Small Biotech Innovation Act

Medicare drug exception for small biotech

This bill would exclude certain small biotech single‑source drugs from Medicare drug price negotiation starting with the 2029 initial price applicability year. To qualify, a firm would have 5 or fewer qualifying single‑source drugs and not be owned or controlled by a foreign government or organized under a covered foreign nation. The firm would need to average R&D spending over the prior three years at or above a tiered percent of net revenue: 1 drug = 30%, 2 = 40%, 3 = 50%, 4 = 60%, 5 = 70%. Manufacturers would have to apply to the Secretary with three‑year net revenue and R&D numbers and certify accuracy. The Secretary would have to provide an appeals process that finishes by the selected drug publication date. If a qualifying firm is acquired after 2029 by a buyer that does not meet the R&D test, the drug would lose the exception at the start of the plan year after the acquisition.