2017 Federal Policy Agenda

CLSA’s seasoned federal government relations team is engaged on behalf of the biomedical, agriculture, and industrial biotechnology sectors in multiple ways through strategic collaborations and direct lobbying in Washington, D.C. to advance innovation, investment and job creation for California’s treasured life sciences ecosystem. Our 2017 federal policy goals include:

Regulation: FDA Policies & Funding

History shows that a well-funded, science-based FDA and consistent, predictable and transparent product review processes are critical to and necessary for biomedical investment, innovation and improvements in patient care. It is the technical strength of the Agency and the clarity of its regulatory processes that helped the United States – with California front and center – become the global leader in medical device, pharmaceutical and biotechnology innovation. None of this would be possible without adequate funding of the Agency – through both congressional appropriations as well as industry-paid user fees.

With the Agency’s authority to collect user fees set to expire at the end of this fiscal year, Congress will need to pass reauthorization legislation well before the August recess. Through this process, a key priority for CLSA will be to continue advocating for adequate and full funding of FDA so that the agency may meet its Congressionally-mandated product review responsibilities, as well as sustain biomedical investment, innovation and improvements in patient care. CLSA will also support policies that promote biomedical innovation by enhancing industry-Agency communications, strengthening Agency performance reporting requirements, and improving product review process predictability, consistency and transparency. We will also continue our partnership with BCG to publish updated FDA drug and device review and performance data as part of our work to monitor FDASIA implementation to further refine and improve the regulatory process, both through legislative action in the next round of user fee negotiations and FDA’s own administrative changes. We will also continue to focus efforts on ensuring appropriate and transparent implementation of the regulatory pathway for the approval of biosimilar products established by the Biologics Price Competition and Innovation Act (BPCIA) in 2010.

Research: Biomedical Research & Education

The continued vibrancy of the California and U.S. biomedical industry depends on many factors, but at its very foundation, it relies upon continued advances and progress in science that are fueled and driven by the NIH and other federally-funded science research. Chronic underfunding of NIH at levels below the rate of medical inflation, compounded by mandatory sequestration in prior fiscal years, have put America at risk of ceding our global leadership in biomedical research and innovation. Congressional activity during the debate over the House and Senate “innovation initiatives” signaled a shift in a more positive direction, coming to fruition on December 13, 2016 when President Obama signed the 21st Century Cures Act into law. This legislation provides a 1.5 percent increase over the agency’s current $32 billion budget, authorizing nearly $5 billion in funding over 10 years. Although NIH appropriations are certainly trending in the right direction, there is more work to be done to ensure that NIH is properly funded.

To that end, CLSA continues to support efforts to bolster NIH and other science research funding, as the critical foundation of the biomedical R&D ecosystem. We also join efforts to support funding for important biodefense and pandemic research, development and procurement, and work to highlight the importance of science, technology, engineering and math (STEM) education and pro-business immigration reform to support the biomedical industry’s continued and sustained vibrancy.

Reimbursement: Coverage, Payment, Access & Value

The ability for products to receive timely and appropriate coverage and reimbursement is critical to drug, device and diagnostics innovation and patient care, and has been a priority area of focus for CLSA in 2016. Our advocacy and education efforts in 2017 will continue to largely focus on the challenges surrounding the coverage of and payment of these innovative new treatments.

Although political power has shifted with the election of President Donald Trump, CLSA expects that drug pricing issues will likely remain a salient topic on Capitol Hill during the 115th Congress, especially among Democratic members in the House of Representatives and Senate. In anticipation of increased activity on this issue at the federal level, CLSA has expanded upon its “Value of Innovation” campaign through our “Protect Access and Innovation” initiative, with the aim of calling attention to the value that medical innovation provides to patients, our healthcare system and the overall economy, while exposing policies and proposals that threaten patient access to care.

In the 115th Congress, CLSA will focus activities on engaging with members and staff of our congressional delegation, to further share data regarding biomedical research and development, illustrating other factors affecting rising healthcare costs and patient access – such as restrictive formularies, specialty tiers, cost sharing, limited provider networks – and highlighting the value and long-term cost-savings California’s innovative life sciences ecosystem provides to patients, the healthcare system and the overall economy.

CLSA has consistently advocated to protect successful Medicare programs from proposals that would undermine and weaken them, and will continue to do so in 2017 and beyond. Although the future of the Center for Medicare and Medicaid Innovation (CMMI) is currently in question and its Part B demonstration proposal that we advocated strongly against has been withdrawn, CLSA will continue to be vigilant in monitoring threats against innovation and patient access. Similarly, where Medicare coverage and payment processes have become increasingly more cumbersome, complex and uncertain, CLSA is well- positioned to develop and communicate the implications and consequences of such trends on medical technology innovation and patient care. As an example of our work, CLSA collaborated with our member companies and AdvaMed to support the establishment of a formal “breakthrough device” coverage and payment mechanism with the introduction of H.R. 5009 and look forward to supporting the introduction of the legislation again in the 115th Congress.

Tax, Trade and Intellectual Property

Sound tax, IP and trade policies can greatly influence life sciences investment, innovation and job creation and enhance global competitiveness – by providing companies with important incentives to make high- risk investments, leading to the development of innovative, life-saving therapies and medical technologies.

