Incubate responds to Maximum Fair Prices for first 10 drugs selected for Medicare price controls
15 August 2024 - 7:04PM
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 IncubateIncubate
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/
Lucia Orlandi
Incubate
(202) 970-9745
lucia@keybridge.biz