The Impact of Price Controls on Investment into Small Biotech Innovation
This report attempts to understand the implications of price controls on the early-stage life science industry.
In the U.S., policymakers have expressed interest in different forms of federal price controls for innovative medicines with the objective to control spending. Depending on the scope of the policy, these price controls could reduce the amount of biopharmaceutical revenue in the U.S. market significantly. Incubate asked Charles River Associates (CRA) to investigate the likely implications of price control policies, and the associated reduction in biopharmaceutical revenues, on investment by smaller biotech firms which are a growing source of new innovative medicines.
To better understand the potential implications of U.S. government price controls and their effect on investment into medicine innovation in the U.S. by smaller biotech firms, CRA organized discussions with experts working in the pharmaceutical industry (n=4) and venture capital (VC) firms who invest in small biotech companies (n=6). Experts were selected to represent VC firms focusing specifically on life sciences investment and both small biotech and large pharma companies with portfolio products across a range or therapy areas. Together, participating experts provided a broad representation across leadership roles within the industry, particularly relating to early-stage innovation.