Water at Forefront of Sacramento Discussions
Political posturing and negotiations over legislation intended to address California’s water needs have begun in earnest in Sarcamento. Earlier this year, Governor Schwarzenegger ordered the Legislature to convene a special session on water. Although an attempt for an agreement was made in the waning days of the regular legislative session, talks have begun with more urgency in the past few weeks.
The Democrats in the Legislature have put together a proposal, SBx7 1, which encompasses both increased enforcement and penalties for unauthorized use of agricultural water, as well as a mechanism to enforce meeting of conservation targets by local water agencies. The initial language for this bill can be found at http://www.leginfo.ca.gov/pub/09-10/bill/sen/sb_0001-0050/sbx7_1_bill_20091023_introduced.pdf.
BIOCOM worked with leadership to address aspects of the bill that did not adequately recognize the unique model of the life sciences industry. Specifically, BIOCOM has secured commitments to include water uses tied to research and development as “process water” (previously it was water “used in production of a product”), which will not be tied to mandatory conservation goals. Further, as a result of these discussions, non-profit research institutes will now be classified as “institutional water users” for purposes of qualifying for certain exemptions, joining schools, hospitals, higher education, courts and churches.
It remains to be seen whether a compromise can be successfully found, as the parties seem to be relatively far apart on some key issues. We are cautiously optimistic something will get done, and will continue to monitor the process to insure the life science industry is not unfairly impacted.
Finance Committee Passes Health Reform Bill with Device Tax
The Senate Committee on Finance passed the America’s Healthy Future Act out of Committee in October, mostly along a party-line vote. The final vote was 14-9, with Republican Senator Olympia Snowe voting with Democrats. Included in the bill passed out of Committee was a $40 billion tax on medical device manufacturers over 10 years. In addition, the bill also includes the creation of a Medicare Commission, requirements for manufacturer payment disclosures to healthcare providers, an extension of the gainsharing demonstration project, and comparative effectiveness provisions.
Over the course of the next month, the Finance Committee and the HELP Committee will work to merge the two respective Committee bills. Senate floor action will likely take place shortly thereafter.
MDMA is continuing to fight for the complete removal of the proposed tax on medical device manufacturers by meeting with lawmakers and urging Members to contact their elected officials. In addition, MDMA is working with lawmakers to improve other areas of health reform legislation including physician sunshine and payment reforms.
MDMA also recently cosigned a letter of opposition to the device tax in addition to over 240 other trade groups, device companies and venture capital firms.
http://www.theepochtimes.com/n2/content/view/23917/
Commerce Department Announces Position on Patent Reform
The Department of Commerce recently released a letter to Congressional leaders stating the Department’s position on patent reform legislation currently being considered before Congress. The Commerce Department was supportive of granting the Patent and Trademark Office more fee-setting authority in order to improve efficiencies. In addition, the letter expresses that the Department is supportive of recent efforts related to the apportionment of damages and is in favor of a “gatekeeper” role for judges; a proposal offered in compromise by the Senate Judiciary Committee and one that MDMA believes is a better approach than original legislation. However, the Department also expresses support for current provisions related to post-grant review. MDMA does not support current post-grant review proposals as they would indefinitely extend the period of challenge to legitimate patents and ultimately affect small device manufacturers.
MDMA has met with the Commerce Department over the past few months to express concerns with the various provisions within patent reform legislation that would threaten the intellectual property of small, innovative device manufacturers.
http://www.reuters.com/article/businessNews/idUSTRE59561I20091006
State Legislative Update 2009
The 2009 California Legislative Regular Session has drawn to a close, and in other years that would mean the Legislature’s business would be done until January. But this is far from a typical year. The Legislature has convened twice in the past nine months to address budget deficits that were larger than some states’ total budgets.
Despite these challenges, and to some degree because of the lack of funding to implement new state programs, BIOCOM had a very successful year in the legislative arena. BIOCOM’s Legislative and Public Policy Committees identified four bills as priorities; of these, three were opposition bills: one was defeated in committee and may be revisited next year, one was not taken up when it was clear the author did not have the votes for passage, and one was amended and BIOCOM therefore removed its opposition. Furthermore, no bills BIOCOM opposed in this legislative session made it to the Governor’s desk this year.
