Q3 Newsletter 2024

Pharmacy benefit manager (pbm) transparency and reform

The Federal Trade Commission (FTC) released an interim report titled “PBMs: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies.” Additionally, in July, The House of Representatives Oversight and Accountability held a committee hearing entitled:  “The Role of Pharmacy Benefit Managers in Prescription Drug Markets Part III: Transparency and Accountability.” Executives from the three biggest PBMs — CVS Caremark, OptumRx and Express Scripts — testified in front of and continue to receive scrutiny in a bipartisan and bicameral manner.  Also this summer, The Wall Street Journal and New York Times have highlighted the roles that PBMs play in the overall cost at the pharmacy counter.

Life Sciences PA joined State and National partners, including We Work for Health with the following unified message: Governor Josh Shapiro recently signed HB1993, which was a bipartisan effort that gives the Pennsylvania Insurance Department the authority to regulate PBM practices and contains several important protections that will result in lower out-of-pocket costs for prescription medications. We are thankful for the leadership in Pennsylvania for this critical patient protection against PMBs, but it’s not enough – we need federal legislation as well. Life Sciences Pennsylvania strongly supports the following legislation to reform pharmacy benefit managers (PBMs) for increased transparency and to lower costs of medications for patients in Pennsylvania: S.2973: The Modernizing and Ensuring PBM Accountability Act and H.R.2880: The Protecting Patients Against PBM Abuses Act.

Pediatric Disease Priority Review Voucher Program

Life Sciences Pennsylvania has worked with patient advocacy groups, here in Pennsylvania and across the country, to encourage swift passage of S.4583  The Creating Hope Reauthorization Act of 2024. This critical legislation, championed by US Senator Bob Casey (D-PA),  would reauthorize the Rare Pediatric Disease Priority Review Voucher Program (PPRV) which incentivizes the development of novel therapies to treat pediatric rare diseases. By the end of the year, the Pediatric Priority Review Voucher will expire, and a lapse in this program will negatively impact some of the most vulnerable patients suffering from diseases for which there are no cures or treatments. On behalf of innovators across Pennsylvania, working every day to address unmet patient needs, we encourage urgent passage of this crucial legislation. Since the start of the PRV program in 2012, it has awarded 53 vouchers for 39 rare pediatric diseases that have led to innovations benefitting over 200,000 vulnerable patients. The pediatric PRV program has been reauthorized with bipartisan support twice since its inception, both in 2016 and 2020.

Taxes and R&D Amortization

On August 1, the Senate failed to advance (48-44) a tax package that included a 4-year retroactive delay of R&D amortization. While the bipartisan deal passed the House (357-70) in January, the bill remains stalled in the Senate due to concerns unrelated to the R&D deduction provision. For procedural purposes Leader Schumer changed his vote to “no” so he has the option to bring the bill up again for another vote in the future.

Medical Devices and Diagnostics (TCET)

On August 12, 2024, the CMS Transitional Coverage for Emerging Technologies (TCET) rule was published in the federal record. Unfortunately, the changes that LSPA, along with our federal partners have advocated to see implemented, have not gone far enough for the medical technology companies who have worked for years to receive FDA approval, or for the Medicare patients who deserve rapid access to these innovative medical technologies. Earlier this summer, the Ways & Means Committee of the U.S. House of Representatives voted in a bipartisan manner to approve H.R. 1691, the “Ensuring Patient Access to Critical Breakthrough Products Act of 2023.” This act would ensure FDA-approved breakthrough technologies are. Life Sciences PA will continue to work with our national trade association partners and members of the Pennsylvania delegation toward passage in the full U.S. House of Representatives.

Education on the Value of Innovation

Life Sciences PA hosted Representative Mary Gay Scanlon and her Congressional staff for a tour of one of our Member companies (SK Pharmteco)  in the newest part of her district (King of Prussia. She had the opportunity to see the science happening up close and understand the value of our innovation ecosystem.   Life Sciences PA also joined Congresswoman Mary Gay Scanlon to meet with leading Academic Research Institution, the Wistar Institution in Philadelphia on (9/16/2024) and meet with leadership as well as students participating in the Biomedical Technician Training (BTT). This Program allows students at different stages of their education and career to prepare for positions as laboratory technicians and research assistants in both academic and industry labs. Trainees acquire the skills necessary to carry out basic discovery research and contribute to the development of novel biotechnology and pharmaceutical products. After completion of the BTT Program, graduates are placed with companies and fully contribute to the thriving life sciences ecosystem in Pennsylvania. 

Noctrix Health, Inc., a leader in innovative treatments for Restless Leg Syndrome (RLS), held a ribbon cutting ceremony for its new facility in Oakmont with U.S. Representative Chris Deluzio.

Sbir Matching Program

Life Sciences Pennsylvania is pleased Representative Paul Takac (D-Centre County) introduced legislation – SB 2472 – that will create an SBIR/STTR Matching Program in the Commonwealth of Pennsylvania.

Many life sciences companies rely on SBIR (Small Business Innovation Research) and STTR (Small Business Technology Transfer) funds as a critical source of non-dilutive funding to advance research and development for novel medicines and technologies. Because these federal funds are crucial to innovation many states have created matching programs to provide additional, dedicated funds to early stage, innovative companies. LSPA thanks Rep. Takac for his leadership on this issue and looks forward to working with him and his colleagues to bring a state matching program for SBIR/STTR funding to Pennsylvania’s life sciences ecosystem.

Pa budget passed

The Pennsylvania House and Senate passed, and Governor Shapiro signed, the General Appropriations Act (SB 1001), Fiscal Code (HB 2310), Tax Code (SB 654), and School Code (SB 700) July 11. These bills comprise the commonwealth’s budget for fiscal year 2024-25.

The final overarching agreement includes approximately $47.6 billion in General Fund expenditures. This represents an increase of approximately $2.68 billion over last year’s General Fund expenditures.

The budget includes a provision to increase the net operating loss (NOL) carryforward limit from 40 percent to 80 percent via a graduated, 10 percent per year increase, over the next four years. This change helps create a tax climate that incentivizes innovative, start-up companies, but it was disappointing to see the carryforward limit not applied to existing NOLs.

In addition to the NOL changes, several of Life Sciences Pennsylvania’s budget priorities are maintained at current levels and one new program, PA SITES, was passed as part of this year’s budget. Unfortunately, the PA Innovation fund was not included in this year’s budget proposal. A readout on the budget priorities and funding for additional programs of interest to the life sciences are as follows:

• PA SITES (Strategic Investments to Enhance Sites Program) was included and funded at $500 million
• The Research & Development Tax Credit is funded at its current level of $60 million
• The Ben Franklin Technology Partners maintain total funding of $17 million
• The budget continues to provide $3 million to the three ($1 million each) Life Sciences Greenhouses to fund early-stage, innovative life sciences companies
• Consistent with past years, the budget provides for up to $15,000,000 in Keystone Innovation Zone (KIZ) tax credits worth up to $100,000 for qualified firms
• The biotechnology research line item was increased to $11.2 million
• 6 percent of the state’s annual tobacco settlement payments are directed to the Commonwealth Universal Research Enhancement (CURE) Program in the Department of Health to fund research projects conducted by Pennsylvania-based researchers, universities, medical schools and other institutions. This year’s budget continues allocations from the CURE dollars specifically for spinal injury research, pediatric cancer research and equipment grants for biotechnology research

These budget items comprise several of Life Sciences Pennsylvania’s state legislative priorities that maintain investment in innovation and life sciences growth. LSPA will monitor legislative developments for updates and/or clarifications on any additional life sciences-related programs as the legislature likely concludes its 2023-24 legislative session.

US-asean business council

July 11, 2024

Life Sciences Pennsylvania was honored to partner with the World Trade Center of Greater Philadelphia to host the US-ASEAN Business Council and Ambassadors from Indonesia, Cambodia, Laos, Singapore, Vietnam, and Brunei at the King of Prussia office. At the meeting, ambassadors received an overview of Pennsylvania’s life sciences community and heard directly from member organizations showcasing the depth and breadth of Pennsylvania’s life sciences ecosystem to this important international delegation. These international visits are an important opportunity for Life Sciences PA and its members to develop new, international relationships that help foster growth in the commonwealth and beyond.

PBM Reform 

July 17, 2024

The Pennsylvania Senate and House passed HB 1993 July 11 and Governor Shapiro signed the legislation July 17. This legislation reforms the ways in which Pharmacy Benefit Managers (PBMs) operate in Pennsylvania. The cost borne by patients for prescription medicines is the result of a complex drug pricing supply chain and this bill focuses much of its attention on the dynamic between PBMs and pharmacies/pharmacists. This was an issue Governor Shapiro highlighted in his February budget address.

As the state trade association representing entities involved in researching, developing, and manufacturing prescription medicines LSPA monitored this legislation closely. Our members are not the focus of this legislation, but its important to recognize and appreciate the efforts of community and independent pharmacies to ensure they can appropriately provide the medicines Life Sciences PA members develop to the patients they serve.

