July 18, 2025
Study Debunks Pharmaceutical Industry’s Claims That Medicare Drug Price Negotiation Would Harm R&D
A new study by Bentley University debunks the pharmaceutical industry’s claims that the Medicare drug price negotiation law would harm innovation and research. Drug research and development (R&D) spending actually increased after it passed despite these assertions, according to the analysis.
The study evaluated spending at 134 corporations and found that R&D spending surged from $211 billion to more than $247 billion after the law passed in 2022, surpassing record levels.
Other data indicates that equity investments decreased in 2021, but then stabilized and even grew after 2022. Additionally, drug mergers and acquisitions were not negatively impacted, with
pharmaceutical corporations engaging in more acquisitions of valuable firms between 2022 and 2025.
Pharmaceutical lobbyists have used similar rhetoric when defending their monopoly pricing power, most recently when working to pass the so-called ORPHAN Cures Act, which exempts more drugs from Medicare price negotiation and gives drugmakers a massive $5 billion windfall.
“This research confirms that pharmaceutical corporations exaggerated the potential negative impacts of the Inflation Reduction Act so they could continue to exploit patients and maintain the industry’s drug pricing monopoly,” said Richard Fiesta, Executive Director of the Alliance. “Since R&D is clearly thriving at these companies, we must make sure they negotiate in good faith,
protect Medicare drug price negotiation, and work to expand the number of eligible prescription drugs.”
This was originally published in the July 18, 2025 edition of the Friday Alert. Read the full length version and see other Friday Alert editions here.
