Comments Submitted on CMS’s IPAY 2029 Modification: SBE Council Urges Withdrawal

By SBE Council at 17 August, 2026, 11:39 am

Centers for Medicare & Medicaid Services

7500 Security Boulevard

Baltimore, MD 21244

Re: CMS-2026-2080-0001 - Medicare Program: Medicare Drug Price Negotiation Program and Medicare Prescription Drug Benefit Program

Dear Dr. Mehmet Oz:

On behalf of the Small Business & Entrepreneurship Council (SBE Council), I appreciate the opportunity to comment on the Centers for Medicare & Medicaid Services proposed rule regarding "Medicare Program: Medicare Drug Price Negotiation Program and Medicare Prescription Drug Benefit Program." SBE Council opposes CMS's proposed modification for initial price applicability year (IPAY) 2029 that would change how the agency identifies a "qualifying single source drug" under the Medicare Drug Price Negotiation Program created by the Inflation Reduction Act (IRA).

America's Biotechnology Leadership Depends on Entrepreneurs and Investment

Biotechnology firms and emerging startups play an important role in America's medical innovation ecosystem. From 2020 to 2024, emerging biopharma companies accounted for 46 percent of novel U.S. drug launches and 56 percent of launches through the 505(b)(2) pathway, which can be used to develop new formulations of existing medicines.

These companies pursue new scientific ideas, develop promising technologies, and take significant risks to bring new and improved treatments to patients. That work requires substantial capital, often from outside investors who fund research, development, and clinical trials years before a product generates revenue. Investors are willing to take those risks because successful innovations can generate returns.

However, the policy CMS is now considering could make those investments significantly less attractive. By grouping separately approved medicines into a single product for price negotiation under this proposal, CMS would disregard FDA's distinct approvals and move up the negotiation clock, shortening the window to recoup investment and signaling to innovator companies that improving an existing medicine isn't worth the risk. If a new or improved medicine is subject to government price controls, often set below market value, on the same date as the original biologic, investors are less likely to see a return on the capital they put at risk. That uncertainty could make it harder for smaller firms to attract funding, leaving promising innovations without the resources needed to reach patients.

The Proposal Could Discourage Follow-On Innovation

Follow-on innovations can make treatments easier to administer with fewer adverse events, more convenient, and more accessible for patients. But these improvements require innovators to commit additional years and resources to advance these technologies, without any guarantees of success. For small biotechnology companies operating with limited resources, that uncertainty can determine whether a promising project moves forward at all.

Halozyme Therapeutics exemplifies the important role emerging biotechnology companies can play in follow-on innovation. The company developed a drug-delivery technology that has helped transform certain medicines administered through lengthy intravenous infusions into subcutaneous injections delivered in minutes. That technology was ultimately used to develop Darzalex Faspro, a modification of an existing cancer treatment that can be administered subcutaneously in approximately 3 to 5 minutes rather than via a multi-hour infusion.

Federal policy should encourage new firms to enter the biotechnology market and compete to develop better treatments, not create additional barriers to investment and innovation through an expanded application of Medicare price controls.

Conclusion

SBE Council urges CMS to withdraw the proposed modification from IPAY 2029. CMS should not expand the IRA's price-control framework in ways that further discourage investment in new and improved medicines. America's biotechnology leadership depends on a stable and predictable ecosystem in which entrepreneurs can take risks, startups can attract capital, and investors have incentives to support promising research that fuels the next generation of medical innovation.

Thank you for the opportunity to comment on this important issue.

Sincerely,

Karen Kerrigan
President & CEO