Brainstorm Health: Gym Tax Deduction, Zogenix Stock, J&J Verdict

On Thursday, the powerful House Ways and Means Committee advanced legislation that would let (some) Americans write off (certain) fitness expenses as a tax deduction. The bill, dubbed the Personal Health Investment Today, or PHIT Act, is enthusiastically backed by health care companies and nonprofits like Fitbit, the American Heart Association, Nike, the Sports and Fitness Association, and others; it passed through the committee on a bipartisan 28-7 vote.

If signed into law, the PHIT Act would amount to a tax break for gym memberships, fitness classes, and the purchase of certain “safety equipment” related to fitness (it’s unclear exactly what kind of equipment and activity would qualify under the legislation’s purview—although certain things like horseback riding and golfing wouldn’t pass muster). Just how much of a break might one get? Qualified expenses couldn’t exceed $500 for an individual or $1,000 for a joint household return.

It’s an open question whether or not the proposal will ultimately pass. But it’s already drawing some raised eyebrows from critics who say it would essentially benefit wealthy (and relatively healthy) people who already go to a gym or take fitness classes while doing little to incentivize the vast majority of Americans to exercise more.

Why is that? For one thing, the measures are centered around health savings accounts (HSAs) and flexible savings accounts (FSAs)—financial tools that are ostensibly meant to pay for out-of-pocket medical costs and that many taxpayers don’t necessarily have access to.

But the deductions would also have to be itemized under the existing measure. For context, less than a third of all taxpaying households itemize, and they skew heavily toward the wealthiest Americans. And while preventive wellness programs have become a regular cottage industry in the public health sphere, the evidence supporting their overall effectiveness is, at this point, still decidedly mixed.

Read on for the day’s news, and have a wonderful weekend.

DIGITAL HEALTH

CMS rolls out digital health proposals. The Centers for Medicare & Medicaid Services (CMS) has released new proposed rules that, in part, aim to boost the role of telemedicine in health care by shifting the way that doctors are reimbursed for such services. "Under this proposal, Medicare will start paying for virtual check-ins, meaning patients can connect with their doctor by phone or video chat," said CMS administrator Seema Verma during a conference call. "Many times this type of check-in will resolve patient concerns in a convenient manner that gets them the care that they need and avoids unnecessary cost to the system. This is a big issue for our elderly and disabled populations where transportation can be a burden to care as well as to caregivers. We’re not intending to replace office visits but rather to augment them and provide new access points for patients." (MobiHealthNews)

INDICATIONS

Zogenix soars on epilepsy drug data. Mere weeks after the Food and Drug Administration (FDA) approved the first-ever cannabis based therapy in the U.S., to treat a pair of rare childhood epilepsy disorders, biotech Zogenix announced that its own experimental drug for such conditions met its key goals in a late-stage trial. Zogenix stock is up more than 33% following the announcement. (Reuters)

Johnson & Johnson ordered to pay $4.7 billion. Drug giant Johnson & Johnson was delivered a $4.7 billion verdict by a Missouri jury on Thursday in its ongoing, class action battle against plaintiffs who say the firm's talc-based products contained asbestos and may have cause ovarian cancer. That's the largest verdict that J&J has faced in a long-running legal saga; the company immediately said it would be appealing the decision. (CNN)

THE BIG PICTURE

The opioid crisis may be on the decline. Americans' abuse of opioid painkillers may finally be receding, according to a new report from insurance federation Blue Cross Blue Shield (BCBS), which says that it's logged a 5% decline in opioid abuse diagnoses in the past year. "The number of BCBS members filling opioid prescriptions at all has dropped from about five in 20 members in 2013 to about three in 20 members in 2017. The number of prescriptions they are using has dropped by about 29% in the same period," writes my colleague Lucas Laursen. (Fortune)

REQUIRED READING

Is Friday the 13th Unlucky for Wall Street? Here Are the Numbers, by Chris Morris

raceAhead: Facebook's Latest Diversity Report, by Ellen McGirt

California's Wildfires Were Terrible Last Year. Will This Year Be Worse? by Bloomberg

Jeff Bezos May Charge $200,000 or More to Fly You to Outer Space, by Chris Morris