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The HEAL Network aims to bridge the gap between academic insights and real-world policymaking. As Congress, the White House, and federal agencies face some of the most consequential decisions in health policy in decades, our mission is to elevate the best available academic ideas, research, and data so that policymakers have the evidence they need when it matters most.

The HEAL Network’s Research Roundup series embodies this mission by curating new and notable work on issues at the center of national discourse. This edition focuses on biopharmaceutical innovation, highlighting available resources across five areas driving current legislative and regulatory debates:

• Most-Favored-Nation Pricing: International reference pricing and its market implications.
• The Inflation Reduction Act (IRA): Early impacts and long-term projections of federal drug negotiations.
• The 340B Drug Pricing Program: Compliance, growth, and its evolving role in the healthcare safety net.
• Intellectual Property: The balance between patent protections and generic or biosimilar competition.
• Payers & Pharmacy Benefit Managers (PBMs): Transparency, rebates, and their influence on out-of-pocket costs.

Most Favored Nation Pricing

Research indicates that adopting a Most-Favored-Nation (MFN) drug pricing model introduces distinct economic and regulatory shifts. Key outcomes include an explicit trade-off between reduced prescription costs and a projected decrease in domestic pharmaceutical innovation and long-term treatment development. Additionally, shifting to an MFN model affects global market dynamics, reducing U.S. clinical competitiveness relative to rapidly expanding foreign markets like China, while integrating international pricing metrics into a domestic system where most beneficiaries already utilize existing out-of-pocket spending caps.

• Seo, D., Thorpe, K. E., & Mattingly, T. J., II. (2026). The QALY paradox: An unintended consequence of most favored nation drug pricing. Health Affairs Forefront. Link.
• Grueger, J., Martin, K., & Sullivan, S. D. (2025). Referencing drug prices of other countries may not sustainably lower prices in the United States: Lessons from Europe. Value in Health, 28(9). Link.
• Philipson, T.J., Zhang, D., Zhao, Q., Johnson, H. (2025). The Impact on Patient Health of Most-Favored-Nation Pricing of Already Marketed Drugs. The University of Chicago. Link.
• Philipson, T.J., Zhang, D., Zhao, Q. (2025). International Comparisons of Prices for Drug Prescriptions. The University of Chicago. Link.
• IQVIA. (2024). U.S. Medicine Use Trends 2026. Link.
• U.S. Government Accountability Office. (2023). Medicare Part D: CMS Should Monitor Effects of Rebates on Plan Formularies and Beneficiary Spending. Link.

The Inflation Reduction Act (IRA)

Data concerning the Inflation Reduction Act (IRA) highlights distinct shifts across clinical development and beneficiary cost-sharing structures. On the development side, the law introduces an economic trade-off between near-term price adjustments and long-term pharmaceutical research, evidenced by notable declines in new small-molecule clinical trials and reduced post-approval lifecycle research for existing medicines. For patients, the IRA’s structural modifications show a dual impact on affordability: while initial caps and benefit expansions significantly decreased cost-related medication nonadherence, subsequent plan restructuring and benefit designs have simultaneously resulted in higher deductibles, narrower formularies, and altered cost-sharing metrics that can increase out-of-pocket expenses for certain beneficiaries prior to meeting maximum caps.

• Long, G. (2026). Trends in industry-sponsored clinical trial activity since passage of the Inflation Reduction Act. Journal of Medical Economics. Link.
• IQVIA. (2026). Impacts of the proliferation of innovation. Link.
• Magnolia Market Access. (2026). When lower prices don’t mean lower costs: How Part D benefit changes are shifting out-of-pocket spending in 2026 under the Inflation Reduction Act. Link.
• Marinacci, L.X., Mein, S., Rome, B.N., Wadhera, R.K. (2026). Cost-related medication nonadherence after the Inflation Reduction Act. JAMA Internal Medicine, 186(5), 609-617. Link.
• Anderson, D.M., McEnany, M., Petry, S.E., Anderson, K.E. (2026). Inflation Reduction Act changes to Part D plan design: lower premiums, higher deductibles, and some smaller formularies. Health Affairs, 45(4), 210-219. Link.
• Mattingly, T. J., II. (2025). In price negotiations, Medicare should reassess how it determines a “qualifying single source drug.” Health Affairs Forefront. Link.
• Parente, S., Chen, A., & Mayer, B. (2025). Disaggregating Innovation: Labor Productivity Gains from Biologic vs. Small Molecule Drugs and Implications of U.S. Drug Pricing Policy. The HEAL Network. Link.
• Grabowski, H., DiMasi, J. A., & Long, G. (2024). Post approval innovation for oncology drugs and the Inflation Reduction Act. Health Affairs, 43(10), 1400–1409. Link.
• Philipson, T., Ling, Y., & Chang, R. (2023). The Impact of Price Setting at 9 Years on Small Molecule Innovation Under the Inflation Reduction Act. The University of Chicago. Link.

