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.

Sec. 2, Exception for research and development-intensive small biotech manufacturers: The bill amends the Social Security Act to exclude a qualifying single source drug from Medicare price negotiation if it is made by a research and development-intensive small biotech manufacturer. A small biotech manufacturer is defined as one with 5 or fewer qualifying single source drugs and not 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 certain percentage of its average net revenue from the previous three years in research and development, based on generally accepted accounting principles. The required percentage ranges from 30% for a manufacturer with 1 qualifying drug to 70% for one with 5 qualifying drugs. If the manufacturer is acquired after 2029 by a company that does not meet the definition, the drug loses the exception starting the next plan year. To qualify each year, the manufacturer must apply to the Secretary of Health and Human Services with information on net revenue and R&D spending, a certification of accuracy, and any other required information. The Secretary must create a process for manufacturers to appeal a determination that they are not a research and development-intensive small biotech manufacturer, with the appeal concluded by the selected drug publication date for that year.