Stifling Innovation: The Dire Impact of THE IRA
Over 100 life-saving therapies won't be developed due to the bill, not to mention over half a million jobs lost as well!
The Problem!
Innovation and R&D in the pharmaceutical industry face a critical threat, endangering over 100 new therapies that could transform lives. The consequences of dwindling research and development efforts are dire: a substantial reduction in job opportunities, with devastating implications for hundreds of thousands of researchers nationwide.
The Ira
The Inflation Reduction of Act focuses on climate, energy, health care costs, and other tax changes. The bill also authorizes a massive $740 billion in new spending over the next 10 years.
Biotech Provisions
This particular section of the bill, intended to alleviate healthcare expenses for Medicare beneficiaries actually introduces stringent limitations, price ceilings, and other detrimental regulations that have a chilling effect on innovation within the pharmaceutical sector and patients.
Biotech provisions
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Enhanced Medicare Drug Price Negotiations: This policy empowers the federal government to negotiate prices for select medications under Medicare. This approach has significant economic implications, profoundly affecting the pharmaceutical industry and those reliant on ongoing drug development.
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Establishment of a 'Maximum Fair Price' for Each Drug: The determination of this price is based on a variety of factors, including the average sales price and a weighted negotiation price. However, this strategy may inadvertently lead to pharmaceutical manufacturers increasing the initial market price of these drugs.
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Inflation-Based Rebates: Pharmaceutical companies are required to pay a rebate if their price increases surpass the inflation rate. While intended to curb excessive price hikes, this measure could potentially discourage manufacturers from investing in the development of new medications.
The problem
Loss of profit
The Inflation Reduction Act could slash biopharma sector revenues by a staggering 40% by 2035. This monumental decline threatens the financial backbone of 41 firms and jeopardizes the development of 92 therapies. Protect the future of biotech innovation; voice your opposition against the Act's biotech provisions now.
Loss of innovation
Biopharma's commitment to innovation shines, with 28% of its 2022 revenues invested in R&D. Biotech's impressive 39% allocation tops all sectors. Yet, looming revenue cuts from the Inflation Reduction Act threaten this dedication. It's not just about money, but also missed medical breakthroughs. Stand against innovation-dampening policies.
Loss of Jobs
Vital Transformation also estimates a loss of between 66,800 - 135,900 direct and 342,000 - 676,000 indirect jobs in the U.S. biopharma ecosystem! Hundreds of thousands of jobs are being lost to this law, as less R&D means companies have less incentives to keep employees. Click on the table on the right to see the breakdown of the impact state by state!