“In Illinois, we’ve seen what the right environment can deliver — with recent investments from AbbVie and CSL Behring reinforcing our state’s role as a leader in biomanufacturing and innovation. And candidly, we’d like more companies to follow their lead — not fewer. That kind of growth doesn’t happen by accident. It depends on stable, predictable policies that encourage companies to invest, scale, and take risks on the next generation of treatments.

That’s why we have real concerns with the Administration’s Section 232 pharmaceutical tariffs. These measures apply broadly across pharmaceutical products and key ingredients, adding new costs at every stage of development and manufacturing. For an industry already defined by long timelines, high failure rates, and significant capital needs, this is not a small adjustment — it’s a structural headwind.

The burden will fall hardest on small and mid-sized biotech companies. These are the companies doing much of the early, high-risk work to develop new therapies, often without the resources or infrastructure to absorb sudden cost increases or reconfigure global supply chains. When capital gets redirected to tariffs instead of science, innovation slows — or stops.

There are also real implications for patients. Many therapies rely on globally sourced inputs, and introducing friction into those supply chains increases the risk of delays, shortages, and higher costs. For patients waiting on new or specialized treatments, that uncertainty matters.

We all share the goal of strengthening domestic manufacturing and securing supply chains. But tariffs alone won’t get us there — and in many cases, they may work against it by discouraging investment and introducing instability into an already complex ecosystem.

iBIO looks forward to working with policymakers on solutions that actually accelerate U.S. biomanufacturing, support growth-stage innovators, and ensure patients can access the medicines they need. Getting that balance right is critical to maintaining American leadership in biotechnology.”

What’s Included — and Why It Matters

The Administration’s Section 232 tariff action applies broadly across pharmaceutical products — and importantly, it does not stop at finished medicines.

The policy defines “pharmaceutical articles” to include not only finished drug products, but also active pharmaceutical ingredients (APIs) and key starting materials used to manufacture them  .

This means the tariffs extend across the full pharmaceutical supply chain — from early-stage development through manufacturing.

Because many companies, including those manufacturing in the United States, rely on globally sourced inputs, the inclusion of APIs introduces added costs and complexity throughout the development process. Rather than affecting only imported finished products, these tariffs can impact research, clinical development, and production timelines.

For growth-stage biotechnology companies in particular, these added pressures can be significant, as capital is often tightly allocated to advancing innovation. At the same time, increased friction in supply chains raises concerns about potential delays or disruptions that could ultimately affect patient access to critical therapies.

iBIO will continue to monitor how these policies are implemented and their impact on innovation, manufacturing, and patients.”

“iBIO commends Governor Pritzker for the proactive economic development initiatives outlined in his Operating Budget. In particular, we strongly support his proposal to modernize the Illinois Research & Development (R&D) Tax Credit by aligning it with the federal credit. This commonsense reform will reduce administrative burdens, save companies time and expense, and make it easier for innovators to invest and grow in Illinois.

We are especially grateful that the Governor has included one of iBIO’s longstanding policy priorities—making the Illinois R&D Tax Credit transferable. This is a transformative step for our startup and growth-stage ecosystem. Transferability allows companies with little or no current tax liability to monetize their credits immediately, improving cash flow and providing access to non-dilutive capital without the need for complex financing structures.

Access to capital remains one of the greatest challenges facing the startup life sciences ecosystem, as financial and investment markets continue to recover. Expanding economic tools that enable companies to tap into additional sources of non-dilutive capital will be critical to sustaining and accelerating innovation in our state.

States that have implemented transferable R&D tax credits have demonstrated measurable economic returns. Over a four-year period, comparable programs have generated a net tax revenue impact of $6.1 million, a net return on investment of 12 cents per dollar, and the creation of 915 full-time equivalent jobs. Multiple studies further show that every $1.00 in R&D tax credit can incentivize between $1.00 and $1.50 in private-sector R&D spending.

These policies will not only strengthen Illinois’ startup and growth-stage community, but also send a clear message that Illinois is at the forefront of supporting a dynamic and innovative ecosystem. By making the Illinois R&D Tax Credit transferable, our state positions itself alongside leading innovation hubs nationwide—committed to fostering breakthrough research, attracting investment, and advancing cutting-edge technologies that help patients live longer, healthier, and happier lives.”

We’ve been hearing some wild claims from hospital lobbying groups about what will happen if HB2371 doesn’t pass. Here’s what you need to know:

CLAIM: “Voting NO on HB2371 will end the 340B program and force hospitals to close.”

FACT: The 340B program is a federal program that will continue to operate exactly as it does today, regardless of any state legislation. No state law can end a federal program.

