Pharmaceuticals Public Policy

Inflation Reduction Act already impacting life science R&D decisions

That is the takeaway according to a November-December 2022 survey by PhRMA of 25 large pharmaceutical manufacturers.

Among respondents, it was clear the IRA price setting provisions are already impacting, and are expected to have a growing impact on, R&D plans moving forward:
• 78% expect to cancel early-state pipeline projects.
• 63% said they expect to shift R&D investment focus away from small molecule medicines.
• 95% said they expect to develop fewer new uses for medicines because of the limited time available before being subject to government price setting.
• 82% or more of companies with pipeline projects in cardiovascular, mental health, neurology, infectious disease, cancers and rare diseases expect “substantial impacts” on R&D decisions in these areas.

One company expert stated that:

…the price setting provisions of the IRA “are likely to fundamentally change the economics of the pharma industry and disincentivize the industry from placing big bets on diseases with large unmet burdens.”