Senate Finance Committee Chairman Max Baucus (D-MT) received good news from the Congressional Budget Office (CBO) last week regarding the cost of his health care reform legislation. The Senate Finance Committee spent two weeks considering amendments to the "America's Healthy Future Act," but Chairman Baucus agreed not to call for a final committee vote on the bill until after CBO had scored the package as amended. On October 7, CBO said the Senate Finance bill as amended would have a total cost of $829 billion over 10 years and would result in an $81 billion deficit reduction; this score is based on the conceptual language. The committee will reconvene to vote on the amended mark on Tuesday, October 13.

Drug and device companies are carefully tracking "annual fees" or excise taxes that have been included in Chairman Baucus's bill in order to help offset the cost of health care reform. As currently drafted, beginning in 2010, the Senate Finance bill would impose an aggregate annual fee of $2.3 billion on manufacturers and importers of branded drugs. It would also impose an aggregate annual $4 billion fee on manufacturers and importers of medical devices offered for sale in the United States. The fee would not be applied to Class I devices or to Class II devices sold at retail for up to $100 per unit. These fees are based on a percentage of what Chairman Baucus has estimated that these industries stand to gain in revenue from the expansion of health care coverage envisioned by the bill.

Even before the Finance Committee has completed its work, Democratic staff members are working to merge the Senate Finance bill with the Senate Health, Education, Labor and Pensions (HELP) bill that passed out of Committee in July. The Senate hopes to have a merged health care reform bill on the floor in the coming weeks.

On the House side, Speaker Nancy Pelosi (D-CA) is facing pressure from various factions on how to proceed with health care reform. A provision to create a National Medical Device Registry remains in the House bill post markup, despite opposition from AdvaMed due to its sweeping impact and redundancy with existing authorities. Last week, 69 Members signed a letter to Pelosi in favor of keeping a provision in the bill allowing for Part D drug price negotiations. This House provision runs counter to the deal negotiated between PhRMA, Baucus and the White House. House leadership is also weighing whether "fees" or taxes on industry, like those imposed by the Senate Finance bill, should replace the pay roll taxes currently proposed to pay for the House bill.