Washington, DC, Aug. 15, 2024 (GLOBE NEWSWIRE) -- Today, the Biden administration announced Maximum Fair Prices (MFPs) for the first 10 drugs selected for Medicare price setting under the Inflation Reduction Act.
Incubate's executive director, John Stanford, issued the following statement in response to the announcement:
"The administration's first MFP announcement impacts not just the companies who manufacture these 10 drugs, but the life sciences industry at large -- including the venture capitalists who fund innovative drug development. Government price setting threatens to disrupt the flow of capital into life-saving biomedical innovation.
"Private capital is essential for bringing any drug to market -- a process that often costs upwards of $2 billion and takes over a decade.[1][2] Only 10% of drugs that make it to clinical trials actually make it to market.[3] Investors take on the incredible risk of drug development with the assurance that returns on successful medicines will be able to cover the investments into those that fail.
"Introducing MFPs changes that investment calculus. The administration's entire selection and negotiation process has also been plagued by a lack of transparency -- and CMS has demonstrated a fundamental misunderstanding of how drugs are financed and commercialized.
"Additionally, while it's been two years since the IRA was passed into law, CMS has still failed to take any meaningful steps to address the small molecule penalty. Incubate remains committed to working alongside lawmakers to put forth common-sense legislation to fix the penalty, such as the Ensuring Pathways to Innovative Cures (EPIC) Act."
MFPs for the first 10 Medicare Part D drugs will take effect in 2026. CMS will select another 15 Part D drugs for price setting in 2025, another 15 Part B and Part D drugs in 2026, and another 20 Part B and Part D drugs in subsequent years.
To learn more about how the IRA is impacting investments in the life sciences, visit Incubate's Life Sciences Investment Tracker.
About Incubate
Incubate is a 501(c)(4) organization of venture capital firms representing the patient, corporate, and investment communities. Our primary aim is to educate policymakers on the role of venture capital in bringing promising treatments to patients in need.
[1] https://www.ncbi.nlm.nih.gov/books/NBK22930/
[2] https://www.cbo.gov/publication/57126
[3] https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9293739/
