Incubate Responds to Next 15 Drugs Selected for Medicare Price Controls

WASHINGTON (January 28) -- Yesterday, the Centers for Medicare & Medicaid Services announced the third round of drugs subject to Medicare price controls under the Inflation Reduction Act. The new government-set prices will affect medicines covered under both Medicare Part D and Medicare Part B and take effect in 2028.

Incubate's executive director, John Stanford, issued the following statement in response:

"The latest announcement from CMS represents a significant expansion of the federal government's price-setting agenda -- one that continues to threaten medical innovation and patient access to medicines. For the first time, this program now reaches beyond Part D to impact Part B medicines as well, affecting treatments that patients receive in physician offices and outpatient care settings.

"This third round of price controls again highlights one of the Inflation Reduction Act's most damaging distortions. Under the law's pill penalty, small molecule treatments are subjected to government price controls four years earlier than biologics, discouraging investment in an entire class of affordable and accessible therapies. Four of the 15 drugs selected were only eligible because of the pill penalty.

"When policymakers impose price controls on medicines, that introduces a level of uncertainty for investors that makes it far more difficult to support the next generation of cures. In the long term, that results in fewer follow-on innovations and fewer new treatments. When scientific progress is replaced by government mandates, patients lose.

"The consequences are already visible. Since the IRA was enacted in 2022, life sciences companies have shuttered at least 55 research programs and discontinued at least 26 drugs in development, including treatments for cancer, psychiatric disorders, hepatitis B, and other serious conditions.

"Incubate will continue to support reforms like the bipartisan Ensuring Pathways to Innovative Cures (EPIC) Act that would put small molecules and biologics on the same timeline for price negotiation at 13 years. Such a reform would create a more balanced and predictable framework and protect medical innovation and patient access."

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About Incubate

Incubate is a 501(c)(4) organization of venture capital firms representing the patient, corporate, and investment communities. Our primary aim is to educate policymakers on the role of venture capital in bringing promising treatments to patients in need.