MassBio CEO and President Kendalle Burlin O’Connell originally posted this update on LinkedIn.
This week may mark biotech’s Department of Defense moment. The draft NDAA establishes biotech as critical to national security with new funding authorities and a dedicated management office, while Congress advances major reforms to unlock capital for small biotechs and entrepreneurs from seed stage to IPO. For Massachusetts companies, this convergence of national security priority and capital formation represents policy tailwinds our ecosystem hasn’t seen in years.
- Biotech a Major Focus of Draft NDAA: House & Senate Armed Services Committees released NDAA conference text over the weekend, and it included several biotech-related provisions. In fact, it included 17 provisions recommended by the NSCEB. This year’s bill gives new authorities to DoD to fund pilot plants, creates a dedicated Biotechnology Management Office within DoD, and establishes an updated BIOSECURE framework that will restrict government funding from reaching Chinese companies identified as companies of concern. For Massachusetts biotechs, the new provisions could be an opportunity to tap defense and intelligence budgets for dual-use platforms, secure biomanufacturing, and data tools, but may also bring more scrutiny on who you buy from, where your data is stored, and how you partner with China and other “countries of concern.” The House approved it last night in a bipartisan vote of 312 to 112. MassBio will continue to promote Massachusetts’ strengths in R&D and biomanufacturing that this framework is looking for.
- INVEST Act: The House is set to vote this afternoon on the Incentivizing New Ventures and Economic Strength Through Capital Formation (INVEST) Act, a bipartisan package of capital-formation bills that House leaders say will “cut red tape, empower small businesses and entrepreneurs, and give Americans more freedom to invest.” For Massachusetts biotechs, this package is an opportunity to open the funding pipeline from seed to IPO: the bill modernizes rules around venture funds and crowdfunding, expands who can qualify as an accredited investor, and extends JOBS Act-style on-ramps that make it easier and cheaper for emerging growth companies to go public. In a market where early-stage life science companies are still navigating tighter fundraising conditions, MassBio’s support reflects a simple thesis: if Congress can lower friction in the private and public markets, more capital will flow into the next generation of Massachusetts therapeutics, tools, and health-tech startups rather than sitting on the sidelines. MassBio was proud to submit a letter to House leadership in support of the bill and looks forward to continuing to work with legislators to pass this meaningful package of reforms.
- Independence Investment Fund Act Introduced: Reps. Pete Sessions (R-TX) and Chrissy Houlahan (D-PA) recently introduced the Independence Investment Fund Act, which would set up a dedicated investment fund at the U.S. Treasury to make equity investments in U.S.-based companies developing “critical and emerging technologies,” explicitly including biotechnology. The idea is to create a public–private vehicle that can bridge the “valley of death” between lab breakthroughs and commercial scale, de-risk strategic technologies, and counter Chinese and other adversarial investment plays. The proposal calls for nearly $1 billion to fund the initial investments. For Massachusetts biotechs, this could eventually mean a new source of growth capital on top of existing tools.
- Healthcare Package Expectations: The U.S. Senate failed to pass two healthcare packages today. One piece of legislation, introduced by Senators Cassidy and Crapo earlier this week, would have eliminated ACA premium subsidies and instead authorize up to $1,500 for HSAs for certain individuals. The other, backed by Democrats who have argued the Republican proposal falls short of covering deductibles, would instead extend ACA subsidies for three years. Though they failed, they could be good indicators of where the healthcare debate is headed. One Republican opposed the GOP plan, while four Republican senators voted to advance the Democrats’ plan. With less than two months until the government funding deadline on January 30, Republican leadership may use that vehicle as an opportunity to pursue broader healthcare reforms, including those relating to HSAs, 340B, PBMs, and more. MassBio will continue to advocate for such reforms as a meaningful opportunity to lower drug and healthcare costs.