No Repeal of BPCIA Legislation in New Senate Healthcare Bill

The Senate today revealed its long-anticipated healthcare reform bill, The Better Care Reconciliation Act of 2017. The text of the legislation maintains much of the American Health Care Act (AHCA), which was narrowly passed by the House earlier this year, though the Senate’s legislation makes some adjustments to the AHCA.

A primary difference between the 2 bills is the timeline for ending the federal expansion of Medicaid, provided for under the Affordable Care Act (ACA). While the House bill sought to end the expansion in 2020, the Senate bill’s timeline would terminate the program in 2024. The Senate bill also cuts the Medicaid program by allocating less federal funding to states, and allows states to impose work requirements on Medicaid recipients.

The bills also differ in the manner in which tax credits will be allocated to individuals so that they can purchase health insurance in the individual marketplace. Under the ACA, subsidies were calculated based upon the cost of healthcare in the local market as well as an individual’s purchasing power within that market, and the House bill sought to change that practice by providing tax credits on the basis of age. In attempting to provide a more equitable approach to older Americans whose healthcare costs would have risen substantially under such an arrangement, the Senate legislation seeks to reconcile the 2 approaches by providing tax credits on the basis of income.

Like the House bill, the Senate legislation leaves some important features of the ACA intact—the Better Care Reconciliation Act includes no language repealing or replacing the ACA’s provisions for biosimilar drugs. While many in the biopharmaceutical industry wondered whether the Senate could single out biologics under this new legislation, the Biologics Price Competition and Innovation Act—more commonly known as the BPCIA—which was passed into law as part of the ACA, is expected to remain the law of the land.

With a vote on the bill expected as early as next week, the non-partisan Congressional Budget Office (CBO) will need to move swiftly to score the Senate bill. Senate Majority Leader Mitch McConnell (R-KY) said that this scoring period, ahead of a pre-recess vote, would provide “ample time to analyze, discuss, and provide thoughts before legislation comes to the floor. I hope every Senator takes that opportunity.”

The CBO previously reported that the House bill would reduce direct spending by $1.1 billion, and would increase the number of uninsured by 14 million in 2018 (and by 23 million in 2026). The greatest proportion of savings to the federal government, the CBO said, would derive from reductions to Medicaid and from the replacement of ACA subsidies with tax credits.

Within hours of the bill’s introduction, 4 of McConnell’s fellow Republicans had already denounced the proposed legislation, saying that it did not take enough steps to repeal the ACA. Rand Paul of Kentucky, Ted Cruz of Texas, Ron Johnson of Wisconsin, and Mike Lee of Utah all announced that they will not support the bill as it is currently written, though they remain willing to negotiate changes to the proposed legislation. With Democrats expected to oppose the act, McConnell can only afford to lose 2 Republican votes and still pass the bill.