Press Releases | July 11, 2025
Analysis found that drug research spending “increased to record levels” in the six quarters following the IRA’s passage in 2022
WASHINGTON, D.C. — New analysis from Bentley University demolishes Big Pharma’s core talking point that Medicare negotiation would kill drug research and development (R&D). The study found that after flatlining from 2020 to 2022, drug R&D spending surged to record levels in the six quarters following the Inflation Reduction Act’s passage — the exact opposite of what the industry claimed would happen.
Researchers from the university’s Center for Integration of Science and Industry examined 134 drug companies and found that R&D spending jumped from $211 billion in the 18 months before the passage of the IRA to over $247 billion in the 18 months that followed, alongside rising research intensity across the sector. They described the results as a “snapshot of a robust industry that remains committed to innovation despite concerns about future drug prices under the IRA.”
“The numbers prove what we’ve known all along: Big Pharma’s claims about Medicare negotiation harming innovation are nothing but smoke and mirrors,” said Merith Basey, Executive Director of Patients For Affordable Drugs Now. “While the industry has continued to publicly cry wolf about R&D, profits and research budgets have grown to record levels. This report is a clear reminder that the Trump Administration can negotiate much harder for the next round of drugs, safe in the knowledge that the Medicare Negotiation Program is supported by 88% of Americans. Despite Pharma’s fearmongering, lowering drug prices for Americans doesn’t have to mean sacrificing robust innovation — patients need and deserve to have both.”
These findings come on the heels of PhRMA’s False Claims About “Unintended Consequences” of the Inflation Reduction Act, a February report by P4AD that exposed how the pharmaceutical industry’s dire warnings about the IRA were wholly unsupported by evidence. Big Pharma’s attacks on Medicare negotiation have so far been rejected in court, and the new Bentley University data further confirms that the program has not stifled innovation, but instead coincided with unprecedented investment in drug research.
Meanwhile, pharma lobbyists continue to push for carveouts like the ORPHAN Cures Act — which was passed by Congress and signed into law last week — granting pharmaceutical manufacturers a massive $5 billion handout by exempting additional drugs from Medicare negotiation. The industry relies on narratives around negotiation harming innovation to push for these giveaways, but their fearmongering has once again been disproven.
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Patients For Affordable Drugs is the only national patient advocacy organization focused exclusively on policies that lower prescription drug prices. We empower and mobilize patients by amplifying their experiences with high drug prices to hold those in power to account and fight to shape and achieve system-changing policies that make prescription drugs affordable for all people in the United States. P4AD does not accept funding from organizations that profit from the development and distribution of drugs. To learn more, visit PatientsForAffordableDrugs.org.