Community and independent pharmacies operate and serve patients in rural and underserved communities, but face reimbursement challenges given the complex nature of the pharmaceutical supply chain. This legislation will ensure those pharmacies remain open to the patients that depend on them for prescription medications and shed light on how various intermediaries – from the manufacturer to the pharmacy – affect the ability of patients to access the medicines they need. Among many things, this legislation will:

• Require pass through to a health benefit plan no less than 95% of any rebate from a prescription drug manufacturer
• Prohibit steering practices unless certain conditions are met (e.g. lower costs for covered individuals)
• Require PBMs to provide to the Pennsylvania Insurance Department information pertaining to aggregate rebates obtained and retained by a PBM along with fees charged by the PBM
• Requires the Pennsylvania Insurance Department to conduct a study reviewing the impact of rebates on the cost of prescription drugs and whether rebates should applied at the point of sale
• Expands pharmacists’ scope of practice for certain injectable medications

Life Sciences PA will continue to monitor legislative activity in Harrisburg related to the cost of prescription medicines.

house policy committee hearing

august 1, 2024

The PA House Republican Policy Committee held a hearing on “Healthcare Options for Small Businesses” in Moon Township. Life Sciences PA was pleased to have Kurt Imhof, Sr. VP, Policy & Public Affairs, and Howison Schroeder, CEO and co-founder of Neuro-Innovators testify at this hearing in support of association health plans (AHPs) – one of LSPA’s state policy priorities. Thank you to Policy Committee Chair, PA Representative Josh Kail, and PA Representative Valerie Gaydos for hosting and supporting this hearing.

Approximately 65 percent of the more than 3,000 life sciences establishments in Pennsylvania employ 10 individuals or fewer. Given the long odds, and the resource-intense process of researching and developing a medicine or technology, LSPA member companies are acutely aware of their financial wellbeing.  One of the ways Life Sciences Pennsylvania seeks to assist its members, and those balance sheets, is through our group purchasing programs.  AHPs are a type of group purchasing program whereby small companies can band together to obtain the same purchasing power as large corporations. The discounts offered through these programs provide cost savings, freeing up financial resources to recruit and hire key employees or make important capital investments – ultimately helping entities develop novel cure, medicines or devices.  

Unfortunately, Pennsylvania does not currently allow for the offering of AHPs. This hearing was an important opportunity to highlight why – by making Association Health Plans a cost-savings offering for organizations like LSPA – Pennsylvania will be providing life sciences companies and organizations a critical financial and quality of life incentive to locate and grow in the Commonwealth. 

adare pharma solutions hosts ribbon cutting for headquarters relocation 

September 20, 2024

Life Sciences PA was thrilled to attend a ribbon cutting for the relocation of member Adare Pharma Solutions’ headquarters to Philadelphia from New Jersey. This move brings 115 new jobs to Philadelphia, and creates an anchor for the life sciences community in Northeast Philadelphia. Attendees heard remarks from Adare CEO Tom Sellig, the various economic development organizations that assisted in the relocation, and an ecosystem overview from LSPA President & CEO Chris Molineaux. Following the ribbon cutting, Adare employees hosted tours throughout the facility to showcase the important work being done in these new facilities.

Executive Dinner in pittsburgh (invite only)

july 11, 2024 | pittsburgh, PA

C-suite level executives gathered at the Energy Innovation Center in Pittsburgh for an invite-only networking event. Members had a chance to connect with new faces and reconnect with familiar ones and listen to a fireside chat with serial life science entrepreneur, Steve Tullman.

open house

August 1, 2024 | King of Prussia, PA

LSPA members were able to use the Center to network and converse with other members over coffee and baked goods. Do not miss the next Open House on October 22 for more opportunities to build your network.

Meet the leaders

August 13, 2024 | King of Prussia, PA

The leaders of NexEos Bio and Uniquity Bio united to speak about the distinctive paths taken to be successful in the industry. This panel event featured Theresa Mansi, Co-founder & CBO of NexEos Bio, Steve Tullman, Co-founder, CEO & Chairman of NexEos Bio and Co-founder & Executive Chairman of Uniquity Bio, Lou Manzi, Board Member of NexEos Bio and Head of Strategic HR of Uniquity Bio, and Lisa Wittmer, PhD, CDO of Uniquity Bio.

LSPA day at the park – pittsburgh

August 22, 2024 | pittsburgh, PA

LSPA members enjoyed a day at the ballpark for the Pittsburgh Pirates vs. the Cincinnati Reds game. This casual networking event provided food and drinks with a rooftop view of the action.