“Academic literature estimates the effect of future drug revenues on R&D spending and finds that, on average, a 1 percent reduction in revenue leads to a 1.5 percent reduction in R&D activity,” a 2021 paper from University of Chicago’s Tomas Philipson and Troy Durie found.
Applying that the Inflation Reduction Act, they project it will decrease R&D spending by “about 18.5 percent, amounting to $663 billion” by 2039. They project this will lead to “135 fewer new drugs.”
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