BIOCOM was also a party to a wide coalition which scored one of BIOCOM’s most significant legislative victories ever, the signing of ABx3 15, a bill which allows companies to choose to have their corporate income tax based on a single sales apportionment factor. This is an issue BIOCOM has been actively engaged in for several years, and will eliminate the tax penalty companies who choose to have large workforces in California have had to pay.
This all said, the Legislature is likely to reconvene, possibly as early as the second week in October, for special legislative sessions on water, education, possibly taxation, and a variety of other subjects. Keep an eye out in the BIOCOMMUNIQUE for updates on what is happening in these areas.
You can find a summary of the bills BIOCOM took a position on in the 2009 state legislative session by clicking here.
BIOCOM Public Policy Section Provides Regular Updates on Health Reform Progress
The health reform debate is proceeding at a dizzying pace. In an effort to keep our members informed of the very latest developments, BIOCOM has set up a section on its website which will have news articles that help update you on the status of health reform efforts or bring a new insight into the discussions for our members. The health reform section can be found here:
http://www.biocom.org/public_policy/Health%20Care%20Reform/
If you have questions or suggestions for articles to be included that you have come across, please contact Madeleine Baudoin, BIOCOM Associate Director of Public Policy, at mbaudoin@biocom.org.
Health Care Reform Update- Senate Finance Committee and the Chairman’s Mark
As you may know, Joe Panetta, President & CEO of BIOCOM traveled to Washington DC with a group and took the opportunity to visit with members of the House and Senate to discuss the proposed $4 billion tax on medical device products and the negative impact it would have on California. Joining him were Ahmed Enany, President & CEO, Southern California Biomedical Council (SoCalBio); Matt Gardner, President & CEO, BayBio; Todd Gillenwater, Vice President of Public Policy, California Healthcare Institute; and Tom Tremble, Vice President of Government and Regional Affairs, AdvaMed.
Together, the group explained to members of the House and Senate how extremely concerned the medical device sector in California was over the $4 billion annual tax on medical device products. They reminded our representatives and their staffs that California is home to our nation's largest medical device cluster. California employs over 112,000 medical device workers and they explained how a $4 billion tax hike would exceed the $3.7 billion venture capital funding raised by the medical device sector in 2007.
Together the group worked to recruit members of Congress to sign onto a letter of concern over the proposed tax which was spearheaded by Representative Anna Eshoo, and our California delegation displayed remarkable unity in supporting us in our efforts against Chairman Baucus' proposal on the device excise tax.
Although this is a good first step in insuring that Chairman Baucus will be open to revisiting this portion of his bill, the battle in Senate Finance Committee isn't over.
BIOCOM will continue to work with partners at CHI, AdvaMed, SoCalBio and Baybio to push for further negotiation on the medical device tax language currently being considered by the Senate Finance committee as part of broader health reform legislation. {See end of story of current update on legislation}
Click here to view BIOCOM’s letter of opposition to the Medical Device Tax BIOCOM Medical Device tax letter.pdf
Click here to view a letter of concern signed by both California Democratic and Republican members of the house, who all agree that California can't afford a $40 billion tax over the next 10 years. Eshoo Medical Device tax letter.pdf
Click here to view a letter of concern signed by both CA Senators Feinstein and Boxer. Feinstein-Boxer Medical Device tax letter.pdf
On Thursday September 24th, Sen. Ben Nelson (D-NE) introduced an amendment that would unravel the $80 billion agreement between the White House and PhRMA (one which also would apply to many biologics manufacturers). As you may know, the agreement was struck in June with an understanding that drug companies would agree to cut brand name drug prices by 50% for seniors affected by the “doughnut hole,” otherwise known as the gap in Medicare Part D prescription drug coverage.
Sen. Nelson’s measure to unravel the negotiated agreement failed 10-13, with Chairman Max Baucus (D-Mont.) and Democratic Senators Carper (D-Del) and Menendez (D-NJ) voting against the measure, leaving the previous agreement (which is written into the Chairman’s Mark entitled America’s Healthy Future Act of 2009) in place today. Under this language, biotechnology and pharmaceutical companies would be assessed roughly $80 billion in fees over the next 10 years.
