Key takeaways

• The final version of the “Tax Cuts and Jobs Act” contains provisions that will impact the healthcare industry in various ways.
• The bill’s steep reduction in the corporate tax rate will have a significant impact on healthcare companies that  principally do business in the United States.  The changes in international taxation will affect pharmaceutical and medical device companies with significant overseas assets and operations.
• The bill will eliminate the “individual mandate,” which is a tax on certain people who do not purchase health insurance.   While the mandate and its repeal have been highly controversial, it is uncertain whether the repeal will have a meaningful impact on the health insurance market. 
• The bill will reduce the tax credit for costs of clinical trials of “orphan drugs” (which treat rare conditions) from 50% to 25%, but maintains other significant incentives that incentivize orphan drug development. The bill will also maintain the medical expense deduction, which was slated for elimination in the House version of the bill, and will expand it for two years.