Legislative Session: Near Misses, Notable Successes for Bioscience

From the perspective of the biopharma sector, the 2025 General Assembly session was fraught with many near misses and some notable successes.

At its peak in February, the Bioscience Growth Council was monitoring and weighing in on over 130 bills. At the close of session there were still 29 bills in play.

Perhaps the most consequential win was an increase in the “refundable” research and development tax credit, which was included in the new two-year state budget adopted by the legislature.

The rate rises to 90% for biotechnology companies and the credit remains at 65% for other qualified technology companies.

This credit allows companies to “trade in” R&D tax credits they’ve earned for cash before they have revenue against which to apply the credit.

Tax Credit a CBIA Priority

This refundable R&D tax was a Connecticut innovation, conceived by technology trade associations and successfully advocated before the General Assembly by CBIA.

As an economic development tool, the credit is highly effective and was emulated by several states.

Other states, including New York and Massachusetts, have raised their refundable credit to levels higher than 65%, and it has been a priority of CBIA’s Bioscience Growth Council and Tax Council to match or exceed what other jurisdictions have done.

It is gratifying to see the tax credit increase finally adopted.

We led the effort over several sessions, and it is gratifying to see the tax credit increase finally adopted.

In many ways the capstone of the session was the General Assembly’s passage and enactment of HB 6771, which requires health insurance coverage for biomarker testing.

Biomarker testing represents the future—with the use of genetic biomarkers to diagnose, treat, and manage disease patient outcomes will improve dramatically and the overall healthcare system will be made more efficient.

Pharma Rep Information

Another “win” was a clause included in HB 7179 that removes the requirement that the Department of Consumer Protection prominently display the personally identifiable information of pharmaceutical sales representatives.

The legislation changes information shown on the DCP website to simply the first name and last name initial of pharma representatives.

This change was a victory for common sense.

In these times of increased security concerns, this change was a victory for common sense.

The legislature also approved SB 10, which addresses the use of step therapy—when insurers can require patients to try a series of older, sometimes less effective, medicines before being allowed access to newer, cutting-edge medicines.

The bill went through several iterations and, as passed by the House and Senate, expands the prohibition on step therapy to multiple sclerosis and rheumatoid arthritis (in addition to stage IV metastatic cancer).

Sidelined Bills

A significant part of the work during a session is communicating that some bills, however well intended, are flawed or their implications and consequences simply not fully thought through and need to be sidelined.

This group includes: SB 2, An Act Concerning Artificial Intelligence; SB 1249, An Act Addressing Innovations in Artificial Intelligence; SB 1484, An Act Implementing Artificial Intelligence Protections for Employees; HB 6062, An Act Prohibiting Direct-to-Consumer Prescription Drug Advertisements; HB 7196, An Act Concerning Limitations on the Use of Noncompete Agreements; HB 7275, An Act Concerning the Regulation of Cigarettes, Electronic Nicotine Delivery Systems and Vapor Products; SB 80, An Act Concerning the Burning of Medical Waste; and HB 6278, An Act Concerning the Use of Alternatives to Anima Testing Methods and Requiring the Use of Biodiesel Blending Methods for Certain Diesel Fuels.

Unfortunately, there are bills that should have made it over the finish line, but didn’t, and others that made their way through the House and Senate but shouldn’t have.

The former category includes HB 7008, which expands the R&D tax credit to small businesses organized as pass-through entities.

Today, most technology companies—and most start-up and smaller businesses—are organized as limited liability companies.

Because our tax statutes have not kept up with the times, these businesses cannot take advantage of credits.

Because our tax statutes have not kept up with the times, these businesses cannot take advantage of credits and preferences they would qualify for if they were organized as corporations.

The no action category also includes HB 7065, An Act Concerning the Decriminalization of Possession of Small Amounts of Psilocybin.

This bill was passed by the House but, because it was a catalyst for extended debate, went uncalled in the Senate.

Psychedelic compounds like psilocybin are proving to have much therapeutic value and R&D potential.

They are confused with cannabis and morphine, but do not have the deleterious side effects associated with them, including cancer and addiction.

Healthcare Bill Troika

Three bills were meant to address the high cost of healthcare, including prescription drugs: SB 11, HB 6870, and HB 7192.

No action was taken on the first two, but HB 7192, as amended, will soon be before Gov. Ned Lamont for his signature.

While HB 7192 includes provisions that modestly address issues surrounding the “middlemen” in the drug supply chain—such as pharmacy benefit managers—other provisions are antithetical to innovation and will harm patient access to life-saving medicines or are simply unworkable.

Canadian officials have traveled to Connecticut on several occasions to deliver this message directly to policymakers.

HB 7192 establishes a complicated protocol to study importation of drugs from Canada.

Apart from the impossibility of ensuring the safety and efficacy of medicine imported from another country, Canadian government officials have expressed repeatedly and categorically that they barely have enough supply of medicines for their own people and will not permit export of drugs to the U.S.

They have, in fact, traveled to Connecticut on several occasions to deliver this message directly to policymakers.

The bill sets in motion an importation study that will cost hundreds of thousands of dollars and will result in no viable way to import drugs from Canada.

Price Controls

HB 7192 also seeks to establish “bulk purchasing” of drugs by the state in an effort to “negotiate” lower prices.

It references the Inflation Reduction Act’s “maximum fair price” concept. Those provisions of the bill are, essentially, an effort to erect government mandated price controls.

Price controls never work, whenever they have been tried.

There is a long history and rich body of evidence conclusively showing that price controls never work, whenever they have been tried.

They may bring about a very short-term slowing of price increases, but longer term they reduce supply and patient access.

Because price controls mean that the companies and investors who pay for the huge R&D expense of creating a new medicine are unable to recoup their cost, it must be understood that they eviscerate innovation and rob patients and our healthcare system from future cures and treatments.

‘March-In Rights’

Finally, HB 7192 provides for Connecticut to seek authorization for federal “march-in rights” for GLP-1 drugs like Ozempic.

The “march-in” concept relates to an obscure provision in the Bayh-Dole Act of 1980 that allows the government to seize intellectual property patent rights from a company if the company has failed to meet specific requirements, such as neglecting to commercialize a drug.

One interpretation of the law is that if the government deems a price too high it can claim failure to commercialize has been triggered, reclaim the patent, and arrange for the drug to be manufactured at a lower cost.

Whether this interpretation is valid is open to question.

Whether this interpretation is valid and whether a state can take advantage of it is open to question.

In any event, it is a terribly counterproductive idea. It undermines the most basic, essential feature of U.S. patent law: that once a patent is granted it is granted unconditionally, and the holder can expect to recoup its costs in developing the patent over the patent’s 20-year lifespan.

In sum, for biopharma the 2025 General Assembly session was like most others—highs, like the R&D tax credit expansion and biomarker testing, and some lows, like price controls and undermining patent rights.

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Paul Pescatello is the executive director of CBIA’s Bioscience Growth Council and chair of We Work for Health Connecticut. Follow him on X @CTBio.