CLAIM: “340B hospitals need this expansion to survive and serve vulnerable patients.”

FACT: Recent comprehensive analysis shows that after enrolling in 340B, hospitals:

• Increased financial investments by 89% per bed (stocks, bonds, financial instruments)
• Directed one-third of every 340B dollar to investment portfolios
• Decreased uncompensated care by 22% per bed
• Kept staffing completely flat despite massive revenue growth

In Illinois specifically, charity care at 340B hospitals plummeted from 4.80% to 2.14% between 2012-2022 – that’s 6.5% below the national average.

CLAIM: “Patients benefit from the 340B program.”

FACT: The Congressional Budget Office’s September 2025 report found “no evidence that patients benefit from the program.” Instead, CBO found that 340B drives up costs for taxpayers and incentivizes more expensive care settings.

THE REAL COST OF HB2371:

• Illinois Medicaid has already lost $238.4 million in rebates due to 340BHB2371 would cost an additional $52 million annually
• Total impact: Over $290 million in taxpayer dollars
• $16 of every $100 in 340B revenue goes to contract pharmacy middlemen – not patients

THE BOTTOM LINE:

The data is clear. 340B hospitals are building Wall Street investment portfolios while cutting charity care. HB2371 would expand this broken system at a cost of $290+ million to Illinois taxpayers – with zero transparency requirements and zero evidence of patient benefit.

The 340B program will continue to operate whether or not HB2371 passes. The question is: should Illinois expand a program that enriches hospital portfolios and pharmacy middlemen instead of helping vulnerable patients?

“iBIO supports expanding domestic life sciences manufacturing. The pharmaceutical sector has committed over $350 billion toward American production facilities this year.

“Imposing immediate penalty duties on therapeutic products would severely damage emerging enterprises throughout Illinois’ biotech sector. These startups represent the core of our state’s life sciences industry. Most lack sufficient funding to rapidly build domestic manufacturing operations and depend on third-party manufacturers for their products.

“I have serious concerns that rushed import penalties would undermine scientific advancement and economic expansion within Illinois’ biotechnology community. Such measures risk compromising our state’s leadership position in life sciences research and would cripple the pioneering work conducted by Illinois biotech firms developing critical therapies for patients.”

“Patients should not be forced to wait the better part of a decade for access to safe and effective medical technology that holds the potential to meaningfully improve their health and life,” the letter states. The coalition includes patient advocacy groups and state medtech and life sciences associations.

“FDA is the global gold standard with its rigorous medtech safety and efficacy standards,” said Scott Whitaker, AdvaMed president and CEO. “When FDA has identified a medtech solution as a ‘breakthrough’ and cleared it as safe and effective for patients, we believe Medicare should cover it.”

The coalition’s proposal draws from the withdrawn Medicare Coverage of Innovative Technology (MCIT) framework, which would have provided immediate national coverage for four years for breakthrough medical devices. The effort is gaining momentum as FDA Commissioner Marty Makary said he and Dr. Oz are working on automatic coverage of FDA-authorized breakthrough medtech to avoid a “repeat, duplicative approval process.”

U.S. senators have also introduced the bipartisan Ensuring Patient Access to Critical Breakthrough Products Act to accelerate Medicare coverage. The groups argue that existing programs “fall short of providing the consistent, timely and predictable access that breakthrough technologies demand.”

iBIO’s participation reflects the company’s commitment to advancing biotechnology innovation and patient access, recognizing that reimbursement challenges can significantly impact breakthrough technology adoption.

Read the letter. Read AdvaMed’s press release. 

The broad coalition represents Illinois’s thriving life sciences ecosystem, which employs more than 94,000 professionals statewide and includes research-intensive biotechnology companies, academic institutions, and investors developing breakthrough treatments for cancer, rare diseases, and other critical health challenges.

“The SBIR/STTR programs are the largest source of early-stage capital for biomedical R&D startups,” said John Conrad, iBIO President and CEO. “Their expiration would be a crushing blow to American innovation and small business job creation.”

The coalition emphasized the significant economic impact of these programs on Illinois, noting that startup high-tech companies in the state annually receive $75 million in Phase I and II SBIR grants. This funding is critical for launching companies from university laboratories and creating jobs throughout Illinois, with the state further amplifying the impact through its SBIR Phase I matching grant program.

As part of the outreach effort, iBIO also provided 37 testimonials from Illinois startups and incubators demonstrating the real-world importance of SBIR funding. The testimonials showcase how companies have used SBIR support to complete pivotal clinical studies, develop medical devices, establish operations in Illinois, and attract additional private investment.