Unfortunately, today, U.S. tax policy serves as a complicated and growing burden on companies competing in the increasingly intertwined and interconnected global economy. Issues ranging from the U.S.’s near-world high corporate tax rates, never-ending angst over protecting the Orphan Drug and R&D tax credits and, most recently, a punitive excise tax on medical technologies at a time when we need more, not less, investment and innovation are just a few of the examples of the issues CLSA advocated for in 2016.

For emerging companies, the challenges are even more direct – venture capital and other investment dollars to start-up firms have been drying up, meaning that these entrepreneurial firms are struggling simply to keep their doors open. As discussions over comprehensive tax reform continue (with legislative action unlikely until Congress completes the bulk of its efforts to “repeal and replace” the Affordable Care Act), it will be critically important for policymakers to consider and incorporate proposals that recognize these and other challenges.

However, the life sciences sector did see two major victories in the 114th Congress. Since the inception of the medical device excise tax, CLSA and its legacy organizations have advocated for a full repeal of the measure. In 2015, a two-year delay on the medical device tax was passed and signed into law by President Obama. Although the fight for permanent repeal continues, this temporary reprieve was a major triumph for our medical device members. In addition, the R&D tax credit was made permanent as a part of the tax extenders package that passed in December 2015.

Similarly, policymakers must support intellectual property protections – maintaining strong patent and IP laws here at home and in trade talks, and standing up to piracy and abuse of compulsory licensing rules abroad. In early 2015, House Judiciary Chairman Bob Goodlatte (R-Va.) introduced H.R. 9, the so-called Innovation Act, legislation that would threaten the ability of biomedical innovators to enforce their patents and fund continued R&D by inadvertently making it more difficult, time-consuming and expensive to enforce legitimate and important IP rights. Throughout 2015, CLSA actively participated in opposing this bill, succeeding in halting its momentum to the floor. Although this legislation saw no further action in the 114th Congress, we expect Congress to explore resurrecting patent litigation reform efforts in the new Congress – in anticipation of this, CLSA will continue to be focused on intellectual property in 2017 with regard to any movement on reform legislation as well as the ongoing issue of inter partes review at the Patent and Trademark Office (PTO) that has affected our sector.

With California’s Congressional Delegation holding many important leadership positions relevant to this debate – including House Majority Leader Kevin McCarthy (R-Bakersfield), House Minority Leader Nancy Pelosi (D-San Francisco), Rep. Darrell Issa (R-Vista), chair of the House Judiciary Subcommittee on Intellectual Property, and Senator Dianne Feinstein (D-Ca.), a senior member of the Senate Judiciary Committee – CLSA is well-positioned to continue encouraging Congress to find a bipartisan, common sense solution to this challenge, while taking care to maintain important incentives for biomedical innovation that support continued investment in the groundbreaking research which yields new therapies and cures for those in need.

During negotiations around the Trans-Pacific Partnership (TPP) last Congress, CLSA advocated to maintain the 12 years of data exclusivity for biologics in the United States established by Congress under the Biologics Price Competition and Innovation Act (BPCIA), passed in 2010 as part of the Affordable Care Act (ACA). Although action on TPP has stalled indefinitely, CLSA will continue to monitor progress on this and other trade agreements, to ensure any proposals offer intellectual property protections to U.S. innovators overseas.

Industrial & Environmental Biotechnology

Advanced and cellulosic biofuels companies are making discernible progress in bringing innovative clean fuels to consumers. The Renewable Fuels Standard (RFS) provides the policy foundation for investment and research and development in the biofuels industry and maintaining it continues to be the chief policy concern for CLSA’s industrial and environmental member companies. Weakening the RFS would have sizable impact on this new industry, and in early 2016, national stakeholders filed a petition with the U.S. Court of Appeals for the District of Columbia asking the court to review the U.S. EPA’s final rule setting 2014, 2015, and 2016 renewable fuel volumes (RVOs), which changed the methodology to fuel distribution capacity rather than supply, and fails to consider surplus from previous years.

In 2017, CLSA will continue to support proposals to reform the Toxic Substances Control Act (TSCA) on behalf of our biotechnology innovators, in order to better promote innovation in renewable chemicals, and instill confidence in consumers that such products are cleaner, healthier and safer.

Agricultural Biotechnology

Many states and localities have entered the national discussion on GMO food labeling by supporting mandatory labeling legislation, needlessly undermining consumer confidence in the safety of the U.S. food supply, and threatening to greatly harm the bioagricultural industry. In 2016, as in years past, CLSA advocated for federal solutions that inform consumers, affirm FDA as the nation’s authority on food safety, and eliminate the confusion and uncertainty created by a patchwork of GMO labeling laws.

Last summer, President Obama signed into law the Safe and Affordable Food Labeling Act, legislation that will require the nationwide labeling of GMOs in packaged foods. It also provides for a two-year delay of implementation, in order to design and implement the program at USDA. CLSA supported this compromise legislation, as it solves the state-by-state labeling challenge by establishing broad preemption over state and local GMO labeling laws while also providing consumers with reliable information under the direction of USDA without stigmatizing agricultural innovation. CLSA looks forward to monitoring the implementation of this law during the 115th Congress as well as advocating against proposals that would require mandatory labeling of GMO foods.