BioHive speakers: Divided Congress not all bad for life sciences industry

Brice Wallace 

Perhaps file it in the “no news is good news” category.

Having a federal government split along party lines probably lessens the likelihood of the life sciences industry being blindsided by legislation or regulation being pushed by one party or the other. It also means an uphill battle for beneficial legislation if there is even the slightest hint of controversy.{mprestriction ids="1,3"}

That’s the conclusion of a couple of political insiders who spoke at the recent BioHive Summit in Salt Lake City. While a flurry of riders still could be added to must-pass bills before the end of the year, a new Congress in 2023 — a Senate controlled by Democrats and a House by Republicans — could mean few bills advance to passage, leaving the industry generally in status quo.

“Basically, that means gridlock,” said Nick Shipley, executive vice president and chief advocacy officer at the Biotechnology Innovation Organization, a biotech company trade association. “Biden’s still going to be president, still has the veto pen. No one is getting close to overriding a veto in this. That means good for defense, bad for proactive legislation.

“So, if we’re thinking about things like, ‘I need to do legislative fixes on the Inflation Reduction Act,’ that’s going to be extremely hard. If you’re thinking, ‘I want to get that R&D tax amortization next year,’ that’s going to be very hard.”

Shipley said that next year, the only way to get things done in a divided government is to have a big bill in which Pres. Biden is willing to include “small, reasonable” GOP pieces in order to attain his legislative priority.

“That’s kind of the scenario we’re looking at,” Shipley said. “You’re not going to see what led us to the IRA, the Inflation Reduction Act … where it just steamrolled through by one party.”

Jeff Kimbell, CEO of Jeffrey J. Kimbell & Associates Inc., with over 60 clients in life sciences seeking legislative and policy remedies in Washington, D.C., said each party has suffered some setbacks. On the Democrat side, Biden remains unpopular and the party lost the House of Representatives. Meanwhile, Republicans gained control of the House but had expected a much bigger majority than it will have.

Shipley said that healthcare “has not been a winner” for Republicans, who instead prefer to talk about taxes, the economy, crime and other issues.

“This is a real challenge if you imagine a world where you need to get leading legislators on the Hill to push forth policy solutions in the healthcare space, and that’s something that we’re all going to grapple with over the next two years, at a minimum, to try and figure out,” he said.

“Because right now, it’s a tough slog. You’ll get that good meeting [with elected officials], they’re all going to say they’re pro-innovation, and then they’re going to not want to carry the torch in a public way for you.”

Both Shipley and Kimbell stressed that life science company officials and their representatives have a unique opportunity to inform federal officials about the industry, its needs and its priorities. Kimbell noted that 20 percent to 25 percent of the Senate and House will be freshmen legislators.

“There is going to be a lot of opportunity to educate them on the issues that affect life sciences, medical device issues, biopharma, gene therapy, cell therapy” and others, he said.

It’s incumbent on industry leaders to meet with them, brief them about issues and even have them visit Utah life sciences facilities, Kimbell said. Those leaders should host events such as forums and town halls as well.

Shipley said Utah’s life sciences industry “has a great story to tell,” with strong numbers related to employment, economic impact and venture capital investment. However, elected federal officials may not know that story because their experience might have been as a sheriff, Realtor or state legislator rather than a bench scientist or entrepreneur, he said.

“They don’t know what they don’t know,” Shipley said. “You have to educate them. You have to talk to them. Otherwise, it is just pretty unreasonable to expect that they will intrinsically know what are the right policies they should be putting out there to grow a kind of medtech hub, a biotech hub. They don’t have a history there. There’s no reason we should expect them to.”

With federal government in a state of gridlock, it’s likely that states will be a more important avenue for legislation affecting the industry. At the federal level, there might be movement to use the tax code to stimulate spending and investment that the Biden administration would like to see, perhaps in medtech or “green” technology, Shipley said.

“I think those are the types of things you’re more likely to see in the next two years, but it could be few and far-between,” he said. “Split government usually doesn’t get a lot done. I would really keep an eye on the states.”{/mprestriction}