Presentation (CTI)

OBJECTIVES: The Inflation Reduction Act (IRA) was signed into law over two years ago. Despite this elapsed time, there is limited direct measurement of whether it is beginning to influence investment decisions. Decisions are made every day about which companies to fund, which technologies to license into companies, and which programs to prioritize in a company’s portfolio. This work aims to fill this gap by determining if the predicted reduction in investment is already occurring and how the incentives of the IRA have influenced their product development strategy.
METHODS: Using a standardized guide, we interviewed life science investors from a range of stages, investment sizes, and fund types to explore how the incentives of the IRA have impacted their investment decisions and product development strategy.
RESULTS: We interviewed 31 active investors from three categories: traditional (22), corporate (5), and Search and Evaluation (4). Most interviewees were aware of the IRA. Over 90% had discussed the law within their firm, but only 29% had a consensus around its impact. Over half (57%) reported that the law had impacted companies trying to raise capital; fewer (35%) reported that the IRA had specifically been a consideration while making an individual investment decision. Regarding specific impacts of the law, nearly all (97%) reported that they were more likely to consider a larger launch indication for products they invest in, and 77% reported the IRA influenced their thinking around small molecule investing. However, few (17%) felt that the law would impact investing in indications heavily represented in Medicare.
CONCLUSIONS: Early signals of IRA impact on investor strategy and decisions include changing strategies around indication sequencing (favoring a larger population launch) and small molecule investing while continuing to view investing in high Medicare utilization drugs as viable. Buy-side investment IRA impacts remain understudied.