SAF tax credits, VBPs, and BIO in Paris

A newsy Wednesday: Treasury and the IRS released updated SAF tax credit guidance, a new bill would facilitate value-based drug payments, and a BIO delegation to Paris highlighted Franco-American biotech cooperation. (767 words, 3 minutes, 50 seconds)

New guidance on tax credits supports SAF development

The Treasury Department and Internal Revenue Service issued updated guidance yesterday on determining tax credits for producers of sustainable aviation fuels (SAFs).

Why it matters: The Inflation Reduction Act provides a tax credit of $1.25/gallon for SAFs that reduce lifecycle greenhouse gas (GHG) emissions by 50%, with additional credits for exceeding a 50% reduction. However, lifecycle GHG measurements were outdated.

Hello GREET: The new 40B SAF-GREET 2024 model measures GHG emissions using a modified version of the “gold-standard” Argonne National Laboratory’s GREET methodology, which BIO supports.

SAFs from corn and soybeans must meet the additional requirement of growers using a “bundle” of Climate Smart Agriculture (CSA) practices detailed in a U.S. Department of Agriculture pilot program (no-till, cover crop, and enhanced efficiency fertilizer for corn), the Treasury Department said.

What’s next: CSA requirements are included “on a pilot basis,” and regulation will be further developed for 2025, the Treasury Department said.

BIO’s view: The updated methodology “is a positive step toward meeting the rapidly growing demand for SAF and leveraging agricultural innovation to make air transportation cleaner and greener,” said Beth Ellikidis, BIO VP for Agriculture & Environment. “Biotech innovation is a critical tool to help farmers adopt climate-smart agricultural practices to qualify their crops as tax credit-eligible SAF feedstocks.”

Bipartisan Senate MVP Act introduced — BIO supports

Bipartisan legislation introduced yesterday would permit manufacturers to enter into voluntary value-based purchasing (VBP) arrangements with state Medicaid programs, promoting patient access to innovative cell and gene therapies. BIO supports it.

Why it matters: VBP agreements compensate drug manufacturers when treatments provide measurable patient benefits, such as reduced hospitalizations, but provide rebates to states when a drug has failed to meet outcomes metrics. The legislation codifies current regulations permitting VBP arrangements.

The Medicaid VBPs for Patients (MVP) Act was introduced in the Senate by Sens. Markwayne Mullin (R-OK), Kyrsten Sinema (I-AZ), Tim Scott (R-SC), and Maggie Hassan (D-NH). A House companion led by Energy & Commerce Health Subcommittee Chair Brett Guthrie (R-KY) and Ranking Member Anna Eshoo (D-CA) passed the Energy and Commerce Committee last May.

What they’re saying: “Value-based purchasing better aligns our health care system towards patient care,” said Sen. Mullin. “By linking the cost of treatments to patient outcomes, VBP arrangements give rare disease patients access to life-saving care options.”

BIO in Paris

A high-level BIO delegation to Paris last week highlighted Franco-American cooperation in biotech, providing a chance to discuss key investments and policy issues to enhance sectoral collaboration and innovation.

What: In collaboration with Business France, the global business relations arm of the French government, BIO organized a high-level delegation of members for two days of meetings with government and industry, including Roland Lescure, France’s Minister of Industry and Energy, and health advisors to President Emmanuel Macron at the Elysée Palace, among others.

Who: The delegation was led by Scott Koenig, CEO of MacroGenics, BIO Board Member and Co-Chair of the International Committee of the Board, and John Murphy, BIO’s Chief Policy Officer. Other participants included BeiGene, Amgen, Johnson & Johnson, AstraZeneca, and PTC Therapeutics.

A key takeaway: France 2030, which aims to transform and revitalize sectors of the French economy, will allocate €54 billion towards key sectors, including biotech. 

Other topics of discussion:the revision of the EU Pharmaceutical Legislation, data privacy challenges and cross-border data flows at the EU and France levels, and pricing and reimbursement issues. Sanofi also hosted the delegation for meetings—led by BIO Board member Deborah Glasser—with leaders from the Paris Saclay Cancer Cluster, one of the biotech clusters supported by Sanofi and the French government.

“The recent visit of BIO to Paris marks a significant milestone in the Franco-American biotech collaboration,”said Jérôme Revole, Managing Director for Healthcare at Business France North America. “The discussions with a wide range of high-level officials and key stakeholders of the French Healthcare ecosystem over these two days have set the stage for a growing collaboration on important topics of mutual interest.”

BIO’s take: “Over the course of two days, we were thrilled to learn that the French government and industry are working together to further strengthen France’s biotech sector,” said BIO Chief Policy Officer John Murphy. “BIO is keen to support our French industry partners and the government as they implement the goals of France 2030 as cross-border collaboration with allied countries is critical to the success of the U.S. biotech sector.”

Read more in Bio.News.

President Biden’s Wednesday: Participating in a campaign reception in Washington D.C.

What’s Happening on Capitol Hill: Environmental Protection Agency (EPA) Administrator Michael S. Regan will testify on the 2025 budget proposal before the Senate Appropriations Committee. U.S. Department of Agriculture (USDA) Under Secretary Robert Bonnie will testify before the House Appropriations Committee about USDA’s fiscal 2025 request for the U.S. Department of Agriculture’s Farm Production and Conservation mission.