An inflection point comes for Pharmaceutical Companies

Rita McGrath
6 min readJan 29, 2024

The Inflation Reduction Act for the first time allowed Medicare and Medicaid to negotiate with drugmakers for pharmaceutical prices. It also contained a much less discussed provision regarding patent protections. The law sets different exemption times for “small molecule” drugs that can be taken in pill form and “large molecule” ones that have to be injected or infused. This has the potential to change the structure of incentives for the Pharma industry and not necessarily in a way that benefits patients.

The byzantine US market

--

--

Rita McGrath

Columbia Business School Professor. Thinkers50 top 10 & #1 in strategy. Bestselling author of The End of Competitive Advantage & Seeing Around Corners.