Small Biotech Innovation Act

This bill creates an exception from Medicare drug price negotiation for certain small biotech companies that invest heavily in research and development, starting in 2029. It amends the Social Security Act to exclude their qualifying single source drugs from the negotiation program.

Sec. 2, Research and development-intensive small biotech manufacturer exception: For initial price applicability years beginning with 2029, a "negotiation eligible drug" does not include a qualifying single source drug of a research and development-intensive small biotech manufacturer. A small biotech manufacturer is defined as having 5 or fewer qualifying single source drugs and not being owned or controlled by a foreign government that is a covered nation. A research and development-intensive small biotech manufacturer must invest at least a specified percentage of its average net revenue from the previous three years in research and development. The applicable percent ranges from 30% for manufacturers with 1 qualifying single source drug to 70% for those with 5. If the manufacturer is acquired after 2029 by another manufacturer that does not meet the definition, the drug loses the exception starting the next plan year. To qualify, the manufacturer must submit an annual application to the Secretary with information on net product revenue and R&D expenditures, a certification of accuracy, and other specified information. The Secretary must also develop a dispute resolution process for manufacturers to appeal a determination that they are not a research and development-intensive small biotech manufacturer, with a decision due by the selected drug publication date for that year.