On Monday, July 10, Governor Murphy signed the package of bills that addresses different components of the prescription drug supply chain. The following three bills constitute the package:

1. S1614 (Vitale/Pou/Singleton/Greenstein) | A2839 (McKeon/Karabinchak/Quijano/ Moriarty) - Requires health insurance carriers to provide coverage for epinephrine auto-injector devices and asthma inhalers; limits cost sharing for health insurance coverage of insulin.
2. S1615 (Singleton/Vitale/Pou) | A2840 (McKeon/McKnight/Moen/Moriarty) - Establishes certain data reporting requirements for prescription drug supply chain; establishes Drug Affordability Council; appropriates $1,500,000.
3. S1616 (Vitale/Singleton/Pou/Gopal) | A536/A2841 (Freiman/McKeon/Et al.) - Establishes new transparency standards for pharmacy benefits manager business practices.

Of the bills in the package, S1615 most directly affects the life sciences ecosystem in New Jersey. The bill has evolved significantly from its initial iteration and is fundamentally a byproduct of the integration of provisions derived from a preceding bill, S329/A1747.

Following extensive engagement by BioNJ and our partner organizations with the Governor’s office and Legislature over time, the bill has been substantially improved and potential provisions that would have produced severe ramifications for the sector throughout the State have been addressed. While there are some provisions in the final version of the bill that are still concerning, BioNJ appreciates the receptivity of both the Governor and Legislature to the most significant concerns conveyed by the life sciences industry.

For coverage of comments from the Governor and bill sponsors by InsiderNJ, click here.

In addition to the prescription drug bills and signing the State’s $54.3 billion budget, the Governor signed a bill that broadly reforms various components of the State’s tax policy, S3737/A5323, on July 3. Of note, the bill intends to decouple the State’s tax code from the federal IRC Section 174, which will enable companies in New Jersey to expense R&E/R&D costs in the years in which they are incurred. Given the essential role played by this provision for a variety of companies in the life sciences industry, which was available at the federal level until the Tax Cuts & Jobs Act of 2017, this State reform will enable a variety of entities to continue to invent and develop new medications.

In addition, the bill reforms the State’s Global Intangible Low-Taxed Income (GILTI) policy, increasing the deductions that are enabled by the State. These provisions, along with the anticipated sunset of the CBT Surtax, are salutary reforms that will redound to the benefit of entities throughout the life sciences ecosystem.

Beyond the budget and tax reform, several additional bills were passed by the Legislature, introduced, signed and/or made progress through committees prior to the summer recess:

1. S3* (Vitale/Lagana/Zwicker/Tully/Et al.) - Revises income eligibility criteria for, and provides for promotion of, PAAD and Senior Gold Prescription Discount Program; establishes "Senior Save Navigator Grant Program" to assist applicants with NJ Save applications.
2. S553 (Zwicker/Conaway/Atkins) - Adds technology transfer duties to New Jersey Commission on Science, Innovation and Technology.
3. S3402** (Zwicker/Singer/Tully/DePhillips) - Allows Commission on Science, Innovation and Technology to provide grants to employees of public institutions of higher education and their companies.
4. A3424** (Sumter/Reynolds-Jackson/Moen/Singleton/Turner) - Establishes "Annual Business Matchmaking Event" in Department of Treasury.
5. S3480** (Vitale/Pou/McKeon/Park/Murphy) - "The Small Business Health Insurance Affordability Act"; revises certain requirements for individual and small employer health benefits plans.
6. A4682** (Schaer/Timberlake/Danielsen/Singleton/Zwicker) - Establishes employment protections for certain service employees during changes of ownership.
7. A5661 (Mukherji/Pintor Marin) - Requires prescription drug coverage for serious mental illness without prior authorization or utilization management, including step therapy.

*Signed

**Passed both Chambers

On July 3, the Senate Health, Education, Labor and Pensions Committee released draft legislation to reauthorize Pandemic and All-Hazards Preparedness Act (PAHPA). Among the bill’s provisions is a particularly concerning provision that would directly diminish the incentives and authorities of the Bayh-Dole Act by capping the prices of any therapeutics that emerge from funding provided through the Biomedical Advanced Research and Development Authority (BARDA) or the Centers for Disease Control and Prevention (CDC).

BioNJ is engaging the State’s federal delegation to convey the unprecedented efficacy and value that the Bayh-Dole Act has generated to amplify innovation in the life sciences and beyond, as well as the severe ramifications that a decline of these incentives would have by diminishing the investment and R&D that has rendered the United States to be the global leader in biomedical innovation. The House Energy & Commerce Subcommittee on Health is expected to hold a mark-up of PAHPA on July 13.

To view the Senate HELP hearing, as well as testimony from Phyllis Arthur, Senior Vice President of Infectious Disease and Emerging Science Policy at the Biotechnology Innovation Organization, click here.

In addition, the Senate HELP Subcommittee on Health held a hearing entitled “Superbugs: The Impact of Antimicrobial Resistance on Modern Medicine” yesterday, July 11. To view the hearing, click here.

On June 15, a study conducted by Vital Transformation in partnership with We Work for Health was released that assesses the consequences that the provisions in the federal Smart Prices Act would have. The Act is intended to implement some of the provisions that were included in President Biden’s budget proposal, essentially expanding some of the provisions that are being implemented in the Inflation Reduction Act.

Notably, the study concludes that — as a result of requiring CMS to set prices for selected drugs after 5 years following initial FDA approval for both small and large molecules — approximately 200,000 jobs in the life sciences would be lost and over approximately 1,000,000 of total jobs lost throughout the U.S. Particularly concerning is the finding that New Jersey would be the second-highest state with loss of jobs in the country — second only to California and followed by Massachusetts. Additionally, 82 of the 121 therapies that the study assessed would not have been developed.

To read a press release from We Work for Health on this study, click here.

On June 30, the Centers for Medicare & Medicaid Services (CMS) released their final guidance regarding the implementation of the Inflation Reduction Act. As anticipated, the guidance provides for the price-setting policies that are anticipated to severely affect the trajectory of innovation in the life sciences in the United States, resulting in fewer new therapeutics and inhibited investment in particular therapeutic areas.

To read a statement from the Biotechnology Innovation Organization, click here.

Applications are being accepted by the federal Small Business Innovation Research (SBIR) program for the Small Business Transition Grant until August 21. This is a funding opportunity devised for early career academic scientists who are interested in transitioning to entrepreneurship and to support technology transfer from academic laboratories into small businesses.

To view a brief explainer video, click here.

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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