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Is The IRA’s Impact On Innovation Being Overstated?

 
• By David Wild

With the passage of the Inflation Reduction Act, many have questioned whether Medicare price negotiations will stifle small molecule innovation.

Will The Inflation Reduction Act Stifle Small Molecule Innovation As Some Believe? • Source: Shutterstock

Since President Biden signed the Inflation Reduction Act into law on 16 August 2022, the biopharma industry has been in a state of collective agitation and unrest. The IRA’s Medicare Drug Price Negotiation section allows Medicare to negotiate directly with drug companies for branded drugs covered under Medicare Part B and Part D. Now less than two years away from the first 10 Part D drug limits being implemented and four years away from the first batch of Part B drugs, industry-wide debate continues as to whether the IRA will significantly stifle innovation, particularly for small molecules, or whether it will be nothing more than a necessary part of doing business in the US.

Under the IRA, small molecule drugs without generic competition that are in the top 50 in terms of Medicare spending...

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