Impact of the Inflation Reduction Act on Innovative Medicines for Patients
June 16, 2023
At Bristol Myers Squibb (BMS), we remain inspired by a single vision: transforming patients’ lives through science. We are constantly working to develop and improve access to life-saving, innovative medicines that will provide hope for more patients and families, investing $9.5 billion in research and development and conducting over 460 clinical trials last year alone.
For example, as a leader in oncology, our scientific breakthroughs have improved how cancer is treated, making long-term survival a possibility for patients across a broad range of solid tumors and blood disorders. The majority of cancer research by the pharmaceutical industry happens after the initial approval as it helps us understand the effect on different patient populations, other types of cancer, and earlier stages of the disease, so more patients can benefit. In fact, nearly 60% of oncology medicines approved a decade ago received approvals for additional indications in later years, and most of those were seven or more years after approval. Unfortunately, this research and progress is now at risk.
Today, we filed a lawsuit challenging the constitutionality of a program in the Inflation Reduction Act (IRA) that requires pharmaceutical companies like BMS, under the threat of significant penalties, to sell their most innovative and effective medicines at government-dictated prices.
Since the IRA’s inception, we have expressed serious concerns about the impact this program will have on research and development and future innovation that can help patients prevail over serious disease. It has already changed the way we look at our development programs in oncology and beyond, whether it’s a decision to advance a new medicine or pursue additional indications for an existing one. This program is bad for innovation—and, in turn, the millions of patients who are counting on the pharmaceutical industry to develop new treatments and cures that save lives and improve health and wellbeing. It also violates the United States Constitution, in at least two ways.
First, the IRA violates the Fifth Amendment, which requires the government to pay a reasonable amount if it takes property for public use. The IRA does this by requiring BMS and other pharmaceutical companies to provide innovative medicines to third parties at prices set by the government, without any requirement that those prices reflect fair market value.
Second, the IRA violates the rights of free speech that are guaranteed by the First Amendment. The IRA makes manufacturers of innovative medicines state publicly that the government's price setting is a true negotiation that resulted in a fair price, even if it was not. The First Amendment protects citizens from just this sort of forced speech.
BMS recognizes the challenges of increasing healthcare costs. We have long supported efforts to meaningfully enhance patient access and lower out-of-pocket costs, and we continue to support provisions in the IRA that will improve affordability for patients who have Medicare coverage for their medicines. We are pleased that the law will help elderly and disabled patients, who are often on fixed incomes, better afford their medicines by capping the amount they have to pay out-of-pocket and allowing them to pay those costs over the course of the year.
We know patients are counting on us to deliver new medicines, and we will continue to advocate for an environment that supports innovation and patient access. BMS has led profound advances in the treatment of cancer, immunological and cardiovascular diseases, and other serious conditions, but our shared focus remains on what we have yet to do.
About Bristol Myers Squibb
Bristol Myers Squibb is a global biopharmaceutical company whose mission is to discover, develop and deliver innovative medicines that help patients prevail over serious diseases. For more information about Bristol Myers Squibb, visit us at BMS.com or follow us on LinkedIn, Twitter, YouTube,
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Cautionary Statement Regarding Forward-Looking Statements
This communication contains certain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. Such forward-looking statements are based on current expectations and projections about our future goals, plans and objectives and involve inherent risks, assumptions and uncertainties, including internal or external factors that could delay, divert or change any of them in the next several years, that are difficult to predict, may be beyond our control and could cause our future financial results, goals, plans and objectives to differ materially from those expressed in, or implied by, the statements. These risks, assumptions, uncertainties and other factors include, among others, our ability to successfully challenge the IRA and the ultimate impact of the IRA on our business, prospects, operating results, and financial condition. No forward-looking statement can be guaranteed. Forward-looking statements in this communication should be evaluated together with the many risks and uncertainties that affect the company’s business and market, particularly those identified in the cautionary statement and risk factors discussion in the company’s Annual Report on Form 10- K for the year ended December 31, 2022, as updated by the company’s subsequent Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission. The forward-looking statements included in this communication are made only as of the date of this communication and except as otherwise required by applicable law, the company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise.