Kerrigan in The Washington Times: The high price of price controls hit U.S. small biotech and innovation

By at 12 December, 2022, 12:58 pm

In a December 12 Washington Times Op-ed, SBE Council president & CEO Karen Kerrigan writes that legislators who drafted the Inflation Reduction Act (IRA) “had some idea that their bill was going to hurt small biotech companies.” The legislation, signed by President Biden in mid-August 2022, imposes price controls on some drugs purchased by Medicare starting in 2026.

As Kerrigan notes in the piece, the non-partisan Congressional Budget Office, various economists at the University of Chicago (among others) predicted these intrusive price controls “will reduce investment into drug research, and as a result, cut the number of new medicines coming to market.” The legislation sort-of attempts to protect small bio-tech companies – which happen to dominate the bio-pharmaceutical industry – but the criteria in the legislation will actually exempt very few and vastly harm innovation and U.S. leadership in drug breakthroughs, as well as the health consumers who benefit from new drugs.

According to Kerrigan:

“The exemption suggests some wish by lawmakers not to drive biotechnology companies out of business. Yet it is so narrow as to seem like an afterthought, providing almost no help at all.  The problem is that few companies will be able to meet the criteria for exemption.”

Read more on the details of the IRA’s harmful effect on small U.S. biotech here.


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