January 22, 2025

Last week, BioNJ attended Governor Phil Murphy’s penultimate State of the State Address. The speech focused on his continued goals for the rest of his final term, including an emphasis on general affordability: property tax relief, a retirement savings program, paid parental leave, investment in education, as well as highlighting recent legislation focused on medical debt.

While the life sciences were not the focus of this Address, BioNJ was glad to hear the Governor emphasize the role that our sector plays in enabling New Jersey to earn the reputation of being the “medicine chest of the world” and highlight that we proudly hold the distinction of having “more engineers and scientists per capita than anywhere else on the planet.”

Given the clear driving theme of affordability among the goals that Governor Murphy conveyed, BioNJ is hopeful that the State Legislature will continue advancing efforts to address the business practices of pharmacy benefit managers (PBMs), which play a key role in driving up medication costs.

We will continue working with policymakers in the Legislature and the Governor to promote policies that reliably reduce costs while sustaining innovation, including supporting S3818 (Scutari/Bramnick) and A4953 (Freiman), which address different PBM practices, to more effectively achieve our shared goal of making medicine as accessible as possible to patients.

BioNJ released the following statement following the Governor’s Address:

“BioNJ was pleased to see that, in his State of the State Address, Governor Murphy emphasized the importance of innovation to the health and success of New Jersey’s economy. As we have over the course of the Governor’s administration, we look forward to working with the Governor and other policymakers as well as our Members to continue earning the reputation as the “Medicine Chest of the World” and supporting the Governor’s priority to ensure that our State is home to a growing number of innovators who are making their mark. As the Governor noted, “the best way to predict the future is to create it” — and as representatives of the industry responsible for more FDA approvals than any other State in the country, we will continue to support that vision, Because Patients Can’t Wait^®.”

To watch the Governor’s State of the State Address for 2025, click here.

While Governor Murphy, the first Democratic governor in 44 years to win a second term in New Jersey, will remain in office until January 2026, the race to determine the next governor is already in full swing.

Quite a few individuals have announced their candidacy, and the major candidates as of today are listed below:

Democratic

• Ras Baraka, Mayor of Newark
• Steve Fulop, Mayor of Jersey City
• Josh Gottheimer, Congressman for NJ5
• Mikie Sherrill, Congresswoman for NJ11
• Sean Spiller, President of the New Jersey Education Association
• Steve Sweeney, former NJ Senate President from LD3

Republican

• Jon Bramnick, NJ Senator for LD21
• Jack Ciattarelli, former Assemblyman for LD16 and former gubernatorial candidate
• Ed Durr, former Senator for LD3
• Bill Spadea, businessman and television and radio host

BioNJ will update upon any new entrants to the race ahead of the primary elections that will take place on June 10.

Last week, Senate President Scutari made changes to leadership in the upper house following the movement of former Senator Pou to the U.S. Congress.

Senator Lagana (D-LD38), formerly the Chair of the Senate Labor Committee, will take former Senator Pou’s role as Chair of the Senate Commerce Committee.

Senator Johnson (D-LD37) will replace Senator Lagana as Chair of the Senate Labor Committee.

Senator Mukherji (D-LD32) will replace Senator Johnson as Chair of the Senate Military and Veterans’ Affairs Committee.

Former Assemblyman Benjie Wimberly (D-LD35) has won a special election to fill the State Senate seat formerly held by Congresswoman Nellie Pou (D-NJ9). His opponent was his district-mate, Assemblywoman Shavonda Sumter. Paterson Councilman Al Abdelaziz will assume the district’s Assembly seat in LD35.

In addition, changes were made to leadership of the democratic caucus, including the elevation of Senator Gopal (D-LD11) to serve as the new Senator Majority Whip.

Given the similar movement of legislators from the Assembly to the U.S. Congress, we can anticipate some changes to committee leadership in the Assembly — including a new Chair of the Assembly Health Committee to replace its former Chair, Congressman Herb Conaway (D-NJ3) at a minimum. It is expected that a caretaker legislator will fill Rep. Conaway’s former Assembly seat for LD7 for the rest of his unexpired term.

Finally, Melinda Kane will be sworn in to replace the State’s sixth legislative district, which was formerly occupied by longtime Assemblywoman and Chair of the Assembly Education Committee, Pam Lampitt, who is now serving as Camden County Clerk.

