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%.