The 340B Drug Pricing Program

Research regarding the 340B Drug Pricing Program highlights significant shifts in its scale, financial structure, and system-wide economic incentives. Data shows rapid growth in the program, characterized by a substantial increase in discounted purchases that outpaces overall medicine spending and impacts federal and state healthcare costs. This expansion has introduced financial dynamics that correlate with higher per-beneficiary spending and altered prescribing patterns at participating hospitals. Structurally, a portion of the program’s revenue is directed toward third-party administrators and contract pharmacy subsidiaries rather than direct patient care, while studies indicate that these institutional financial gains have not consistently correlated with measurable expansions in healthcare access or improved health outcomes for low-income and underserved populations.

• • Popovian, R., Sydor, A. M., Czubaruk, K., Walker, M., & Smith, W. (2026). Financial outcomes and community benefit in the 340B program: Comparing 340B and non-340B hospitals. medRxiv. Link.
  • Nikpay, S., Reinke, M., & Watts, E. (2026). When safety-net programs compete: Medicaid, 340B, and the battle over drug discounts. Health Affairs, 45(1), 54–62. Link.
  • Sun, C., Karne, H., & Martin, R. (2026). The cost of 340B to state employee health plans. IQVIA. Link.
  • Nikpay, S., Reinke, M., & Quinones, N. (2026). Stretching scarce authorizing legislation as far as possible: A legislative history of the 340B drug pricing program. The Milbank Quarterly, 104(3), 0520. Link.
  • Minnesota Department of Health. (2026). 340B covered entity report: report to the legislature. Link.
  • Congressional Budget Office. (2025). Growth in the 340B Drug Pricing Program. (CBO Publication No. 60661). Link.
  • DiGiorgio, A. M., & Williams, D. (2025). Reform the 340B drug pricing program as a capped safety-net grant. Health Affairs Forefront. Link.
  • Long, R., Mulligan, K., Frasco, M. A., Trish, E., & Chernew, M. (2025). Cui bono? Misaligned incentives in the 340B program. Leonard D. Schaeffer Center for Health Policy & Economics, University of Southern California. Link.
  • IQVIA. (2025). How will a rebate model impact cash flow in the 340B drug pricing program? Link.
  • Masia, N., Filson, D., Martin, S., Neumann, U. (2025). Income, health, and racial gaps between 340B hospitals, child sites, and nearby neighborhoods. Health Affairs Scholar, 3(7), qxaf121. Link.
  • Coughlin, M., Mishra, D.D. (2025). Local population characteristics and access equity of 340B contract pharmacies. Health Affairs Scholar, 3(7), qxaf117. Link.
  • U.S. Senate Committee on Health, Education, Labor, and Pensions. (2025). Congress must act to bring needed reforms to the 340B drug pricing program (Majority Staff Report). Link.
  • Horn, D. (2025). The incentive to treat: physician agency and the expansion of the 340B drug pricing program. National Library of Medicine. Link.
  • Robinson, J.C., Whaley, C., Dhruva, S.S. (2024). Hospital prices for physician-administered drugs for patients with private insurance. The New England Journal of Medicine, 390(4). 338-345. Link.
  • DiGiorgio, A. M., & Winegarden, W. (2024). Reforming 340B to serve the interests of patients, not institutions. JAMA Health Forum, 5(7), e241356. Link.
  • Chang, J., Karaca-Mandic, P., Nikpay, S., Jeffery, M.M. (2023). Association between new 340B program participation and commercial insurance spending on outpatient biologic oncology drugs. JAMA Health Forum, 4(6), e231485. Link.

The Role of Intellectual Property

Research regarding the U.S. intellectual property (IP) framework highlights its role in balancing market exclusivity, market-driven competition, and long-term research investment. Data demonstrates that fixed exclusivity periods provide a predictable window—averaging roughly 13 to 14 years for prominent medicines—which incentivizes both initial drug discovery and subsequent next-in-class innovations. The resulting entry of branded and generic competitors is associated with significant downward pressure on net prices and commercial spending, ultimately contributing to average public program prescription costs that are 18 percent lower than other OECD nations. Conversely, analyses indicate that reducing these protected market windows carries substantial economic trade-offs, where a two-year reduction in exclusivity mirrors severe revenue declines and is projected to decrease future research and development investments by up to 25 percent.

