Post-IRA Market Environvment for New and On-market Drugs in the U.S.

Abstract: In the wake of nearly critical layoffs to major drug manufacturers, the fate and health of the industry still remain a question. The IRA itself benefits the U.S. health system and is important to stabilize inflation across consumer categories. Manufacturers must now carefully balance the value-price or value-cost trade-off. Our research indicates that a mix of internal and external factors like profitability, market trends related to competition and regulatory/HTA, and organizational issues will be key to navigating the industry back toward sustainability. Despite drug price inflation and capital investments sustaining much of the industry’s growth in recent years, global markets are linked in this way and need to adapt to these changes. In the case of on-market drugs and generics, the impacts from the IRA have the potential to be more critical from a financial perspective, though it will be some time until the changes materialize.

In this poster, we describe and provide commentary on these factors as well as outline key risks for the future and high-level, strategic recommendations that require additional research on behalf of key decision-makers and their organizations. We also seek to address certain contentious topics like state price transparency, state licensure, impacts to the specialized consulting industry, and lobbyists for managed care organizations. Ultimately, we argue that a decision must be made about our derivative on the accesscurve and that supporting government programs is inherent to the industry’s purpose and does not lead to catastrophic profit margins.

21.02.2024