Biotechs heed political headwinds for drug pricing negotiations and partnerships

The extended reach of US government and international relations is leaving biotechs with the challenge of navigating the everchanging waters of drug policy, experts said at the 2024 BIO CEO & Investor Conference in New York.

One of the biggest stories from a drug policy and pricing perspective remains the Inflation Reduction Act, which was a major focal point at a panel on understanding pricing and access to medicines during an election year, which was held on 27 February.

IRA drug negotiations are inherently political, given that 2024 is an election year and the negotiated drug prices are meant to be public in September, says Erin Estey Hertzog, partner of the New York-based law firm Foley Hoag. The manufacturers of the first 10 drugs targeted for price negotiation have already received an initial offer, she explained. If the companies do not come to agreement on price, then they will incur a hefty tax.

Lindsay Androski, CEO of Roivant Social Ventures, said the IRA and other similar efforts undermine industry patents. She went on say that biotechs are currently under pressure from the Bayh-Dole Act, which allows the government to exercise “march in rights” to take over a license in certain circumstances like if the drug is based on taxpayer-funded research that is inaccessible to the public.  

Another aspect that has lately been in the news is the collaboration with foreign biotech companies, particularly from China. A few weeks ago, it was announced that a bipartisan group of lawmakers are actively pursuing a formal investigation and sanctions against WuXi given the company’s alleged connections to the Chinese military.

Bills—that will likely gain bipartisan support—that restrict companies from using US money to work with Chinese operations, namely manufacturers BGI and WuXi, said Rick Weissenstein, the Managing Director of Washington Research Group.

“The lens they’re [the US government] looking through is if China went to Taiwan and we went in to support them, what could the Chinese government do? What could they shut down? And the answer is a lot,” Weissenstein explained. The impact of US-China relations on the biotech industry is here to stay; and this makes it necessary to actively consider where companies will turn to for manufacturing to avoid manufacturing atrophy, he elaborated.

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