Presentation (CTI)

OBJECTIVES: US medicine pricing policy has evolved significantly in recent years, introducing federal-level price regulation in response to concerns about rising costs. Key developments include the Inflation Reduction Act (IRA), which mandates price negotiations for Medicare part D medicines, and more recent “Most Favoured Nation” policy proposals for international reference pricing in Medicaid (GENEROUS), and Medicare part B and D (GLOBE and GUARD). These policies may reduce drug prices, but risk unintended consequences for future innovation due to revenue losses in one of the world’s most value-generating markets. This study aimed to characterise the innovation ecosystem and assess how policy changes affect different stakeholders and their investment decisions.
METHODS: A targeted literature review was conducted to characterise the biopharmaceutical innovation ecosystem. The impact of policy changes was explored through interviews with stakeholders: seven venture capital investors, three corporate venture capital investors, two private equity investors, four small biopharmaceutical companies, and three large biopharmaceutical companies.
RESULTS: The full ecosystem comprises diverse stakeholders with distinct risk profiles and drivers for investment. Early-stage development is largely driven by smaller companies supported by venture capital, while partnerships become critical in later stages, where most assets are launched collaboratively and supported by private equity. Interviewees confirmed that pricing policies influence both company-level and product-level investment. For example, the IRA disproportionately disincentivises investment in small molecule products, orphan indications, and indication extensions. Stakeholders expressed concern about the expansion of price regulation in the US and called for informed policy debate and greater public understanding of pharmaceutical innovation and the role of supply chain actors in shaping US medicine prices.
CONCLUSIONS: US pricing policies significantly influence investment decisions across the full innovation ecosystem, with implications for medicine development, financial markets, and employment. Policymakers should move beyond limited impact models and adopt a holistic approach that considers all stakeholders and real-world consequences.