The 2021 state legislative session was one of the most unusual sessions in history—being conducted completely virtually. Nevertheless, Life Science Washington’s public policy and lobbying team was able to work with our partners and legislators virtually to achieve all of LSW’s legislative goals for the session.
We were able to obtain funding for new life science facilities at colleges and universities across the state, secure exemptions for the industry in a number of bills that would have created significant compliance challenges for life science companies, stop ill-conceived drug price review legislation, and make sure that no new taxes were imposed on the industry. We also worked closely with legislators to keep them up to date on all the great things that local companies are doing to combat COVID while also making sure that life science companies with employees that worked in healthcare facilities or with COVID samples were prioritized for early access to vaccines. Below is a complete summary of the issues that Life Science Washington was working on this session.
LSW Priority State Budget Priorities
The budget items below were fully funded at the amounts listed below:
Shoreline Community College Health, Science & Advanced Manufacturing Building — $47.4 million
Life Sciences Building at WSU-Vancouver — $52.6 million
Andy Hill CARE Fund — $11.7 million
Governor’s Life Science Sector Lead — Position funded
WSU Elson Floyd College of Medicine — $3.6 million to complete funding for the third and fourth year of the 20-seat expansion. This completes funding for four classes of 80 students each at the Elson S. Floyd College of Medicine.
Priority State Legislative Issues & Bills
Payroll Tax Avoided — Over the summer, state tax revenue was down due to the pandemic and there were serious discussions about adding a new payroll tax. We worked with the lawmakers to help them understand the disproportionate impact such a tax would have on life science companies and they indicated an openness to exempting life science companies. However, as the session got underway the budget picture had improved significantly. By the end of session, state revenue collections had rebounded to pre-pandemic levels and the payroll tax was never heard in committee.
While the payroll tax didn’t receive a hearing, Democrats did pass a capital gains tax (SSB 5096). The legislation creates a 7% capital gains tax, with the first $250,000 of capital gains excluded along with exemptions for the sale of a home, commercial real estate, retirement accounts and other properties. This bill is projected to generate $550 million/year in new revenue that will go into a new account to support early learning, childcare, and education. The tax is being challenged in court.
COVID Health Data Privacy Bill (HB 1127) — HB 1127 sought to place greater privacy protections on COVID health data in order to increase people’s comfort using COVID contact tracing apps. The bill restricted a covered organization’s ability to collect, use, or disclose COVID-19 health data. A covered organization did not include a health provider, a health facility, or a public health agency. However, we felt that the bill would also capture clinical trial data and FDA reporting data. We worked with the bill sponsors to successfully amend the bill to include most of the same exemptions that were included in the Consumer Privacy Bill. The bill passed the legislature but was vetoed by the Governor.
Right-To-Repair Legislation (HB 1212) — HB 1212 required original manufacturers of digital electronic products to allow third parties to repair their devices. We were successful in getting medical devices exempted from the bill. Ultimately, the bill failed to advance out of committee, but will likely be back next year.
Unsupported Drug Price Increase Legislation (SB 5020) — SB 5020 authorized the Health Care Authority (HCA) to impose a fine on biopharmaceutical manufacturers if their products were judged to have an “unsupported price increase” as determined by the Institute for Clinical and Economic Review’s (ICER) Unsupported Price Increases (UPI) Report.
LSW joined BIO in opposing this bill because SB 5020 would have outsourced the review of prescription drug prices to a non-governmental entity that is not accountable to the public or elected officials. SB 5020 passed the Senate Health & Long-Term Care Committee but did not advance any further.
Data Privacy (SB 5062) — The Senate passed a comprehensive data privacy bill with only one dissenting vote. The bill contained all of the healthcare data exemptions that LSW and our coalition proposed. However, the bill died in the House. On a positive note, the healthcare data privacy exemptions that we developed for this bill have become model legislation. AdvaMed is encouraging all of their state affiliates to use the language developed for the bill and it has been included in legislation in several states including Minnesota, Utah, Virginia, and Colorado.
Limiting Toll Bonding on I-405 (SB 5232) — In 2019, ESSB 5825 passed, which authorized both tolling on the I-405/SR 167 Express Toll Lane (ETL) and Puget Sound Gateway facilities, and the issuance of up to $1.5 billion in bonds to fund various project priorities. SB 5232 would have repealed this toll bond authorization for the Interstate 405/State Route 167 Express Toll Lanes and the Puget Sound Gateway facility. This would have put the critical improvements to the Canyon Park life science cluster at risk. We worked with a coalition of suburban municipal governments and chambers of commerce to oppose the bill. SB 5232 passed the Senate but died in the House.
Vaccine Eligibility — LSW wrote a letter and worked with the State Department of Health to ensure that life science employees that were working in healthcare facilities or working with COVID samples were prioritized in Phase 1a to receive access to vaccines along with healthcare workers.
Breakthrough Medical Device Legislation / CMS MCIT Rule Finalized and then Put on Hold — It has been a long journey working with Rep. DelBene, AdvaMed, MDMA, and CMS to provide a coverage and reimbursement pathway for innovative medical devices at CMS. After years of work on the issue, CMS published a final Medicare Coverage of Innovative Technology (MCIT) rule in the Federal Register on Jan. 14. The rule provided a new streamlined coverage and payment pathway for FDA-designated breakthrough medical devices (and diagnostics).
Since the rule was finalized in the last few weeks of the Trump Administration, it was subject to a review by the incoming Administration. Despite a letter from a number of House Democrats—led by our own Rep. DelBene—urging CMS to keep the rule in place, the Biden Administration decided to put the rule on hold until Dec. 15, 2021. CMS has expressed a variety of concerns with the current rule, which will now need to be worked out before any new rule is implemented.
Bothell/Canyon Park Redevelopment — After several years of work to develop a plan for modernizing Canyon Park, which is home to a thriving life science cluster, the Bothell City Council voted unanimously to approve the plan and associated zoning changes. Life Science Washington co-hosted several meetings with the city to allow local companies to provide input to the plan. That input was crucial to the development and direction of the final plan, which makes growing the life science cluster a central element of the plan. LSW was also successful in petitioning the city to not place new height limits on life science buildings in the Canyon Park business park, which could have restricted the ability of companies to expand. With the new regulations in place, the city will now turn to addressing transportation and other issues. Details will matter. The city wants to partner with local companies; however, they tend to hear more from local retailers than life science companies that often have very different needs. So, if you have facilities in Canyon Park, please engage with LSW and the City of Bothell to ensure that the needs of life science companies in the area are heard.