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Senate Democrats have reached a deal to extend the solvency of Medicare by closing a tax loophole frequently used by law firms and other partnerships, adding another leg to President Joe Biden’s revised economic agenda.
The text of the legislation is to be submitted in the coming days to the top Senate rules official to make sure it complies with the chamber’s budget rules. If it does, then Democrats can pass the provision with just 50 votes and skirt a filibuster by Republicans.
The Senate Democrats’ agreement to require so-called pass-through businesses to pay a 3.8% health surcharge on some income follows a separate deal on prescription drug pricing, announced on Wednesday. The two deals will form key parts of a budget bill embodying pieces of Biden’s long-stalled agenda that Democrats hope to pass without Republican support by August recess.
Under current law, the Medicare hospital trust fund is to become insolvent by 2028. The deal would provide funding to extend it to 2031, a person familiar with the talks said. The $200 billion in additional funding is paid for by counting distributed profits in pass-through entities as subject to the 3.8% tax instituted by the Obamacare law—but only for individual earners making above $400,000 per year.
The Medicare provision is the result of secretive talks between Senate Majority Leader Chuck Schumer (D-N.Y.) and Sen. Joe Manchin (D-W.Va.). In December, Manchin withdrew support for Biden’s previous long-term agenda. Read more from Erik Wasson.
Also on Lawmakers’ Radars
Data Brokers Vow to Protect Abortion Data, Warren Says: Data brokers SafeGraph and Placer.ai have pledged to permanently stop selling the location data of people who visit abortion clinics, according to a statement from Sen. Elizabeth Warren (D-Mass.). She and 13 of her colleagues criticized the two companies for collecting and selling the cellphone-based location data of people who visit abortion clinics in a May 2022 letter, Airielle Lowe reports.
- Technology giants Apple, Microsoft and Google are also facing questions about whether they’d hand over users’ personal data to authorities pursuing evidence on abortion seekers. They’re now bracing for the multistate legal quagmire governing privacy in a post-Roe world. From map searches to private messages, a trove of data stored by tech firms could be used as a digital breadcrumb trail linking a patient to the termination of a pregnancy. Read more from Dina Bass and Mark Bergen.
- Meanwhile, North Dakota’s only abortion clinic sued the state on Thursday, seeking to block its enforcement of a law banning most abortions. The action is the latest in a series of lawsuits alleging that a state constitution protects abortion access in the absence of a federal constitutional right. Abortion providers also have filed suits in 11 other states and have won orders temporarily blocking bans in Utah, Kentucky, Louisiana, and Florida. Read more from Mary Anne Pazanowski.
- Corporate executives and boards of directors must now plan for what consistent action they will take on reproductive health rights across their business, including responding to thorny investor questions about benefits and political spending, according to environmental, social, and governance consultants, Clara Hudson reports.
- Related: EU Lawmakers Slam US Ruling Overturning Abortion Rights
Wyden Posts Interim Report on Pharma Tax Probe: Senate Finance Chairman Ron Wyden (D-Ore.) released a report on the tax practices of big pharmaceutical companies. The 2017 Republican tax revamp signed by Donald Trump “made it easier for these corporations to use subsidiaries in offshore tax havens to avoid billions of dollars in taxes on U.S. drug sales” and “pay tax rates that are a fraction of that paid by the average working American family,” the interim report says. Alisa Parenti has more.
What Else to Know Today
Pfizer Pill Prescribing Power Spurs Pharmacist Calls to Medicare: The FDA’s decision to let pharmacists prescribe Pfizer’s Paxlovid could be a game-changer in expanding Covid-19 treatment access—but only if pharmacies are adequately paid for their work, trade groups say. Pharmacies say they would be better equipped to handle this new responsibility if Medicare required health plans to pay them for assessing patients and conducting other work needed to dispense the pill. Read more from Celine Castronuovo.
FTC Eyes Old Weapon in PBM Probe: The FTC is mulling the use of a rarely used anti-price discrimination law to potentially crack down on dominant companies’ unfair use of market power. The FTC is ramping up enforcement against illegal bribes and rebate schemes involving pharmacy benefits managers, it announced in an enforcement policy statement. The statement pointed to one of its legal authorities—the Robinson-Patman Act—that could be exercised by the agency. In April, a bipartisan group of 43 House lawmakers sent a letter to the FTC urging it to revisit the law. Read more from Dan Papscun.
- Chronically ill patients are pushing the FTC to incorporate their experiences getting treatment into the agency’s study on the entities that manage prescription drug benefits. Pharmacy benefit managers say their role is to help ensure Americans get effective treatment at the lowest price. But patient advocates say PBMs’ formulary designs and authorization rules have delayed medication access for patients who rely on a specific, specialized drug. Celine Castronuovo has more.
US to Release 144,000 More Doses of Monkeypox Vaccine: The US will make an additional 144,000 doses of Jynneos vaccine available to states and jurisdictions to deal with monkeypox, HHS announced in an emailed release Thursday. The doses will begin shipping on July 11. It comes in addition to 56,000 doses the US made available when it announced its enhanced nationwide vaccine strategy on June 28, Jim Silver reports.
- Meanwhile, Emergent BioSolutions and Ridgeback Biotherapeutics agreed to collaborate to expand the availability of Ebola treatment Ebanga, Silver reports.
Ex-Theranos President Balwani Found Guilty: Ramesh “Sunny” Balwani, the former president of Theranos and ex-boyfriend of its founder Elizabeth Holmes, was found guilty of all charges against him for his role in the collapse of the $9 billion blood-testing startup. The decision Thursday by a jury in federal court in San Jose, California, comes six months after Holmes was convicted of defrauding investors. Read more from Joel Rosenblatt.
- Merck Is Said in Advanced Talks to Acquire Biotech Firm Seagen
- Covid-19 Nursing Home Death Suit Properly Moved to State Court
- UnitedHealthcare Accused of Underpaying Telehealth Providers
- Physicians Scoff at Proposed 4.4% Medicare Payment Cut for 2023
To contact the reporter on this story: Brandon Lee in Washington at email@example.com