Presentations Marshall Bursis Presentations Marshall Bursis

The Impact of the Inflation Reduction Act on Early-Stage Biomedical Investment Decisions

When assessing the viability of an investment, investors attempt to calculate the business’s or product’s net-present value (NPV). The NPV combines a project’s likelihood of success with an estimate of the money it may make over time to determine its present value to investors. The price-setting provisions of the IRA reduce the NPV of any drug candidate at launch by 40%. If investors aren’t confident they will earn a return on their investment, they won’t invest in new drug candidates, and most ideas will never leave the laboratory.

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Advocacy Marshall Bursis Advocacy Marshall Bursis

NEW LETTER: Investors and executives urge the Congressional Budget Office to adopt changes to its modeling

CBO’s ability to correctly model investor decision-making is vital to our country’s ability to establish policies that achieve lasting biomedical affordability and continued innovation. In support of CBO’s efforts to improve its model, this letter emphasizes a number of economic and financial first principles, notably that investment is incentivized by expected returns based on discounted profits, not revenue, and adjusted for expected dilution from financings.

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Video Marshall Bursis Video Marshall Bursis

The Investor’s Paradox

Drug development is costly. Who takes the risk and funds the hope of new medicines? Investors do. How do they know which ones will work? They often don't.

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Advocacy Marshall Bursis Advocacy Marshall Bursis

Sign-on letter: Why Fixing the IRA Matters to all of us

Under the drug pricing provisions of the Inflation Reduction Act, small molecule treatments will face Medicare “negotiation” (price setting) that makes brand medicines functionally generic just 9 years after FDA approval. This policy will unwisely skew investment towards harder to manufacture biologics and away from small molecule treatments for diseases of aging. Without both kinds of medicines, we will all be worse off.

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