Pharma's silver lining: A tax break
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WASHINGTON WATCH
Threats to drugmakers have come fast and furious during President Donald Trump's first five months in office, from Health Secretary Robert F. Kennedy Jr.'s broadsides about drug safety to Trump's call for lower prices and tariffs.
But at least pharmaceutical companies can look forward to a big tax break.
How so? That's if Republicans in Congress can coalesce around language in the megabill that would allow drugmakers and other companies that invest heavily in research and development to deduct R&D costs immediately.
The Senate Finance Committee's version of the megabill — which aims to extend Trump's 2017 tax cuts — would reverse language in the 2017 law and allow firms to permanently take a deduction in the first year they spend on R&D.
The 2017 law required them to amortize domestic expenses over five years and foreign expenses over 15.
Drugmakers have lobbied ever since to revert that change. The version of the megabill the House passed last month would also allow immediate expensing but only for five years.
The Biotechnology Innovation Organization, a lobby for pharmaceutical companies, has long argued that the 2017 tax change has curtailed investment in drugs.
What's next? The Senate has to pass its version of the bill and then the House and Senate must agree to the text. But the inclusion of immediate expensing in both versions bodes well for drugmakers.
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AROUND THE NATION
Dr. Mark Ghaly, who helped steer California through the pandemic as head of the state's Health and Human Services Agency, is joining a startup that's using artificial intelligence to cut health care costs for the Golden State's Medi-Cal program for low-income people, our Rachel Bluth reports from Sacramento.
Why it matters: Gov. Gavin Newsom, a Democrat, is looking for ways to reduce Medi-Cal's multibillion-dollar deficit.
Ghaly will join Pair Team as a strategic adviser. Pair Team provides enhanced care management under CalAIM — a Medi-Cal reform initiative that Ghaly helped shape to include nonmedical benefits for patients with complex medical needs. Pair Team also acts as an intermediary, connecting health care plans with nonprofits and patients.
The company employs community health care workers who serve as case managers and nurse practitioners, nurses and social workers who provide an array of services, including primary care, mental health care and chronic care management.
The company is also a hub for nonprofits that provide nonmedical support such as food, housing and transportation. Since many of the groups aren't set up to bill Medi-Cal plans directly, they're paid through Pair Team.
What's next? The company is eager to expand beyond California.
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