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State Legislative Recap—New life science initiatives receive funding; R&D tax credits advance but don’t make it into final budget; price transparency bill dies; more than $100 million in capital funding in limbo!

 

August 9, 2017

State Budget

Everyone knew that this session was going to be about education funding. The question was how much and who would foot the bill. While a range of new revenue proposals were proposed, after three special sessions, a relatively “skinny” budget was passed that addressed education funding without increasing the B&O tax rate on services (which includes most life science companies), or adding a capital gains tax or a carbon tax. Notable life science initiatives that did make it into the final budget included:

  • $10 million for WSU’s new Medical School.
  • $5 million to maintain UW’s Medical School in Spokane.
  • UW’s Institute for Stem Cell & Regenerative Medicine received $2.25 million per year ($4.5 million for the biennium) in ongoing state funding to support research at UW’s largest interdisciplinary research institute at the University.
  • The new Cancer Research Endowment (or CARE) Fund received its second appropriation of $5 million, which means that it now has $10 million to allocate to cancer research initiatives in Washington (assuming the required matching funds are secured).

In addition to this funding, another $100 million for life science facilities was built into a bipartisan capital budget agreement, but that funding hangs in the balance because for the first time in recent history the legislature adjourned without passing a capital budget.

R&D Tax Credits and Final Budget Package

This year, we worked to advance an R&D tax incentive focused on the life science sector knowing that in the end it would come down to how much room there was for tax preferences in the final budget package.  Given the tight fiscal climate, much work was done to limit the fiscal note (cost) of the bill. Life Science Washington worked with member companies and a range of partners to present strong testimony at several hearings and legislative work sessions.

We also met with legislators individually to walk them through the findings of the Governor’s Life Science Advisory Committee report, which showed a contraction of the industry that coincided with reduced state support. We were able to work with legislators to pass the bill out of the Technology & Economic Development Committee with a unanimous (17-0) vote. 

However, the Democratically-controlled House chose not to advance any tax preferences/incentives in their budget proposal. On taxes, the Republican-controlled Senate budget package focused on reducing the B&O manufacturing rate while including a handful of small, surgical tax preferences focused on things like manufacturing, agriculture, and energy, but nothing nearly as large as the R&D tax incentive. Exercising his line item veto, the Governor vetoed the B&O manufacturing rate reduction as well as a fossil fuel tax provision that were included in the final tax package, which outraged Republicans who felt the budget package had been negotiated in good faith and agreed to by all parties. 

Drug Pricing / Price Transparency

Washington like many states saw the introduction of so called drug price transparency legislation, which would have added onerous reporting and accounting requirements for all life science companies to justify the prices of prescription drugs. Life Science Washington testified against the legislation. The legislation was modified to address the concerns we raised in our testimony before being voted out of committee. In the end, the legislation passed the House, but died in the Senate.

Capital Budget   

Due to a political impasse on rural water rights, the legislature adjourned without passing a $4.2 billion 2017-19 Capital Budget, which leaves the status of more than $100 million in life science facilities in limbo.

It's the first time anyone can remember that lawmakers have failed to adopt a construction budget. Since the spending package benefits projects statewide, bipartisan support is a given in most years. What happens next and when is not clear.

Governor Inslee announced that he will call another special session, but only once legislators reach an agreement to move forward. Don't hold your breath! The negotiating impasse is very real and lawmakers left the Capitol tired and packing plenty of hard feelings.

On a more positive note, the Senate and House did reach an agreement on a Capital Budget and should be able to act quickly, if they can find a way to resolve or sidestep the link to water policy. The State Supreme Court may force this issue again, if the high court determines $1.1 billion in school construction funding is an essential element to state compliance under the McCleary decision to fully fund basic education. Below are the facilities and the funding levels contained in the capital budget that has been agreed to by both chambers, but not passed.

WSU’s original capital budget request included more than $100 million for four life science related facilities. The agreed to capital budget includes $78.5 million for those projects. Here’s the status of each project:

  1. Plant Sciences Building (Pullman)—$52 million to complete the facility.
  2. Global Animal Health Phase II Building (Pullman)—Of the $38 million requested, $23 million was provided to start construction of the project. This would allow WSU to shell the project until the remainder of the funding could be secured.
  3. Life Sciences Building (Pullman)—$3 million for predesign/design.
  4. Life Sciences Building (Vancouver)—$500,000 for predesign.

