Incubate releases video explainer on small molecule penalty
Incubate released a video explaining how the small molecule penalty in recently passed legislation will negatively impact medical research and innovation.
09.13.2023
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Today, Incubate released a video explaining how the small molecule penalty in recently passed legislation will negatively impact medical research and innovation. The video details the critical role venture capital plays in bringing new medicines to market, and highlights how the small molecule penalty will radically change which drugs are developed in the future.
“Washington shouldn’t have more influence than scientists in directing where life sciences venture capital flows,” Incubate executive director John Stanford said. “Incubate remains committed to educating policymakers and stakeholders on the urgent need for 13 years of protection from price setting for both small molecules and biologics.”
Small molecule drugs — typically pills or tablets that can be taken easily at home — are eligible for Medicare price controls just nine years after FDA approval. But biologics, which typically have to be administered via injection or infusion in a clinical setting, receive 13 years of protection from price controls. This disparity is already forcing many venture capitalists to cut investments in small molecule drugs.
Last month, the Centers for Medicare & Medicaid Services announced the first ten drugs selected for price controls. Of the 10 medications selected, seven are small molecules — and three of those seven drugs would not have been eligible for price controls had Congress given small molecule drugs the same 13 years of protection as biologics.[1]
To learn more about how the small molecule penalty is impacting life sciences investment, research, and development, be sure to check out Incubate’s new video explainer on the small molecule penalty and its life sciences investment tracker.
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About Incubate
Incubate is a 501(c)(4) organization of venture capital firms representing the patient, corporate, and investment communities. Our primary aim is to educate policymakers on the role of venture capital in bringing promising treatments to patients in need.
[1]https://www.cms.gov/files/document/fact-sheet-medicare-selected-drug-negotiation-list-ipay-2026.pdf (Farxiga, Jardiance, and Entresto)