Biotech stocks are rolling over a little, possibly due to the release of Senator Al Franken and Democrats’ proposed bill to curb drug prices in the U.S, the Improving Access to Affordable Prescription Drugs Act.
There are no major surprises in the bill, sticking mostly to proposals that we’ve discussed over the last few months: giving Medicare the ability to negotiate prices, like Medicaid; allowing drugs to be imported from Canada and similar “safe” markets; removing hurdles for generic drugmakers and punishing “pay-for-delay” schemes; and reducing the exclusivity period on some drug produces (NCEs from 5 to 3 years, and biologics from 12 to 7 years).
All of these initiatives would reduce the potential reward involved in developing drugs, for both investors (broadly) and companies.
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