On the first day of the Biotechnology Innovation Organization conference in Boston last week, Vital Transformation released a report on the ramifications of the IRA on innovation in the life sciences. The comprehensive report is based on a model of how the provisions of the legislation will ultimately transpire and characterizes the severe impact that the legislation will have. Some notable findings include:

• A reduction in revenue on the therapeutics selected for price-setting of up to 40%
• A substantial reduction in investment opportunities, with at least 139 drugs never being developed over the next 10 years
• Both large and small molecules will be affected by the legislation, facing an average reduction in revenue per therapy of $4.9B and $4B, respectively
• A penalty for second indications resulting in an incentive to delay any pursuit of potential new opportunities for the treatment of rare diseases
• Diminished incentives to invest in the research and development of orphan drugs
• A significant loss of jobs both nationwide (342,000-676,000) and in New Jersey (51,161), which is second only to California in loss of jobs

Meanwhile, Merck filed a lawsuit that focuses on addressing specific provisions of the Inflation Reduction Act that essentially enable the federal government to set the prices of therapeutics. The suit argues that these provisions are unconstitutional because it allows for the government to force life sciences companies to provide their property on the market without “just compensation”, violating the Fifth Amendment. The suit also argues that the provisions violate the compelled speech doctrine of the First Amendment because companies would be attesting to an inaccurate characterization of what constitutes a “fair” price.

Click here to read an op-ed by the Wall Street Journal Editorial Board, which explores the implications of these provisions for both the life sciences and other sectors more broadly.

As the Legislature continues to make progress on the State’s budget, several bills have moved forward through committees ― or have been posted to committees ― that are worth monitoring:

•  S2710 (Turner/Zwicker) - Establishes a three-year sickle cell center pilot program; appropriates $10,200,000.
• Posted to Senate Health, Human Services and Senior Citizens on June 15
• S3177 (Greenstein/Smith) - "Protecting Against Forever Chemicals Act"; establishes requirements, prohibitions and programs for regulation of perfluoroalkyl and polyfluoroalkyl substances (PFAS).
• The bill was discussed in the Senate Environment and Energy Committee hearing on June 8. BioNJ joined a coalition of organizations in submitting testimony to articulate the importance of ensuring that the chemical definitions focus on substances that the bill intends to regulate and to ensure that the research and development of therapeutics will not be inhibited.
• S3402 (Zwicker/Singer) - Allows the Commission on Science, Innovation and Technology to provide grants to employees of public institutions of higher education and their companies.
• Reported by Senate State Government, Wagering, Tourism & Historic Preservation on June 12.
• S3737 (Sarlo) - Revises various provisions concerning State tax law.
• Reported by Senate Budget and Appropriations on June 12. Among the bill’s provisions is language that works towards decoupling New Jersey tax policy from IRC Section 174. Notably, the fiscal note that was posted for the bill on June 8 clearly articulates Division of Taxation’s intention to decouple New Jersey’s R&D expense deduction from the federal requirement. The bill also addresses the treatment of Global Intangible Low-Taxed Income (GILTI), bringing the State’s treatment in line with the majority of other states.
• A4360 (Tully/Benson) - Creates grant program for business accelerator and incubator networks; transfers $1 million in societal benefits charge revenues to EDA to administer program.
• Posted to Assembly Science, Innovation and Technology on June 15.
• A5557 (Tully/Murphy) - Increases amount of tax credits for investments made in certain technology business ventures under the "New Jersey Angel Investor Tax Credit Act."
• Posted to Assembly Science, Innovation and Technology on June 15.
• A5588 (Mukherji) - Requires prescription drug services covered under Medicaid program to be provided via fee-for-service delivery system.

On June 6, the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet held a hearing entitled “IP and Strategic Competition with China: Part II – Prioritizing U.S. Innovation Over Assisting Foreign Adversaries.” While the hearing explored a variety of topics, the potential expansion of the TRIPS waiver to include diagnostics and therapeutics was a focal issue.

On March 30, Debbie Hart, President & CEO of BioNJ, provided oral testimony and post-hearing briefs to the International Trade Commission during their hearing devoted to the potential expansion of the waiver. We are pleased to see that the concerns regarding the ramifications of the sacrifice of intellectual property would have on innovation throughout the life sciences were raised in a bipartisan fashion. We hope that the results of R&D in the life sciences continue to benefit from the strong and predictable intellectual property framework in the United States.

Last week, BIO, in partnership with the Council of State Bioscience Associations (CSBA), released “The U.S. Biosciences Industry in the States: Best Practices in Innovation, Partnerships and Job Creation,” which touts New Jersey as a national leader in spurring innovation and stimulating industry and economic growth.  

Now in its seventh edition, the report analyzes the latest legislative and regulatory economic development initiatives at the state and regional level that help support the growth and development of the bioscience sector in the respective states.

BioNJ looks forward to continuing to work with policymakers to ensure that every opportunity to amplify innovation in the life sciences is explored and pursued in New Jersey.

Click here to download a copy of the report.  

The Federal Reserve recently released its analysis of the economic well-being of the country. Among the assessments in the report were which forms of medical treatment were skipped due to unaffordability. The list was topped by dental care, with 21%, and seeing a doctor or specialist at %16.

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 2023. 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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This Public Policy Update was sent by BioNJ.