Crying Wolf: Why Negotiating Lower Drug Prices Will Not Harm Pharmaceutical Innovation.

Two papers this week from the Center for Integration of Science and Industry at Bentley University show how fundamental scholarship can reframe the debate around the IRA. The first paper, published in the journal Clinical Trials, examined the finances of 1,378 public biopharmaceutical companies to understand their contributions to pharmaceutical innovation, their primary sources of innovation capital, and how R&D spending has varied in response to changes in revenue or new investment from 2000 to 2018. The second, our new INET working paper, examines the association between indices of drug prices (consumer or producer) and investment in the biotechnology industry.Our models suggest that large pharmaceutical companies could maintain both their profits and the number of new drug approvals at current levels by reallocating R&D spending to later phases of clinical development and refilling their pipelines through licensing or acquisition of clinical-stage products from smaller biotechnology firms.