Funding the federal government has been a political football for the last couple of years, manifested most prominently by sequestration, raising the debt ceiling, budget continuing resolution (CR), and government shutdown. In January 2014, Congress passed an omnibus spending bill to fund the federal government through the end of the FY2014. The spending bill set a higher topline funding level per the December 2014 budget agreement, and provided sequester relief.
The White House released its FY2015 budget in early March with a number of provisions that are threats to the bio-industry. It includes a proposed reduction in the data exclusivity period for innovative biologics products to 7 years, something the Administration has been advocating for since the beginning of the Affordable Care Act (ACA) debate. Their proposal runs contrary to the ACA that specifies a 12-year exclusivity period - something settled in law. MichBio and others are worried that a reduction in exclusivity will harm innovation and disincentivize companies from developing breakthrough medicines, especially if there won't be sufficient time to recoup R&D costs.
The Administration's budget also included a 3% cut to Medicare Part B, imposing Medicaid-style rebates to Medicare Part D, and strengthening the Independent Payment Advisory Board (IPAB), all of which MichBio opposes strongly. Medicare Parts B and D are very successful programs with overwhelming approval ratings by patients, and have demonstrated cost-savings.
On a good note, the FY15 budget proposal includes language that calls for making the R&D tax credit permanent, along with the advanced biofuels tax credit. Both of these forward-looking policy measures will help companies commercialize new technologies and attract investment capital.