Letter to Senate Finance Committee on Policy Options to Lower Drug Prices

By SBE Council at 17 August, 2026, 11:42 am

The Honorable Ron Wyden

Ranking Member

U.S. Senate Committee on Finance

219 Dirksen Senate Office Building

Washington, D.C. 20510

Re: Request for Information on Common Sense Policy Options to Lower Drug Prices for Patients

Dear Ranking Member Wyden,

The Small Business & Entrepreneurship Council (SBE Council ) appreciates the opportunity to respond to the Senate Finance Committee's Request for Information on policy options to lower prescription drug costs. For more than 32 years, SBE Council has worked to advance policies that encourage investment, innovation, startup activity and economic growth.

SBE Council opposes expanding the Inflation Reduction Act's drug price controls, which would deter biotechnology innovation and harm the small businesses driving it.

America's biotechnology leadership depends on entrepreneurs and startup companies. Smaller and mid-sized biopharmaceutical companies are responsible for 76% of therapies in the clinical-stage pipeline.

Small biotechnology companies also play an outsized role in developing some of the most significant medical advances. They originated 46% of first-in-class cancer treatments approved from 2010 to 2020 - more than three times the 14% share that solely originated at large pharmaceutical companies.

Simply put, tomorrow's medical breakthroughs depend on entrepreneurs being willing, and able, to pursue risky research ideas today and finding the capital needed to bring their lifesaving and life-changing innovations to the marketplace,

Unlike established pharmaceutical manufacturers, biotech startups rarely have existing commercial products that generate revenue. They rely on venture capital and other private investment to finance years of research, clinical development, and regulatory review before they can bring a new medicine to patients. Bringing a new medicine to market often requires more than a decade of research. Only about one in 10 drugs entering clinical trials ultimately receive FDA approval.

Investors accept that level of risk because successful medicines have the potential to generate substantial returns.

The Inflation Reduction Act's price controls have already changed how companies and investors decide which medical research projects are worth pursuing. Firms have scrapped at least 56 research programs and 26 potential medicines since the IRA became law, according to a tracker maintained by Incubate, a coalition for biotech venture capitalists.

Other studies show a similar pattern. One analysis found that, in the first 29 months after the law passed, the number of new clinical trials for small-molecule drugs fell by about 25%. A different study estimated that the law led to 28 fewer industry-funded clinical trials involving already approved drugs per month.

Expanding the number of medicines subject to Medicare price setting, accelerating the timeline before negotiated prices take effect, and incorporating foreign prices into Medicare negotiations would all reduce the expected return on successful therapies. Those policies would make biotech startups less attractive to investors.

Rather than expanding the Inflation Reduction Act's price-control framework, Congress should pursue reforms that improve affordability without discouraging private investment in new medicines.

Greater healthcare price transparency is one such approach. Congress ought to give patients, employers, and insurers information about actual negotiated prices rather than opaque list prices. This would empower consumers to make informed choices and promote competition without expanding government price-setting.

Congress should not force patients to choose between affordable medicines today and new treatments tomorrow. By boosting transparency and market competition, lawmakers can lower costs while preserving the investment incentives that allow small biotechnology companies to develop the next generation of medical breakthroughs.

Sincerely,

Karen Kerrigan, President & CEO