Medicare Drug Pricing Negotiations Loom Large Over Biotech Industry

June 28, 2023

At two recent biotech conferences, a consistent theme of presentations and conversations was the upcoming Medicare drug pricing negotiations from the Inflation Reduction Act. Representatives from smaller biotechs expressed concern that the negotiations will hamper partnership opportunities while companies large and small decried the legislation as a roadblock to innovation.

According to Max Bayer and Gabrielle Masson, “Other pieces of the new law that biotechs object to are new distinctions between small molecules and biologics that will impact when each could be subject to pricing reforms. Specifically, small molecules have nine years from FDA approval before they’d be subject to negotiations, compared to 13 years for biologics. Executives say that this places an inexplicable incentive on the kinds of medicines that are developed for the sake of avoiding negotiations for a few more years.”

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(Source: Fierce Biotech, June 28th, 2023)

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