Small Biotech Innovation Act

This bill would let certain small, research‑heavy biotech companies keep some of their drugs out of Medicare’s drug price negotiation program, starting in 2029. To qualify, a company must have five or fewer eligible single‑source drugs and spend a set share of its recent net revenue on research and development. The company must apply to the federal health agency and can appeal if it’s denied .

Key points

• Who is affected: Small biotech makers with five or fewer qualifying single‑source drugs, not tied to certain foreign governments or “covered” foreign countries.
• What changes: If the company meets the research‑spending test, its qualifying drugs are excluded from Medicare price talks beginning with the 2029 pricing cycle. Companies must submit revenue and R&D data and certify it is accurate; an appeal process is available.
• When: Applies to initial price years starting in 2029. If a qualifying company is bought after 2029 by a company that doesn’t qualify, the exception ends the next plan year.

Research spending test (share of net revenue, averaged over the past three years)

• 1 qualifying drug: 30%
• 2 qualifying drugs: 40%
• 3 qualifying drugs: 50%
• 4 qualifying drugs: 60%
• 5 qualifying drugs: 70%.