Reps. David Kustoff (R-TN) and August Pfluger (R-TX), along with U.S. Senator Bill Cassidy, M.D. (R-LA), have introduced the Small Biotech Innovation Act. This proposed legislation aims to exempt small biotech manufacturers that are heavily invested in research and development from the Medicare drug price negotiation program.
Congressman Kustoff emphasized the importance of maintaining U.S. leadership in medical innovation: “It is critical that the United States remains at the forefront of developing new medical technologies, treatments, and drugs.” He added that the act would support smaller companies by reducing what he described as “excessive Biden-era regulations,” thus encouraging investment in research and development.
Congressman Pfluger highlighted perceived shortcomings of the Inflation Reduction Act, particularly its impact on small biotech companies: “The Inflation Reduction Act has proven to fall short in several areas, including its small biotech exemption that disincentivizes companies from investing in R&D.” He stated that linking eligibility to R&D spending could incentivize new treatment developments nationwide.
Senator Cassidy noted the federal government’s role in facilitating healthcare advancements: “When the federal government stands in the way of developing better care, there’s a problem.” He advocated for encouragement rather than limitation of biotech innovation.
The Small Biotech Innovation Act seeks to mitigate potential negative effects of the Inflation Reduction Act on drug development by allowing qualifying small biotechs to delay one drug’s entry into IRA negotiations for a year if they meet certain R&D spending criteria. Additionally, it restricts foreign adversary-owned companies from benefiting from this delay.
Further details can be accessed through the full text of the bill online.
