BIO’s fall Congressional preview

The summer calm is grinding to a halt as members of Congress have returned to D.C. for what is sure to be a busy legislative sprint that could potentially impact all sectors of the biotech industry.

The State of Play

The House adjourned two weeks ago after laying the groundwork (on a party-line vote) for action this fall on a $3.5 trillion budget package. The Democrats intend to use this package to pass (by a simple majority) many key priorities on health care and climate change. With the framework set, committees will draft their sections of the bill and report them to the Budget Committee. Once the Budget Committee receives these sections, it will combine them into one bill, which is expected to come to the floor by late September or October.

House Democrats remain divided on the best course of action for the bipartisan infrastructure deal and the budget reconciliation package. Moderates insisted the budget package be a separate vote from infrastructure package, while progressives demanded both the infrastructure package and the budget rule be passed at the same time.

Many House members are already concerned about the package. Of note, Rep. Scott Peters (D-CA) has long raised concerns that the infrastructure package does not lower drug costs in a way that will protect innovation and bring significant savings to patients at the pharmacy counter. We believe House Democrats will cut-and-paste H.R. 3 into their reconciliation package—which we know is a jobs, innovation and hope killer.

In the Senate, Finance Committee Chairman Ron Wyden (D-OR) continues to work behind the scenes to find consensus on both the reconciliation package and his drug pricing proposals. As a reminder, budget reconciliation is a tool used in the Senate so legislation can pass with 51 votes and avoid the typical 60-vote threshold. With an evenly divided Senate (50-50), Chairman Wyden and Majority Leader Chuck Schumer (D-NY) will turn over every rock to find the votes necessary.

We expect the Senate reconciliation to differ from the House package on some issues in a major way. Senate moderates are uneasy with the relative size of the package at $3.5 trillion. We expect drug-pricing provisions to differ as well, though staff continues to work around the clock and things are changing constantly. The main sticking point will be how Wyden deals with Medicare “negotiation.” But let's be clear about H.R. 3. This is pure price setting, not negotiation. And we know what price setting means: patients having far less access to new cures and therapies.

Strap in for a bumpy fall…

Appropriations

The House and Senate have set themselves up for a nearly impossible September — and potentially an impossible October, November and December. The fiscal year ends on Sept. 30, and even though the House has passed multiple minibus appropriations bills, the Senate is not keeping pace. With the infrastructure debate likely to take up most of the floor time until the end of the fiscal year, we expect Congress to pass a continuing resolution to fund the government at current levels until at least December.

A recent agreement in the House set up a Sept. 27 deadline for passage of an infrastructure reconciliation bill. With the debt ceiling looming over everything, the Treasury Department is already using its "extraordinary measures" to avoid default, but those will likely be exhausted in October or November. The debt ceiling deadline is a natural timeline for an omnibus. But disagreements in the Senate over the appropriations amendments process has frozen the chamber, and the debt ceiling may need to be extended — at least temporarily — on a continuing-resolution vote. In short, there's an incredible amount of legislative language to be written in the next month.

Intellectual Property

Look for continued efforts to weaken IP rights in the misguided belief this will improve access to treatments without impairing innovation. In fact, just the opposite is true. Proposals to seize IP rights by “marching in” — effectively exercising eminent domain over patents — would kill innovation.

“Clear and enforceable patent rights are the key to this success," BIO stated in comments to the National Institute of Standards and Technology. "Investors evaluate the strength of intellectual property rights before investing in a pre-revenue company proposing to do important but costly and high-risk research…. This robust investment would not be possible without secure intellectual property rights.”

The Biden administration has supported efforts to waive the WTO TRIPS agreement — but "intellectual property rights have not been, and will not be, a barrier to the development and distribution of COVID vaccines globally," as BIO's Dr. Michelle McMurry-Heath has pointed out. BIO led a coalition of 300 CEOs of global biotechnology companies and associations in reiterating their commitment to work with other stakeholders — health care providers, governments, multilateral organizations, nongovernmental donor organizations — to ensure COVID vaccines and treatments get to patients in the world who need them.

The Biden administration is already pursuing many of the strategies outlined in BIO's proposed SHARE Program — and they are yielding important results.

Agriculture and Environment

Senate Majority Leader Chuck Schumer (D-NY) has said the dual infrastructure bills would cumulatively curb greenhouse gas emissions 45% by 2030. However, Speaker Nancy Pelosi (D-CA) noted the reconciliation bill will “address the climate crisis in a way that was not addressed at all in the infrastructure bill, very minor, just electrification—electrification is important, but it’s not the totality of what we have to do, and we may want to do more.” How these bills achieve these reductions will be part of the negotiations this fall.

Overall, the budget resolution would give the Agriculture Committee $135 billion over the next 10 years. The topline summary notes the reconciliation bill will make investments in climate-smart agriculture and forest management investments for farmers and rural communities.

The package will also include tax credits to incentivize the production of clean electricity, clean transportation fuels, and energy efficiency. Whether these incentives are closer to Senate Finance Committee Chairman Ron Wyden’s Clean Energy for America Act (S. 1298) or Chairman of House Ways & Means Subcommittee on Select Revenue Measures Mike Thompson’s (D-CA) Growing Renewable Energy and Efficiency Now (GREEN) Act (H.R. 848) will be a major issue that needs to be resolved.

BIO will continue advocating for Congress to incentivize the use of biotechnology in order to achieve the emissions reduction — such as through a tax credit for sustainable aviation fuel (SAF) and the use of carbon sequestration and carbon markets.