- Vital Transformation (VT) modeled the impacts of the drug pricing provisions of President Biden’s 2024 Budget, now proposed by Senator Baldwin as the “Smart Prices Act (SPA)”, which would impose government price setting for selected Medicare drugs at only 5 years after initial FDA approval.
- We modeled the impacts on industry revenues and future R&D investments and estimated future lost innovation impacts including the impact on industry jobs.
- We estimate a loss of between 146,000 – 223,000 direct biopharmaceutical industry jobs and a total of 730,000 – 1,100,000 U.S. jobs across the economy if the proposed IRA expansion were to be implemented.
- Looking forward, we estimate that the expanded government price setting could result in roughly 230 fewer FDA approvals of new medicines over a ten-year period, once the impacts are fully reflected in the pipeline.
- Impacts will be felt most heavily in many areas of unmet need, including in rare disease, oncology, neurology, and infectious disease.
- The most significant ecosystem impacts would be concentrated primarily in CA, MA, and NY.
- Had the drug pricing provisions of the SPA been in place prior to the development of today’s top-selling medicines, we estimate that 82 of the 121 therapies we identified as selected for price setting would likely have not been developed.
READ the report
Op-Ed: New Drug Price Proposals Put Health, Jobs at Risk, by Kristin Jones, IHIF
Press Release: Indiana Faces Devastating Losses to Drug Development, Jobs
and Patient Health According to New Study