Kerrigan in Townhall: The Inflation Reduction Act is Deflating America’s Small Bio-Tech Companies

By SBE Council at 23 March, 2023, 9:56 pm

In a March 23 Op-Ed in Townhall, SBE Council president & CEO Karen Kerrigan reviews the damage that the Inflation Reduction Act is having on investment and America’s vital bio-pharmaceutical sector. Kerrigan writes that patients who need live-saving drugs and treatments will be the ultimate losers.

“The new law’s ‘negotiated’ drug prices – which are simply a euphemism for government price controls – won’t take effect until 2026. But they’re already forcing American biotechnology companies, especially start-ups, to slash investment in research and development.”

She notes specific examples, including:

“Steve Potts, the founder of two small biotech companies – Serpass Biologics and Redrock Science – didn’t mince words when explaining the law’s implications for his work. ‘It’s forcing me to choose to develop a drug for kids instead of a drug for their grandparents, when I could be developing both…’”

Kerrigan explains that President Biden is pursuing more of the same by significantly expanding the government’s new price-setting powers. His proposed budget would subject many more medicines to government price controls. She writes that the tradeoffs could be a disaster for the U.S. economy, our innovative leadership, and for patients. She reminds readers about what it takes to bring a drug to market and how Biden’s policies create new and expensive barriers and work against investment.

“It costs more than $2 billion, on average, to develop a single new drug, and biopharmaceutical companies devote about 25% of their revenue to research and development. No other research-intensive industry comes close to this level of investment.”

Read the Op-Ed in its entirety here.