Good Day BIO: Readout of the reconciliation markup

September 16, 2021
It was a busy week in the House, with several committees marking up the Senate’s $3.5 trillion budget reconciliation package. We witnessed debate and proposals of great importance to all sectors of the biotech industry that BIO’s been engaged on—here’s a recap of key…
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It was a busy week in the House, with several committees marking up the Senate’s $3.5 trillion budget reconciliation package. We witnessed debate and proposals of great importance to all sectors of the biotech industry that BIO’s been engaged on—here’s a recap of key provisions related to drug pricing, SAF tax credit, and more. (856 words, 4 minutes, 16 seconds)

 

Drug price controls stall in budget markup

 
 

This week brought perhaps the most consequential policy fight in our industry in more than a decade. House Democrats continued to push H.R. 3 (their drug package) and inserted it into the broad budget reconciliation bill moving through Congress. 

And late last week a group of moderate House Democrats, led by Rep. Scott Peters (CA) and Rep. Kurt Schrader (OR), introduced a compromise approach to drug pricing—an important development leading up to this week's action.

Fast forward to Wednesday, when the Energy & Commerce Committee, where the majority of H.R. 3 was debated, began consideration of that provision.

The drug pricing provision failed 29-29, with Democratic Reps. Scott Peters, Kathleen Rice (NY), and Kurt Schrader joining Republicans in voting “no.” Not coincidentally all three are sponsors of the aforementioned compromise bill.

“We rely on the private sector to use private capital to create applications for that science,” said Rep. Peters. “And that makes sense for taxpayers because drug development is full of risk and most drug candidates that receive investment never come to market”—watch and share the clip

The committee did pass other health-related provisions—including Subtitle J (related to updating pandemic preparedness, maternal health, and others) and Subtitle I (adding dental, vision, and hearing benefits to Medicare). 

The compromise bill put forth certainly changes the discussion about drug pricing, but Speaker Pelosi has broad power to add back in provisions at will and we're not in the clear yet, especially since President Biden supports it

The next few weeks will be fascinating to watch. Be sure to catch GoodDay BIO each morning to get the latest news, including more tomorrow on the legislation's impact on the Orphan Drug Tax Credit. 

AMR 

Bipartisan Members also agreed on the importance of developing antibiotics to combat the threat of antimicrobial resistance (AMR)—which is expected to kill more people annually than cancer by 2050.

“Many of the small, innovative companies working to develop new antimicrobials have filed for bankruptcy after bringing novel and effective drugs to market, and many of the major pharmaceutical companies have shuttered their antibiotic divisions altogether,” said Rep. Mike Doyle (D-PA). “The truth is the way the market incentivizes R&D right now…simply doesn’t work for antimicrobials.”

“We’re losing our effective antibiotics and antimicrobials to resistance and there isn’t a robust R&D pipeline coming to replace them,” he continued, explaining how The PASTEUR Act could help—watch and share the clip

“He’s right—that is a really good bill,” said Rep. Fred Upton (R-MI), noting it would be part of the Cures 2.0 legislation “later this month”—read BIO’s comments on the bill.

 
 
 
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SAF tax credit en route

 
 

The Ways & Means legislation contains a number of green energy tax incentives that are a high priority of BIO and our member companies.

The budget establishes a refundable blenders tax credit for sustainable aviation fuel (SAF) sold as part of a qualified fuel mixture. The credit would start at $1.25 a gallon and rise to a maximum of $1.75 by one penny for each percentage point by which the product’s lifecycle emissions reduction exceeds 50 percent. 

The provision is based on the Sustainable Skies Act (H.R. 3440), which BIO and a coalition of biofuel, aviation, and environmental stakeholders worked on with Reps. Brad Schneider (D-IL), Julia Brownley (D-CA), and Dan Kildee (D-MI). (The Sustainable Skies Act currently has 45 cosponsors and a Senate companion, S. 2263.) The inclusion of a standalone SAF credit is a major victory and critical to the White House's effort to increase SAF production to 3 billion gallons by 2030.


BIO is continuing to work with the sponsors to refine the eligibility language as the reconciliation process moves forward. During the markup, Rep. Schneider noted, “We are actively working on language to resolve the issue. Our goal has long been to have the domestic eligibility standard functionally independent from ICAO." BIO is hopeful it will be resolved when the bill comes to the House floor.  

The budget also contains a second-generation producer credit. Sec. 136201 extends incentives through 2031, including the $1.01/gallon of second-gen biofuel producer tax credit for cellulosic fuels. BIO has long advocated for a long-term extension to give investors and industry the certainty needed to develop and commercialize cellulosic biofuel.  

Also worth noting: investments in climate research and ag innovation, including… 

  • $250 million to Agricultural Research Service (ARS), to research climate hubs, agroecosystems, nutrient uses and outcomes, and soil carbon data collection
  • $54 million to National Agricultural Statistics Service (NASS) to carry out data collection and agricultural research relating to climate change.
  • $4.2 billion for the National Institute of Standards and Technology (NIST), including $1.2 billion for projects key to economic growth and national security including biotechnologyadvanced manufacturing, and resilience to natural hazards including wildfires, greenhouse gases, and other climate-related measurements.

What’s next? The budget reconciliation advanced to the House Budget Committee, which will consolidate all recommendations and do its own markup. It could head to the House floor as early as next week.

You can watch the full four-day markup here.

 

More Agriculture and Environment News: 

POET: POET pledges carbon neutrality by 2050
“In addition, POET pledges to ensure that its renewable, plant-based bioethanol reduces greenhouse gas (GHG) emissions by at least 70 percent compared to gasoline by 2030.”

Gevo: White House Coordinates Departments to Meet the Grand Challenge: Reduce Aviation Carbon Footprint by 50 Percent by 2050
"Gevo, Inc. is pleased to share the news that the U.S. Department of Energy (DOE), the U.S. Department of Transportation (DOT), and the U.S. Department of Agriculture (USDA) entered into a memorandum of understanding (MOU) outlining the Sustainable Aviation Fuel Grand Challenge (the Grand Challenge)."

New York Times: How Biotechnology is Getting a Technology Makeover
"The story of Ginkgo Bioworks shows the challenges and progress in the emerging field of synthetic biology."

 
 
 
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Dr. Carlos Juan Finlay was an epidemiologist who discovered that yellow fever is transmitted by mosquitoes. His work ultimately led to the eradication of the disease in Panama and Cuba—and spurred the completion of the Panama Canal, as construction was often delayed by outbreaks of the disease.

Meet more Hispanic and Latinx scientists and innovators you should know.

 
 
 
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President Biden’s Thursday: At 1:45 PM ET, he’ll deliver remarks on “leveling the playing field in our economy to bring down costs and ensure that the backbone of the country, the middle class, can finally get a break.” 

What’s Happening on Capitol Hill: Quiet(er) after a busy week.

 

 
 
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