Signs of Trouble

The vote had been initially scheduled for Thursday night, but was pushed back to Friday in an attempt to corral enough support for the bill. But the first serious sign of trouble came when the House voted to begin
debate on the health care plan Friday morning, with six Republicans voting no. Lawmakers typically do not break with their party on procedural votes, even if they plan to vote against the underlying legislation. The House went on to spend four hours debating the bill, with time equally divided between Republicans and Democrats. Republicans could only afford defections from 21 members in order to assure passage with the required 216 votes. All Democratic members had planned to vote against the bill. Despite round-the-clock efforts from the White House to sell the bill to Republicans in Congress, President Trump and Speaker of the House Paul Ryan (R-Wis.) were ultimately unsuccessful and agreed to cancel the vote.

Whip List

The exact number of Republicans who remained in opposition to the bill is unknown. During the time
leading up to the cancelled vote, most of the 20 to 30 members affiliated with the Freedom Caucus were still planning on voting no, and more moderate members like Appropriations Chairman Rodney Frelinghuysen (R-N.J.) and co-chairman of the Tuesday Group Charlie Dent (R-Pa.) announced their opposition. Over the weekend, Rep. Ted Poe (R-Texas) resigned from the House Freedom Caucus and urged Members to come together to find solutions to move forward.

What's Next?

Given the failure of the AHCA, House Republican leadership has no Plan B to revive their pledge to
repeal and replace Obamacare. In the Senate, Rand Paul (R-Ky.) and Mike Lee (R-Utah) have said that they will begin working on a full ACA repeal bill that could pass their chamber. Others, like Sens. Chuck Grassley (R-Iowa) and Lindsey Graham (R-S.C.), have advocated for working across the aisle to pass legislation. Senate Minority Leader Chuck Schumer (D-N.Y.) has said that his party would be willing to work with their Republican colleagues as long as the purpose is to improve, and not undermine, the current law. Senate GOP leadership, however, have given no indication of what they plan to do. There is some disagreement about how the outcome of the AHCA will affect another one of the GOP priorities: tax
reform. Both the President and congressional leadership, however, have signaled that reforming the tax code is next on their agenda.

House Passes Accompanying Health Reform Legislation

The House passed two bills last week that were intended to be a part of the GOP health care reform plan to enhance the American Health Care Act (AHCA). H.R. 372, the Competitive Health Insurance Reform Act, would end the exemption for health insurers from federal antitrust laws, and was passed by a vote of 416-7. The 1945 McCarran-Ferguson Act exempted insurers from federal antitrust laws to the extent it is regulated by a state. Republicans supported the bill as a means to increase competition in the health insurance market, while Democrats are in favor of enforcing antitrust regulations should insurers collude to raise rates or engage in other anti-competitive practices. The House also passed legislation that would remove some of the regulations on small businesses providing health insurance to their employees
through association health plans (AHPs). Under the legislation, AHPs would be governed by rules similar to those that apply to employers in the large group market. H.R. 1101, the Small Business Health Fairness Act, passed by a vote of 236-175.

GAO to Report on Orphan Drug Program

The Government Accountability Office (GAO) will examine whether pharmaceutical companies are abusing federal incentives to develop orphan drugs for rare diseases. The report comes at the request of Sens. Chuck Grassley (R-Iowa), Orrin Hatch (R-Utah), and Tom Cotton (R-Ark.), who are concerned that drug manufacturers are misusing the orphan drug designation, which involves tax credits, research and development funding, reduced user fees, and seven years of marketing exclusivity upon entering the market. The high price tags of many orphan drugs have raised concerns about whether the orphan drug status is being misused to maximize profits. The lawmakers have asked for a list of drugs approved or denied orphan status by the Food and Drug Administration (FDA), and whether there is consistency in the
agency’s reviews of the designations. Due to the GAO’s current workload, the agency won’t begin their analysis for several months.

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