IRA Drug Pricing Implications Impact Pharma Views On Deal Terms, Valuations

Last year’s Inflation Reduction Act, which gives Medicare the ability to negotiate drug prices starting in 2026, already is having an impact on big pharma company deal-making strategies, according to business development executives speaking at the annual Global Life Science Partnering and Investor Conference, hosted by the California biotech industry association Biocom, in San Diego.

The IRA mandates that Medicare begin pricing discussions for the drugs it spends the most on nine years after a small molecule wins US Food and Drug Administration approval and 13 years after a biologic reaches the market. Most of the early discussion about the IRA’s impact has focused on R&D strategy, but there are implications for BD as well. Merck & Co., Inc. CEO Rob Davis discussed at the Goldman Sachs Healthcare CEOs Unscripted Conference how the law played into its $1