Biotech Group Pegs Drug Law's Cost at $8 Billion in Lost Funding

John Stanford, who runs the life-science venture advocacy group Incubate, said Washington policy is now reshaping where biotech money goes, estimating the Inflation Reduction Act has left small-molecule drug development roughly $8 billion short of what his group would otherwise have expected. He spoke in an episode of The Bio Report podcast, hosted by Daniel Levine, posted on Oct. 20, 2026.

The law sets Medicare price negotiation at nine years after launch for pills and 13 years for biologics. Stanford said about half of a drug's revenue arrives in that four-year window, pushing investors toward biologics; he cited an investor who told the Boston Globe that companies should reformulate products as biologics. Incubate's tracker, which logs securities filings referencing the law, counts 26 abandoned drug programs and 56 abandoned research programs, drawn from more than 300 reports. The group backs the bipartisan EPIC Act to equalize the two clocks.

Stanford also said unpredictable FDA review timelines lead venture funds to hold back capital, and named Kendall Square, the Bay Area and Research Triangle Park as still competitive against China, where he said regulatory reviews fell from about five years to roughly 12 to 13 months in about a decade.

This story was first reported by finance.biggo.com.