules placing new limits on carbon emissions from power plants. Republicans used the Congressional Review Act (CRA) to pass the measures. CRA rules allow the Senate to pass legislation with a simple majority; however, CRA resolutions are subject to a veto, and President Obama has pledged to reject the Republican legislation.

ISSUE―FOREIGN POLICY
Debate over how to best defeat the growing threat of ISIS continued in December. Leader McConnell stated this month that a resolution of Authorization for Use of Military Force (AUMF) is not likely to pass through Congress in the foreseeable future. The White House has long-requested lawmakers to approve an AUMF for use against ISIS, but Congress has failed to deliver. Leader McConnell pointed to Democrats as the chief obstacle, stating that they would require an AUMF to be too restrictive to accomplish the mission of eliminated ISIS and its affiliates.

OTHER ISSUES
Developments on several other issues occurred during the productive December work weeks.

Federal Interest Rates
For the first time in nearly a decade, the Federal Reserve (Fed) announced that it would raise interest rates. The Fed has maintained a zero interest rate since the height of the Great Recession. Fears over sluggish inflation led Fed Chair Janet Yellen to call for a .25% increase. While many economic analysts have lauded the move as necessary to continue the economy’s slow but steady growth rate, others have expressed concerns that the rate hike could lead to more volatile markets, which Democrats fear may endanger Hillary Clinton’s campaign for the presidency. The Fed has not ruled out future rate increases, but the bank pledged to move at a measured pace.

Export-Import Bank
In a huge victory for supporters, the Export-Import Bank was reauthorized through a provision included in the FAST Act transportation bill. The Bank, which helps finance American exports, was forced to shutter operations in July when Congress failed to renew its charter. Conservative Republicans oppose the Bank, but negotiators agreed to a four year reauthorization, allowing the Bank to remain active through September 2019.

TSCA Modernization
The Toxic Substances Control Act (TSCA) successfully passed before Congress adjourned for its holiday recess. The bill updates the original 1976 TSCA law, giving the EPA new powers to evaluate and regulate chemical substances while preventing states from crafting their own patchwork of rules.

Trade
Both Speaker Ryan and Leader McConnell expressed doubt regarding the prospects of Congress approving the Trans-Pacific Partnership (TPP) in the coming year. The White House presented TPP, a multi-lateral free trade agreement among twelve Pacific Rim countries, to lawmakers earlier in the year, but bipartisan opposition to the deal has stalled consideration of the agreement. Speaker Ryan and Leader McConnell indicated that while there remains a chance for TPP to be addressed in 2016, final consideration of the pact may be pushed until President Obama’s successor takes office.

While TPP is likely stalled for now, the Senate is expected to vote on another trade-related item, the customs bill conference report, when they return in January, clearing it for the President’s signature.