BioNJ, in partnership with BIO, submitted comments on the proposed rules posted by New Jersey’s Division of Consumer Affairs associated with the prescription drug data reporting requirements and the NJ Prescription Drug Affordability Council prior to the January 17 deadline. While our comments were fairly extensive, central themes included ensuring compatibility between the enabling statute and the proposed rules, establishing greater clarity regarding the data that are subject to these policies, establishing greater clarity on the reporting of state vs. national data and concerns with general definition provisions.

BioNJ is grateful for the input that several member companies provided regarding concerns associated with these proposed rules, as well as for the collaboration with our partners at BIO, and we look forward to engaging the Division to continue to ensure that they appreciate the virtues of how this input would improve the efficacy of these policies.

In addition, the Prescription Drug Affordability Council met last week and elected its Vice Chair: Crystal McDonald, Associate State Director for Advocacy at AARP.

To review the proposed rules, click here.

On January 17, the Department announced the additional 15 drugs that will be subject to the pricing provisions of the Inflation Reduction Act. The pricing negotiations are scheduled to take place in 2025, and the results of those negotiations would become effective in 2027. The drugs targeted are the following:

• Ozempic; Rybelsus; Wegovy 
• Trelegy Ellipta 
• Xtandi
• Pomalyst
• Ibrance
• Ofev
• Linzess
• Calquence
• Austedo; Austedo XR 
• Breo Ellipta 
• Tradjenta
• Xifaxan
• Vraylar
• Janumet; Janumet XR 
• Otezla

In response to this announcement, BioNJ released the following statement:

BioNJ President & CEO Debbie Hart's Statement on the New List of

Medicines Targeted for Government Price Setting

“BioNJ fully supports the statement made by Biotechnology Innovation Organization President and CEO John Crowley regarding this morning's announcement from the U.S. Department of Health and Human Services on the selection of 15 additional drugs under Medicare Part D for price negotiations.

We are increasingly concerned about the impact of the pricing provisions in the Inflation Reduction Act. These provisions are already affecting companies at every stage of the pipeline, particularly those struggling to secure funding for small molecule therapies which inevitably prioritizes certain Patient communities over others who depend on new small molecule therapeutics to treat or cure their medical conditions.

This means that, beyond the impact on companies whose drugs are targeted in this round, earlier stage companies are being hurt by the therapies that never make it to the bench. And ultimately, the real price is paid by Patients who will never see the innovation they so desperately need.”

The Biotechnology Innovation Organization also released a statement in response, which can be read here.

As we have been since the pricing provisions were first described in the early deliberations regarding the IRA pricing provisions, BioNJ will continue to convey the ramifications that these provisions have already started to have — and will continue to have — if the most damaging provisions of this policy fail to be addressed. We look forward to working with this new Congress and the new Administration to make progress towards mitigating this damage.

A few days into his new administration, the President rescinded several executive orders that had been issued by the prior administration that were focused on drug pricing and access. One is related to Center for Medicare and Medicaid Innovation drug pricing experiments, The Cell and Gene Therapy Access Model, which has been aimed at creating outcomes-based agreements to facilitate access to emerging therapeutics. Given that these models represent an option that has been embraced by some members of the life sciences ecosystem, we look forward to ongoing discussions regarding options to ensure every Patient has access to every medication they need, and we will update as we learn more about what, precisely, this withdrawal means for the future of these kinds of agreements.

For coverage of the rest of the President’s latest executive orders in STAT, click here.

Earlier this month, the Federal Trade Commission (FTC) released its second interim staff report focused on the role that PBMs play in driving up costs that Patients confront when trying to access the medications that they need. The report is extensive, but deeply scrutinizes the effect that PBMs have had in significantly inflating the costs of specialty medications.

Some of the highlights from the report:

• The Big 3 PBMs [Caremark Rx (CVS), Express Scripts (ESI), and OptumRx] marked up two specialty generic cancer drugs by thousands of percent and then paid their affiliated pharmacies hundreds of millions of dollars of dispensing revenue in excess of estimated acquisition costs for each drug annually.
• The Big 3 PBMs marked up numerous specialty generic drugs by hundreds and thousands of percent, with the majority of the most highly marked-up drugs dispensed by the PBMs' own affiliated pharmacies.
• A larger share of commercial prescriptions for the most profitable specialty generic drugs were dispensed by the Big 3 PBMs’ affiliated pharmacies compared with unaffiliated pharmacies.
• In the aggregate, the Big 3 PBMs also generated significant income on the specialty generic drugs assessed in this report from spread pricing — i.e., billing their plan sponsor clients more than they reimburse pharmacies for drugs.

