AUTHORS
William J. Canestaro, PhD, MSc, of the University of Washington; Julie A. Patterson, PharmD, PhD, and Jonathan D. Campbell, PhD, MS, of the National Pharmaceutical Council.
PUBLICATION
“Inflation Reduction Act Impact on Pharmaceutical Investment: Insights From Investor Interviews”
ABSTRACT
OBJECTIVES
There is limited direct measurement of whether the Inflation Reduction Act is beginning to influence investment strategy and decisions.
METHODS
Using a standardized guide, authors interviewed life science investors from a range of stages, investment sizes, and fund types to explore how incentives under the IRA have impacted investment decisions.
RESULTS
Authors interviewed 31 active investors and found:
- Over 90% had discussed the law within their firm.
- While 71% reported a lack of firm-wide consensus as to the IRA’s precise potential impacts, 87% reported that the IRA was making it more challenging to bring innovative new medicines to market.
- All but one investor reported they were more likely to consider a larger launch indication for products they invest in, and 77% reported the IRA influenced small molecule investing.
CONCLUSION
Early signals of IRA impact on investor strategy include favoring a larger population launch and reduced small molecule investing. Noting stated preference and other study limitations, investors signaled continued interest in certain high Medicare utilization drugs. Buy-side investment impacts remain understudied.
