IRA creating ‘dilemmas’ for drug companies, Genentech CEO says

The Inflation Reduction Act is creating new tensions for biopharma executives who are being forced to choose between rapidly exploiting scientific opportunities to maximize patient benefit and meeting the expectations of investors and shareholders. While drug companies will find ways to navigate the challenges posed by the law, the misalignment between economic incentives and public health goals could cause them to make decisions that are not in the best interests of patients.

One set of difficult decisions stems from the nine-year period prior to Medicare drug price-setting for small molecules and other medicines marketed under NDAs. On average, this will cut about four years from U.S. market exclusivity, but because sales volumes typically accelerate steeply over time, for many drugs it will effectively halve revenues. Meeting this challenge could cause companies to abandon successful drug development paradigms, including the serial development of cancer drugs that has been extraordinarily successful by pushing effective drugs into numerous indications and disease settings...