Happy Hour with Legislative Staff Jan. 28
Ever wonder what the most effective way of communicating with your legislators is? Of course, it is face to face interaction. But elected officials are pulled hundreds of directions, and talking to them before a critical vote is not always practical. The next best thing? Establishing a relationship and talking to key staff. Staffers filter information that gets to an elected official, and often have far fewer issues to track than the legislators themselves. If you have developed a relationship, the chances are much higher that your information actually makes it to the eyes of the lawmaker. It is not unusual for a note from a staffer to completely change the outlook of a legislator on a proposal before them.
On Thursday, January 28, from 5:30 to 8pm, the BIOCOM Political Action Committee will host its Annual Legislative Staff Appreciation Happy Hour (sponsored by SDG&E) at the new La Jolla Strip Club - a steak place (site of the former Trophy's).
This is an opportunity for members of the industry to meet staffers from federal, state, and local legislative offices in an informal setting and begin to develop the relationships to insure your voice is heard in the future. Details and RSVP information on the event can be found here.
The BIOCOM PAC is a California state PAC, ID #963088. Political contributions are not deductible as charitable contributions for income tax purposes.
Universities Weigh In on Patent Reform
Several universities from across the country sent a letter to the White House
recently expressing concern over the Patent Reform Act of 2009. Specifically,
the letter expressed concern over post-grant review provisions in both the House
and Senate version of the patent bill. Universities are often the starting point
for many technologies that later go through the commercialization process,
including medical technologies. The letter cites the concern with the post-grant
review provisions in both bills, which they believe would ultimately hamper the
ability of university-based technologies to reach the market.
http://www.eetimes.com/news/latest/showArticle.jhtml?articleID=220900589
Senate Passes Health Reform Bill
On December 24, the Senate passed H.R. 3590, the Patient Protection and Affordable Care Act (PPACA) along party lines by a vote of 60-39. The bill included numerous provisions of interest to device manufacturers including the imposition of an annual fee, disclosure of financial relations and other provisions. Of notable interest, the Senate bill included a slightly modified version of the device fee. Specifically, the device fee included in the Senate bill will total $20 billion over 10 years and begin in 2011. The fee will be $2 billion annually from 2011-2016 and increase to $3 billion in 2011. In addition, the fee remains non-deductible and includes a small business exemption similar to earlier Senate legislation. Specifically, it would exempt the first $5 million in U.S. sales from any tax and U.S. sales from $5-25 million would be taxed at half the rate.
The House and Senate must now reconcile each body’s respective legislation. Throughout this process, MDMA will continue to work closely with House and Senate staff to improve the device related provisions, including the device tax. While MDMA opposes the imposition of a new tax on the industry, it is unlikely that the tax will be excluded in its entirety. Therefore, we are also engaged in discussions to minimize the impact of the tax on our membership. Specifically, MDMA has been working on an amendment that would exempt the first $100 million in U.S. sales from any tax and U.S. sales from $100-150 million would be taxed at half the rate. We are also seeking to delay the start date until 2013.
Importation an Issue Again, FOB’s Still on the Table
During its Washington visit earlier this month, BIOCOM met with Senator Dianne Feinstein’s staff to discuss the industry’s opposition to drug importation. Joining us was Todd Gillenwater of the California Healthcare Institute, Jeremy Allen of Vertex and Anna Weinstein of BIO. Together the group voiced their concerns over an importation amendment proposed by Sen. Byron Dorgan (D-ND) as part of the greater issue of health care reform. While BIOCOM supports public policies that promote improved access to the most medically appropriate and current therapies, devices, and diagnostics, Senator Byron Dorgan’s Importation Amendment is not a safe solution and could open the U.S. market up to sub-optimal care, serious patient safety risks, and could result in poor outcomes and higher health costs.
BIOCOM believes that all U.S. quality and safety standards should be met before risking patient safety for importation from other countries and is happy to report that two drug importation amendments – one introduced by Sen. Byron Dorgan, D- ND and the other by Sen. Frank Lautenberg, D-NJ - were defeated in the Senate on December 15th. The Dorgan drug importation amendment (that BIOCOM opposed), which would allow for drug importation without any required safety certification by the Secretary of HHS, was defeated by a vote of 51-48. A second drug importation amendment, known as the Lautenberg amendment, was introduced and would only allow for drug importation after the Secretary of HHS certified it could be done at no risk to patient safety. Lautenberg’s amendment failed by a vote of 56-43. BIOCOM will continue to follow this issue and advocate for improved access to medicines for the people who need them via safe and effective policies. Jeopardizing consumer safety via importation is not the answer.
As has been reported here frequently, legislation in both the House and Senate health reform bills propose to create an approval pathway for follow-on biologics, and provide 12 years of non-patent data exclusivity to ensure continued medical innovation, with an additional 6 months of exclusivity for the use of products for the pediatric population. We expect unfriendly members to continue to try to change this period. Please send a copy of the letter on our public policy website supporting the Biosimilars Amendment Rep. Eshoo has proposed. (http:www.biocom.org/public_policy/legislative_monitoring/)
Medical Device Tax Still in Play
One area of great concern is the medical device tax contained in both the House and Senate Health Care Reform bills. Current law does not impose an annual sector fee on companies that manufacture or import medical devices for sale in the United States; however the approved House proposal imposes a $20 billion tax on the medical device industry over the next six years. The Senate proposal would also impose a $20 billion non deductible fee (down from $40 billion in the original Finance Committee measure). The fee would be based on market share determined by domestic sales. If enacted, this tax would take effect in 2010.
California is the birthplace of the life science industry, and home to one of our nation’s largest medical device cluster, which employs over 112,000 medical technology workers. BIOCOM will continue working with partners at MDMA, CHI, AdvaMed, SoCalBio and BayBio to push for further negotiation on the medical device tax language currently being considered as part of broader health reform legislation. The California delegation has displayed remarkable unity in supporting our efforts, but the battle isn't over. Please send a copy of the letter on our public policy website opposing the Medical Device Tax to your legislators. (http://www.biocom.org/public_policy/legislative_monitoring/)
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.