• Corzo Santamaría, T., Portela, J., & Schwartz, E. S. (2026). Valuation of regulatory risk on pharmaceutical R&D. National Bureau of Economic Research. Link.
• Philipson, T., Zhang, Deyu., & Zhao, Q. (2025). International comparison for drug prescription prices. The University of Chicago. Link.
• Zheng, H., Patterson, J. A., & Campbell, J. D. (2025). Early impact of the Inflation Reduction Act on small molecule vs biologic post-approval oncology trials. Health Affairs Scholar, 3(8). Link.
• Nordyke, R.J., Patterson, J.A., Motyka, J., March, B., Kirson, N.Y., Long, G. (2025). The impact of the Inflation Reduction Act’s drug price negotiation program on incentives for clinical development of new drugs. ScienceDirect. Link.
• Hemphill, C. S., & Sampat, B. N. (2025). Patents, innovation, and competition in pharmaceuticals: The Hatch-Waxman Act after 40 years. Journal of Economic Perspectives, 39(2), 27–52. Link.
• Grabowski, H., DiMasi, J. A., & Long, G. (2024). Postapproval innovation for oncology drugs and the Inflation Reduction Act. Health Affairs, 43(10), 1400–1409. Link.
• Dickson, S., Gabriel, N., & Hernandez, I. (2023). Changes in net prices and spending for pharmaceuticals after the introduction of new therapeutic competition, 2011–19. Health Affairs, 42(8), 1062–1070. Link.
• Schulthess, D., Bowen, H. P., Popovian, R., Gassull, D., Zhang, A., & Hammang, J. (2023). The relative contributions of NIH and private sector funding to the approval of new biopharmaceuticals. Therapeutic Innovation & Regulatory Science, 57(1), 160–169. Link.
• Lietzan, E. (2022). Solutions still searching for a problem: A call for relevant data to support “evergreening” allegations. Fordham Intellectual Property, Media and Entertainment Law Journal, 32(4), 879–923. Link.
• Grabowski, H., Long, G., Mortimer, R., & Bilginsoy, M. (2021). Continuing trends in U.S. brand-name and generic drug competition. Journal of Medical Economics, 24(1), 908–917. Link.

Payers & Pharmacy Benefit Managers (PBMs)

Research regarding health insurers and Pharmacy Benefit Managers (PBMs) underscores their expanding financial scale and systemic influence over healthcare expenditures and patient cost structures. Data indicates that combined revenue for major insurers has grown to encompass roughly 22 percent of National Health Expenditures alongside rising profit margins, a trend occurring in tandem with multi-year increases in benchmark plan premiums and average deductibles. Within this landscape, financial dynamics demonstrate an upward shift in commercial out-of-pocket costs, driven in part by cost-sharing structures where manufacturer rebates are typically retained by “middlemen” rather than passed to the pharmacy counter, occasionally resulting in patients paying cost-shares based on list prices that exceed actual insurer costs. Furthermore, insurers increasingly utilize formulary restrictions and claims denials to manage the utilization of new branded medicines, while sector-wide economic comparisons reveal high rates of return on capital and low relative research and development investment compared to traditional biopharmaceutical models.

• IQVIA. (2026). Increasing payer control for Medicare patients initiating branded medicines. Link.
• IQVIA. (2026). How PBMs’ vertically affiliated pharmacies shape access pathways for oncology and autoimmune patients. Link.
• Rucker, J.A., Beinfeld, M.T., Clifford, K.A., Campbell, J.D., Motyka, J., & Chambers, J.D. (2025). Drug coverage policies and clinical guidelines alignment: Most coverage decisions include additional restrictions. Health Affairs, 44(7), 839–845. Link.
• Trish, E., Blaylock, B. (2025). Shifting cost-sharing burden to beneficiaries in Medicare Part D. Leonard D. Schaeffer Center for Health Policy & Economics, University of Southern California. Link.
• Fulton, B. D., Arnold, D.R. (2025). UnitedHealthcare pays Optum providers more than non-Optum providers. Health Affairs, 44(11), 1948–1955. Link.
• Federal Trade Commission. (2025). Specialty generic drugs: A growing profit center for vertically integrated pharmacy benefit managers (Second Interim Staff Report on Prescription Drug Middlemen). Link.
• Federal Trade Commission. (2025). Specialty generic drugs: A growing profit center for vertically integrated pharmacy benefit managers (Second Interim Staff Report on Prescription Drug Middlemen). Link
• Federal Trade Commission. (2024). Pharmacy benefit managers: The powerful middlemen inflating drug costs and squeezing Main Street pharmacies (Interim Staff Report). Link.