Inflation Reduction Act (IRA): The Donkey in the Room

The IRA has the potential to drastically alter the landscape of the biopharmaceutical industry. Its aim: to reduce the rate of inflation in pharmaceuticals by implementing price control measures and promoting transparency, making prescription drugs more affordable for consumers. While some proponents argue that cost control will bring much-needed relief to consumers, others - such as Mike Guerra, President and CEO of California Life Sciences, warn that the consequences could be dire: “We must be very clear on just how severe the ripple effects of the IRA, in its current form, can be. New research published by EU based Vital Transformation counts among the consequences hundreds of thousands of job losses as project funding diminishes, while VC companies are adopting a wait-and-see attitude. Also, if such drug pricing provisions had been in place, only six out of 110 therapies approved over the past decade would have made it to patients due to the limitations on research funding and partnerships.” Thus, the IRA has brought a seismic shift to the pharmaceutical industry.