Research reveals impact of IRA’s pill penalty on small molecule R&D

New research from consultancy Vital Transformation has shown the effects of US policy the Inflation Reduction Act’s (IRA) drug pricing provisions on biopharmaceutical investment, research and development (R&D).

The research found that aggregate small molecule investments by companies valued at less than $2 billion dropped by 68% since the IRA was introduced in 2022. 

It was also discovered that there was a 74% drop in the median size of aggregate investments into indications specifically targeting the Medicare-aged population, with a significant decrease in investments in small molecules compared to large molecules after the IRA was introduced.