On Tuesday, September 29, the Senate Finance Committee voted 15-to-8 against an amendment introduced by Democratic Sen. Sen. Jay Rockefeller (D-W.Va.), defeating his proposal to create a government run health insurance option that would compete with the private market. Five Democrats, including Chairman Baucus, voted along with ten Republicans to defeat the measure. Shortly thereafter, Sen. Chuck Schumer (D-NY) introduced an amendment which proposed to create a public option that would not rely on Medicare rates or require providers to participate. Schumer’s amendment was defeated with a vote of 10 to 13.
On Thursday, October 1st, the Senate Finance Committee concluded its consideration of amendments to the Committee’s version of the health care reform bill. The final bill has moved onto Congressional Budget Office for scoring. Once a price tag is assigned to the various elements of the bill, the Committee will reconvene to consider passing the final version of the legislation. One area of great concern to many BIOCOM members is the medical device tax contained in the Senate Finance bill. An amendment, introduced by Senator John Kyl (R-AZ), that would have stricken the $4 billion device tax from the bill, failed by a 10-13 vote.
National and Regional Life Science Leaders Hold Town Hall to Discuss Health Care Reform Efforts
More than 254 biotechnology therapies and many more medical devices help treat some of society’s most debilitating diseases. For the life sciences industry to continue to create new therapies, health care reform legislation must ensure continued support for scientific research and investment in innovation, said BIO President Jim Greenwood and BIOCOM President and CEO Joe Panetta.
The two industry leaders hosted a town hall meeting for BIOCOM members on Oct. 1, to discuss their organizations’ efforts to educate legislators and the public about the vital role biotechnology plays in all of our lives.
“Health care reform is inevitable and I expect some sort of reform package to be approved this year,” Greenwood told the San Diego life science executives who attended the meeting in BIOCOM’s headquarters.
Panetta has made monthly trips to Washington, D.C. this year, brining local life science executives with him to meet with legislators and their staffs to discuss the industry and the issues it faces in trying to bring new therapies to market. Among the proposed reforms that could negatively impact the industry is a tax on medical devices, Panetta said.
Proposals for creating a regulatory pathway that would allow biosimilar products to be produced needs to include at least 12 years of data exclusivity for the makers of innovative therapies, Panetta said. The exclusivity period is important to ensure the continuation of private investment that underwrites the commercialization of new products. And it is important in maintaining the rigorous process that tests products for safety and efficacy before they are made available to the public. So far this data exclusivity concern seems to have been understood by legislators. Both the House and Senate bills coming out of committee have included at least 12 years data exclusivity, Panetta said.
Panetta urged local executives to accompany him on one of his lobbying trips to the nation’s capital. BIOCOM will arrange the meetings during the trip, the executives just have to make the trip east, he said. It is effective for these people to hear directly from life sciences CEOs about how what happens in Washington impacts them every day in running a company, he said.
Greenwood outlined the national organization’s lobbying efforts, including actions all life science industry workers can get involved in at home. Everyone who works in the life science industry needs to be aware of the impact proposed health care reform measures could have on their job and their future, he said. And everyone should get involved and add to the industry’s voice on Capitol Hill.
“We need to energize our base and broaden our coalition,” said Greenwood, who has been organizing town hall meetings around the country to speak to the life science community.
In an effort to explain the complicated industry and business model to the general public, BIOCOM has taken a multi-pronged approach. It has sponsored free boot camps for journalists, to help them better understand the basics of the science including recombinant DNA. The boot camps also address the business model and provide an overview of the time, investment, risk and regulatory hurdles that are part of the drug development process. One such boot camp sponsored and organized by both BIO and BIOCOM, was held earlier this year at the University of California at Irvine and was attended by local, regional and national journalists from San Diego to Los Angeles.
The industry should take advantage of social media to strengthen its efforts by forming online “meet up” groups in which life science professionals can discuss the issues and discuss ways in which they can share their views with our elected officials on both the state and national levels. Greenwood urged life science professionals to visit BIO online at www.Iambiotech.org, and to spread positive stories about the industry and highlight partnerships through BIO and BIOCOM venues created on Linkedin, facebook and twitter.
For a copy of Greenwood or Panetta’s presentation, contact Terri Somers, BIOCOM’s Director of Communications.