Small Biotech Innovation Act

The Small Biotech Innovation Act exempts qualifying drugs from Medicare's drug price negotiation program starting in 2029 for small biotech manufacturers that meet specific R&D investment thresholds. To qualify, a company must have five or fewer single-source drugs and spend 30% to 70% of its net revenue on research and development (based on the number of drugs), while not being controlled by a foreign government. Manufacturers must apply annually with financial data and certification of R&D spending, and the exemption ends if the company is acquired by a non-qualifying entity after 2029. This directly affects small U.S.-based biotech firms developing innovative drugs, allowing them to avoid price negotiations under Medicare.