What you missed on IP, SAF tax credits, drug prices

Happy 2024! Today, we have news you might have missed over the holidays: 19 House Democrats oppose expanding the COVID IP waiver, the IRS issues new guidance on SAF tax credits, and BIO talks PBMs and drug prices. (557 words, 2 minutes, 47 seconds)

19 House Democrats oppose expanding COVID IP waiver

Before the holidays, 19 House Democrats sent a letter to the U.S. Trade Representative (USTR) voicing opposition to a proposed expansion of the waiver of IP rights for COVID vaccines.

Why it matters: Last year, USTR agreed to a WTO waiver of IP rights for COVID vaccines. Now, USTR is considering expanding the waiver to include COVID diagnostics and therapeutics.

IP waivers aren’t needed: The COVID vaccine IP waiver was never used because IP was never a barrier to global distribution, says the letter, which was organized by Rep. Brad Schneider (D-IL).

BIO briefed lawmakers: Several signatories are members of the New Democrat Coalition, which recently organized a briefing on the proposed waiver.  BIO member company SAb Biotherapeutics participated and was able to explain the importance of strong IP protections to robust innovation. 

What they’re saying: “Our robust IP protections are a critical reason why the U.S. remains at the forefront of biopharmaceutical innovation; any efforts to undercut U.S. IP protections puts millions of U.S. jobs, from STEM research to manufacturing and distribution, and decades of American leadership, at risk,” the letter says.

IRS issues new guidance on SAF tax credits

ICYMI: The Biden administration issued new guidance on measuring greenhouse gas reductions for sustainable aviation fuel (SAF) tax credits—and officials are considering an updated measurement supported by BIO.

Incentivizing SAF: The Inflation Reduction Act provides a tax credit of $1.25/gallon for SAFs that reduce lifecycle GHG emissions by 50%, with additional credits for exceeding a 50% reduction.

How we’ve measured reductions so far: Through the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which has been criticized as outdated and inaccurate. The IRS and Treasury announced last month they will allow the use of the Environmental Protection Agency (EPA) Renewable Fuel Standard, which is similar to CORSIA.

Hello GREET: The proposed GREET Act, which BIO supports, would require EPA to use the gold-standard Argonne National Laboratory’s GREET methodology when assessing carbon reductions.

What’s next: The IRS said last month the Department of Energy and other federal agencies are collaborating on a modified version of the GREET model that would meet statutory requirements and could be used to determine SAF tax credits.

BIO’s John Murphy: Real numbers tell real value of new drugs

Meaningful discussion of drug costs and benefits requires accounting for rebates, BIO Chief Policy Officer John Murphy explained in RealClearHealth.

“Typically, manufacturers give enormous discounts to middlemen”—pharmacy benefit managers—to obtain insurance coverage for their drugs, Murphy says. These discounts, often given as rebates, must be considered in weighing the true cost of a drug.

Huge savings: “In 2022, drug manufacturers offered $223 billion in rebates and discounts off the nominal’ list’ prices of brand-name medicines—nearly half the official total spending on prescription drugs,” Murphy notes.

The reality: As an example,  the Institute for Clinical and Economic Review (ICER) estimated the new anti-obesity drug Wegovy would cost $13,000 a year, but it really costs about $6,500.

The bottom line: “With potentially millions of Americans’ health on the line, it’s critical that we all share the same basic set of facts,” Murphy writes. “Yes, innovation is expensive—but it’s often worth it. Let’s stop blaming the innovators.”

Read and share the op-ed.

President Biden’s Tuesday: Returning to the White House after a holiday break in St. Croix, U.S. Virgin Islands.

What’s Happening on Capitol Hill: There are no hearings scheduled this week. Congress faces deadlines on spending legislation this month, per The Hill.