The biotech-focused provisions in the reconciliation bill prioritize R&D, patient affordability

The One Big Beautiful Bill Act – the “reconciliation bill” being considered by Congress – features policies that are crucial for driving American innovation.

The efforts are longstanding priorities of the Biotechnology Innovation Organization (BIO) – and the patients who depend on a sustainable and productive industry – because they offer one of the most profound win-wins in American politics: bipartisan solutions that incentivize R&D while maximizing patient benefit.

Taken together, the biotech-focused elements of the bill would help move the health care system toward one better able to deliver personalized medicine with the ability to drive better health for Americans.

Creating a robust environment for research and development is a key policy goal, and the legislation boosts that effort in three critical ways:

• It includes the text of the ORPHAN Cures Act, a simple fix to one of the Inflation Reduction Act’s many serious flaws. While the IRA provided an exemption from government price controls for some medicines targeted at orphan populations, that protection was limited to drugs that treat just one rare disease. ORPHAN Cures ensures that medicines treating multiple rare diseases – but only rare diseases – also receive the exemption, removing a roadblock to further development of promising approaches for rare disease patients.
• The legislation also allows for the immediate tax deduction of research and development costs. That’s critical for an industry where companies can spend hundreds of millions of dollars on R&D without making a dime on revenue. Being forced to amortize those expenses over five years means higher tax bills for the companies that can least afford it, punishing firms for going all-in in the pursuit of breakthroughs.
• There is a do-no-harm aspect to the bill as well: It does not include further cuts to the Orphan Drug Tax Credit. Orphan Drug Tax Credit is one of the foundational incentives for orphan drug development, and lawmakers have tried to chip away at it over the years. Its exclusion from the reconciliation package is a victory for patients.

Positively reshaping the R&D environment is important to ensuring future cures are critical, but improving the ability of patients to afford today’s breakthroughs is also important. That’s why access provisions in the bill are also critical for patients:

• There is extensive PBM reform baked into the legislative text, including provisions that would delink PBM compensation from list prices and thereby discourage PBMs from demanding higher prices. It would also bar spread pricing in Medicaid and increase transparency.
• The package also includes the provisions in the Accelerating Kids’ Access to Care Act, which removes barriers that stand in the way of patients insured by Medicaid seeking care in other states. That is critical for rare disease patients who may have to travel to access specialized care — such as gene therapy or cancer treatment — that is only available at certain specialized centers.

BIO’s View:  “We need common-sense solutions to our health care system that will deliver more cures, more quickly, with fewer barriers from middlemen and bureaucrats,” said BIO President & CEO John F. Crowley. “Efforts to incorporate these solutions into legislation should be a priority for lawmakers who want to ensure America’s leadership in biotechnology innovation.”