 
UW’s capital budget items include:

  1. Population Health Education Building—$10 million for design funding for a new inter-professional education building supporting all six health science schools.
  2. Population Health Facility (IHME & Global Health)—$15 million to supplement the $210 million in philanthropic donations.

 

 


 

 

Senate Passes Food and Drug Reauthorization Act (FDARA).

 

August 4, 2017

 

As you may have heard, yesterday the U.S. Senate passed the Food and Drug Reauthorization Act (FDARA) which reauthorizes the pharmaceutical, medical device, generic drug, and biosimilar user fee agreements that expire at the end of September.


The Senate took a thoughtful and bipartisan approach to FDA Reauthorization, which will accelerate medical innovation, increase patient involvement in the regulatory process, and ultimately provide patients with better healthcare outcomes. Life Science Washington commends the Senate for completing work on this important legislation.The bill will go to the President next to be signed into law. Life Science Washington continues to play an active role in advocating for public policies that foster industry innovation and improve the lives of patients in our own communities and beyond.

Please click here to read BIO's statement on the Senate passage. We will continue to update our membership on important policy developments at state and federal levels as they happen. To learn more about our advocacy work, please contact Marc Cummings, Vice President of Public Policy and External Affairs at marc@lifesciencewa.org or (206) 456-9566. 

 


 

 

Life Science Washington President & CEO Leslie Alexandre Statement on Proposed Cuts to National Institutes of Health

 

March 16, 2017

 

“Washington state is consistently one of the largest recipients of NIH funding in the country, and these funds have fueled the growth of our region’s life science industry.  A 20% cut in the NIH budget would be a devastating blow not only to our region’s life science sector, but far more importantly, to patients who are waiting for treatments based on this research.  Life Science Washington strongly opposes these draconian and senseless cuts that would essentially shut off the faucet to the discoveries that fuel the innovations on which our industry is based.” 

 


 

Governor's Life Science & Global Health Advisory Council Report:

 

"Life Science and Global Health Development in Washington State: Future at Risk"

 

February 16, 2017

 

Over the course of a decade, Washington state made a series of targeted investments in the life science industry that helped the state become a nationally recognized leader in life science discovery and innovation. As a result, the industry became an important economic driver, supporting more than 140,000 jobs across the state.

 

The industry’s employment growth from 2001-2011 dramatically outpaced both private sector job creation in Washington and life science employment growth nationally while also providing a buffer against both recessions that occurred during that time frame. In recent years, as competitive states have doubled down on their efforts to recruit life science companies, Washington has eliminated virtually all its industry-supportive policies.

 

Today, Washington’s life science industry shows signs of stagnation, including a decline in jobs, and industry leaders are questioning the state’s commitment to retaining and growing one of its most impactful industries.

 

Full Report:  Advisory Council Report, Appendix AAppendix B

Fact Sheet: Advisory Council Report Fact Sheet

 

Additional Resources: Washington State Department of Commerce One Pager

 

 


 

Direct Engagement with Legislators is Critical 


Throughout 2017, Life Science Washington will focus on smaller, personal engagements with legislators and policy makers.

 

To help us implement this more personal approach, please send us an email if you have a personal relationship with a member of the legislature so that we can include you in those conversations. Likewise, if you or your company would like to host a round-table discussion at your facility, please let us know and we will get in touch with you to coordinate the details.

 

Life Science Washington will handle everything! You just need to do what you do best — show how your company is developing products that improve people’s lives!


If you would like to be part of this year’s engagement strategy, please email Marc Cummings, your Vice President of Public Policy & External Affairs at marc@lifesciencewa.org

 


 

Drug Pricing is in the News; Here's What You Should Know

 

Recently, news and political discourse about the healthcare and pharmaceutical industry has been dominated by discussions about the cost of drugs.  To address this issue, the Biotechnology Industry Association (BIO) developed a comphrensive website designed to help people better understand how drugs are priced and the risk that is undertaken to bring life-saving cures and innovative therapies to market.

 

 Visit www.drugcostfacts.org for more information. 

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