Congressional Budget Office’s Updated Model Predicts Impact of Pricing Legislation on Pharma Innovation

The Congressional Budget Office (CBO) released an updated model intended to predict how drug pricing bills, including Medicare negotiation, would impact pharmaceutical innovation in the United States. The model, like previous iterations, shows little impact to innovation. Legislation aimed at reducing prescription drug prices continues to be a point of contention, with one Senate bill failing to cover the drugs of Americans with healthcare insurance obtained through their employer.

“The Congressional Budget Office on Thursday (Aug. 26) updated its model for estimating how bills that affect drug industry revenue impact drug innovation, and the new model projects a slightly smaller impact on new drug development than CBO’s past “score” of House Democrats’ Medicare drug price negotiation bill. However, the refined CBO model is not that much different from CBO’s 2019 score, and sources said it probably doesn’t change the political dynamics of the debate over Medicare drug price negotiation.” Read more here.

(Source: John Wilkerson, Inside Drug Pricing, 8/27/21)