BioNJ released the following statement earlier this week:

BioNJ's Statement on the Federal Trade Commission's

Second Interim Staff Report on Pharmacy Benefit Managers

"BioNJ is pleased to see that Congress continues to scrutinize the business practices of pharmacy benefit managers (PBMs), following the release of the Federal Trade Commission’s (FTC) second interim staff report. As expected, the FTC found that the three largest PBMs have engaged in practices that dramatically inflate the prices of medications — in some cases by over 1000% for specialty generic drugs dispensed at their affiliated pharmacies. Further, the FTC found that the 'majority of the most highly marked up specialty generic drugs were dispensed by PBM-affiliated pharmacies'.

As the government continues to uncover the impact that PBM business practices have had on the prices that Patients confront, we hope to see legislatures at both the state and federal level seize opportunities to address the core drivers of unaffordability. These practices are what separate Patients from the medications they need, and so we look forward to working with policymakers to ensure that every opportunity to increase access and innovation is pursued."

Last week, the Assembly counterpart to S3818 (Scutari/Bramnick) was introduced by Assembly Majority Leader Greenwald (D-LD6) and the Chair of the Assembly Financial Institutions and Insurance Committee, Assemblyman Freiman (D-LD16). While we await the language from the Assembly bill, which is A5217, the Senate bill was reported unanimously by the Senate Commerce Committee last December without amendments.

The bill fundamentally prohibits carriers and PBMs in New Jersey from using copay accumulators, and BioNJ was glad to support the bill as it moved through its first Senate committee. The bill is now referred to the Senate Budget & Appropriations Committee and we look forward to any opportunity to support this policy that will inevitably redound to the benefit of Patients as it hopefully makes progress in the Assembly.

Tomorrow, January 23, two bills are going to be heard by the Assembly Science, Innovation and Technology Committee at 2PM:

• A4888 (Atkins/Speight/McCann Stamato) — Establishes AI and Labor Market Study Commission to analyze impact of artificial intelligence on labor market.
• A4935 (Atkins/McCann/Speight) — Establishes Artificial Intelligence Apprenticeship Program and artificial intelligence apprenticeship tax credit program.

BioNJ is pleased to see this ongoing prioritization of ensuring that New Jersey continues making progress in cultivating this critical sector and looks forward to supporting these efforts.

Governor Murphy also announced that Shabnam Salih, the Office of Health Care Affordability and Transparency’s inaugural director, is stepping down. BioNJ thanks Shabnam for her work in this area and wishes her much success in her future endeavors. BioNJ looks forward to working with Commissioner Baston and her team as they continue this important work.

For a press release from the Governor’s Office on this transition, click here.

Earlier this month, an article written by Patrick Plues, Senior Vice President, State Government Affairs & Affiliate Relations at the Biotechnology Innovation Organization (BIO), published an article in RealClearHealth focused on the role of biotech in the U.S. Economy. His fundamental argument is that the life sciences sector presents a tremendous opportunity to ensure that the U.S. economy not only benefits from the innovation of the sector — but that the sector also represents a strategic advantage that can be leveraged to maintain global competitiveness. The article also highlights some of the flaws in the Inflation Reduction Act that can be addressed with some prudent policy opportunities.

To read the article, click here.

Last week, the USPTO announced a new AI strategy with the goal of empowering responsible implementation, inspired by the increased pace of innovation in the sector. The strategy includes five focus areas:

1. Advance the development of IP policies that promote inclusive AI innovation and creativity
2. Build best-in-class AI capabilities by investing in computational infrastructure, data resources, and business-driven product development
3. Promote the responsible use of AI within the USPTO and across the broader innovation ecosystem
4. Develop AI expertise within the USPTO’s workforce
5. Collaborate with other U.S. government agencies, international partners and the public on shared AI priorities

Please reach out to Ian McLaughlin, VP of Government Affairs, with any thoughts: IMcLaughlin@BioNJ.org

BioNJ is the voice of New Jersey’s life sciences sector in Trenton and Washington. BioNJ’s Public Policy Support Series sponsorship opportunities are now available for 2025. Help ensure BioNJ continues to deliver our message of improved Patient access and enhanced innovation through a Public Policy Support Series Sponsorship.  

Click here for more information.

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