One testimonial highlighted how SBIR funding enabled Rhaeos to complete a 9-center pivotal study supporting FDA approval, fund clinical-grade device builds used on over 400 patients nationwide, and successfully spin out of Northwestern University while creating 10 full-time jobs in Illinois.

The coalition is requesting that Congress pass an extension of the SBIR/STTR programs prior to the September 30 deadline to provide continuity while comprehensive reauthorization legislation is developed.

“These essential programs fuel innovation, create jobs, and advance medical breakthroughs that improve and save lives,” the coalition stated in their letter to Illinois representatives.

The SBIR/STTR programs, established in 1982, provide certainty, stability, and predictability that both small businesses and federal agencies need to budget and plan for future innovation initiatives.

Read the Letter

Read the Testimonials

Illinois life sciences companies and associations have until August 15th to sign onto a group letter urging the state’s Congressional Delegation to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs before their September 30, 2025 expiration.

The programs provide approximately $90 million annually to Illinois high-tech companies and are the largest source of early-stage capital for biomedical startups. These federal grants are critical for launching companies from university laboratories across the state’s 94,000-employee life sciences ecosystem.

“SBIR funding has been instrumental in enabling Rhaeos to advance our innovative FlowSense technology from Northwestern University’s labs to clinical trials,” said Anna Lisa Somera, CEO of Rhaeos. “This critical early-stage funding allowed us to build our team here in Illinois and conduct essential research and development.”

Illinois amplifies the federal investment through its own SBIR Phase I matching grant program. The potential expiration threatens to disrupt the biomedical research ecosystem at a critical time for economic recovery and scientific advancement.

Companies and associations are strongly encouraged to share their SBIR impact stories when signing on to demonstrate the real-world benefits of these programs to Illinois innovation and job creation.

Companies and associations can sign onto the letter below before the August 15th deadline.

“Importing socialized medicine and government price controls through international reference pricing to Medicaid would be particularly harmful to those committed to America’s most vulnerable patients,” Conrad continued. “Under our system today, Medicaid already collects more in rebates than it spends on prescription drugs annually.”

The United States leads the world in drug availability, with patients gaining access to innovative treatments years before those in countries with government price controls. More than 110 medicines approved in the United States since 2010 remain unavailable to patients in Europe due to restrictive pricing policies. Rare disease patients are particularly vulnerable, with similar pricing schemes rejecting up to 40% of rare disease treatments.

For Illinois, this proposal threatens to eliminate 9,500 jobs and $17 billion in economic output, while similar price-setting proposals could jeopardize $487 billion in venture partnerships over the next decade.

“Cuts to US innovators will only serve to stall investment across America’s biopharma companies, slow our scientific progress, deny U.S. patients access to new medicines and lead to fewer American jobs,” Conrad emphasized. “Weakening America’s biopharma sector through misguided pricing policies doesn’t just risk patient access to vital treatments and cures—it also erodes our national and economic security.“​​​​​​​​​​​​​​​​

“We’re encouraged by the Administration’s focus on fixing the pill penalty and addressing PBM practices, issues we’ve advocated for consistently,” said John Conrad, President and CEO of iBIO. “We look forward to continuing our work with the Administration and Congress to address our industry’s concerns and ensure that efforts to reduce costs strengthen the innovation ecosystem that delivers lifesaving treatments to patients.”

The Executive Order includes directives ranging from Medicare Drug Pricing Negotiation Program changes to accelerating approvals for generics and biosimilars. iBIO will continue advocating for the Orphan Cures Act and other IRA mitigations to support the research ecosystem necessary for developing breakthrough therapies.

Our commitment remains unwavering: to ensure patients have access to innovative therapies while preserving the ecosystem that makes these medical advances possible.

iBIO represents the 94,000 life sciences employees in Illinois who are working every day to develop new cures and treatments for patients who need them.

As the associations representing the bioscience industry across the nation, the Council on State Biotechnology Associations (CSBA) is concerned by recent guidance that would cut funding provided by the NIH to universities, hospitals, and other institutions that perform critical early-stage research.

NIH grant funds are a critical component of our innovation ecosystem. Grants for basic research are the spark that leads to university-driven discoveries, with public-private partnerships and tech transfers that bridge early-stage research to industry-sponsored drug development and ultimately to FDA approved medical advances for hundreds of diseases.

While the administration looks for greater efficiency in the use of taxpayer dollars, it cannot be overstated – once scientific innovation moves abroad, it may never return.

In the race for scientific innovation around the world, as our adversaries continue to increase government investments in research, we encourage President Trump to follow suit and ensure that we maintain our global leadership in an industry that was created and thrives across the US.”