HINJ Issues Summary
Because federal and state government policies can greatly impact the HealthCare Institute of New Jersey’s (HINJ) member companies’ ability to develop and bring to market products and therapies, we diligently monitor a number of policy debates — both in Washington, DC and Trenton — that could have bottom-line impacts on life sciences companies.
The following are some federal and state policy topics with which we are engaged.
FEDERAL POLICY: MEDICARE REBATE
Medicare Part D, which administers prescription medicines to Medicare patients, is a successful program that has provided unprecedented access to medicines for beneficiaries while saving money for both patients and the government.
A July 2011 study prepared by Battelle Technology Partnership Practice for the Pharmaceutical Research and Manufacturers of America (PhRMA) concludes that imposing a Medicaid-style rebate into the Medicare Part D program would have a significantly negative impact on patient access to medicines as well as New Jersey’s workforce and economy.
According to the study, such a Medicare rebate could cost New Jersey 3,702 direct life science jobs and would cause 12,948 “spin-off” jobs to disappear, generating a total loss of 16,650 jobs.
Further, industry spending in New Jersey would decrease by $2.4 billion, triggering an additional $2.3 billion decrease in spin-off spending, for a total New Jersey economic activity loss of approximately $4.7 billion.
HINJ opposes the imposition of a Medicaid-style rebate on the Medicare Part D program.
MEDICAL DEVICE EXCISE TAX
As part of health-care reform, Congress passed a 2.3 percent excise tax on most types of medical devices. Medical device companies began to pay that tax in January 2013.
The excise tax is based on revenue, not profit, and will ultimately harm small-to-midsize innovative medical device companies the most. This is a devastating blow to one of the few US industries that has a net trade surplus and is responsible for millions of jobs.
The excise tax will adversely impact innovation and R&D investment for all medical technology companies, and will disproportionately impact small-to-midsize companies, which drive innovation, scientific discovery and job growth.
Estimates by Battelle show that New Jersey would lose 1,569 high-paying, high-quality jobs with a negative impact to state of NJ of $410.5 million as a result of this tax.
Because of these issues, in December 2015, Congress passed and the President signed bipartisan legislation which provided a two-year delay of this tax. At the beginning of 2018, Congress suspended the tax for another two years. And on July 24, the House voted to permanently repeal the medical device excise tax. Senate action is still needed.
HINJ supports efforts to permanently repeal the medical device excise tax.
HINJ works to ensure that all patients have access to the medicines, technologies and therapies that their doctors deem most appropriate.
HINJ also promotes wellness initiatives and medication adherence as strategies to improve health outcomes and reduce costs in the health care system.
HINJ works with policymakers and related stakeholders to make New Jersey a competitive venue for industry investment and job creation.
Economic-development issues include having a competitive tax structure, a user-friendly regulatory system and predictable permitting process and a world-class labor pool, a supportive and comprehensive network, and a collaborative higher education community.
Innovation is the life blood of the life sciences community. Changing business models require that the business and research and development (R&D) environments adapt to support the life sciences.
With a trend of ever-increasing collaboration between industry and higher education occurring, combined with government’s role in shaping the business environment, HINJ is working to bring together these stakeholders — private sector, academia and government — to build and maintain a world-class “Innovation Ecosystem” that can support innovation-driven industries in New Jersey.
HINJ co-founded InnovationNJ, a coalition of industry, higher education and government, to bring like-minded organizations together to promote and reaffirm New Jersey’s position as a historic, global leader in innovation.