New Analysis Shows International Reference Drug Pricing Would Have a Catastrophic Impact on Alzheimer’s Disease Research

Proposed Policy Would Likely Eliminate Future Clinical Development Programs in Alzheimer’s Research, Impacting Millions of Patients and Their Families

Available online 22 April 2021


The number of Americans aged 65 and older with Alzheimer´s disease (AD) is expected to more than double from 6.2 million today to 12.7 million by 2050. Currently, there are no treatments available to stop or slow the progression of the disease. At the same time, large pharmaceutical companies have already downsized investment into AD and other neurological disorders by more than 50 percent due to the associated high risk of study failure for these diseases. International reference pricing proposals (including “International Pricing Index” or “Most Favored Nation”), currently under consideration by the U.S. Congress and proposed in the previous Congress as Title I of H.R. 3, would import foreign price controls for 125 Medicare Part B and D drugs with the highest net spending based on the volume-weighted average of drug prices in Australia, Canada, France, Germany, Japan, and the United Kingdom. Previous analysis of the impact of international reference pricing estimated a 70 percent earnings reduction in 2023 for all 125 therapies that would be potentially affected by the proposed policy.

The impact of international reference pricing is projected to have carryover adverse impacts on research funding for AD. Revenue generated from successful medical products is increasingly required to underwrite investment into high-risk AD clinical development programs. Implementing international reference pricing in the U.S. would sharply reduce the ability to cross-subsidize AD research, further diminishing already dwindling investments and progress in this disease area. This is the key takeaway of a new analysis by Vital Transformation in collaboration with the Alliance for Aging Research.

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