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LATEST RESEARCH
Everybody Loses with Most Favored Nation Reference Pricing. . .Except China.
Key takeaways
If MFN were adopted in Medicare and Medicaid, based upon our preliminary estimate it could lead to 1.3 million fewer jobs over ten years.
$2.8 trillion in lost earnings over 10 years due to MFN being applied to Medicare, resulting in $700 billion in reduced tax revenue.
By undermining the U.S. economic environment, MFN risks accelerating the movement of U.S. biopharma research and development to China.
LATEST COMMUNICATIONS
Our Communication Services
In this episode, host Duane Schulthess is joined by Sam Rasty of Sensorium Therapeutics, Steve Potts from the International Cancer Advocacy Network, and Joe Hammang of Vital Transformation to explore how U.S. health policy is reshaping neuroscience innovation, investment priorities, and patient access. They discuss how the Inflation Reduction Act’s pricing controls and Medicare negotiations are redirecting venture capital and R&D pipelines, and examine patient advocacy challenges posed by formulary rules and generic‑first mandates. The conversation dives into hurdles slowing CNS drug development – such as social stigma, orphan‑disease incentive gaps, and small‑molecule exclusivity issues – and reviews proposed legislative fixes. Finally, the panel emphasizes the critical need for collaboration among the NIH, biotech startups, and the pharmaceutical industry, and highlights the importance of communicating biotech’s value to policymakers and the public.
Find all our communication projects on Better Science, Better Health
MORE RESEARCH
Inflation Reduction Act – Two Years On Investor Behavior, R&D Impacts, & Proposed Solutions
IRA has led to:
A 35% reduction in early-stage phase I and II therapies under development from 2021-2023 among small and midsize biotech companies as measured from IRA’s introduction; the average time of phase II and III development is roughly 40 months each, we would expect to see a considerable reduction in the number of FDA approvals in roughly 5 to 6 years.
A statistically significant reduction in the size of VC investments for small molecules with a high exposure to the Medicare-aged population, which is exposure above the mean at % above age 65, after the introduction of the IRA and no corresponding reduction in the size of VC investments for small molecules with a Medicare exposure below the mean.
A statistically significant reduction of > 70% in the median size of VC investments for small molecules treating indications with a high exposure to the Medicare-aged population in our cohort – these include Disease Dementia, Non-Small Cell Lung Cancer, Prostate Cancer, Multiple Myeloma and others.We also see a shift in the number of clinical trials from small to large molecules in areas with a high exposure to the Medicare-aged population, such as neurology and autoimmune disease classes.
When indications have exposure to the IRA’s impacts, we observe divergent results between large and small molecules; this presents statistically significant evidence of specific disincentives caused by the legislation for the Medicare-aged population.
Removing the ‘pill penalty’ by beginning IRA price setting for both small and large molecules after 13 years increases approvals targeting the Medicare-aged population by 20%.
Beginning IRA price setting after 15 years is estimated to reduce the number of medicines lost to the Medicare-aged population 50%.
PREPRINT NEW RESEARCH: The Inflation Reduction Act’s Impact upon Early-stage Venture Capital Investments
Vital Transformation is preparing a new analysis about the impacts of the Inflation Reduction Act on biopharma investment, research and development in the two years since the law’s passage. Early returns show significant harms to innovation and patients’ treatment options, particularly because of the IRA’s small molecule “pill penalty.”
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VT on X
Claims that the IRA wouldn’t affect innovation overlooked how early-stage investors really make decisions. Our research shows the pipeline for senior-focused therapies is already narrowing.
— VitalTransformation (@VitalTransform) April 18, 2025
Read the full breakdown: https://t.co/4EzJGdMcU4@weworkforhealth #IRA #DrugPricing
The IRA’s 9-year cap for small molecules and 13-year cap for biologics rerouted investment away from the pills seniors rely on. We sat down with @steveusdin1 to unpack how this shift skews R&D incentives and future therapies.
— VitalTransformation (@VitalTransform) April 27, 2025
Listen here: https://t.co/FCjKFdIhsU@weworkforhealth pic.twitter.com/phoDI4ZrhK
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