With eyes on infrastructure policymaking this week, our roundup takes a look at the components of the Democrats’ $3.5 trillion budget framework that could affect the life sciences industry. We also highlight a major investment in surgical robotics, the performance of companies post-merger with a special purpose acquisition company and share which of the large pharma companies are mandating COVID-19 vaccines. Finally, we look at a new policy proposal released by President Biden related to drug pricing.
Each week, we highlight five things you need to know about in the life sciences industry. Here’s the latest.
1. Senate’s infrastructure and budget package includes Medicare expansion and drug pricing curbs
Senate Democrats unveiled their budget resolution for the $3.5 trillion infrastructure bill. The final spending package and budget will undoubtedly change as it makes its way through the House and Senate, but the proposed policies in the current draft provide insight into key priorities.
There are several specific items that life sciences and health care firms should monitor, including an expansion of coverage under Medicare, Medicaid and the Affordable Care Act, and a proposal to give the government negotiating powers for drug prices under Medicare. This aspect of the bill is being touted as a way to pay for a portion of infrastructure spending through reduced prescription drug costs. As higher taxes are the least popular means of paying for government spending, we expect politicians on both sides of the aisle to support cost-saving measures, especially when it comes to low-hanging political fruit like drug pricing.
2. Intuitive Surgical announces $500 million expansion of Georgia campus
Robotic surgery specialist company Intuitive Surgical announced last week a $500 million expansion of its Georgia campus. The expansion will be completed in phases with the entire project scheduled to be completed by 2024. It will add more than 750,000 square feet to Intuitive’s existing facility and increase its campus workforce from 180 people to about 1,200.
Last fall, the company also announced a $100 million venture capital fund focused exclusively on early-stage companies in the robotic surgical and minimally invasive procedure sectors. These announcements support the narrative from our most recent industry outlook that investment in the robotic surgical sector is growing.
3. SPAC mergers for med tech companies show mixed outcomes
Although there has been some cooling in the market for new SPAC initial public offerings, the pace of companies merging with SPACs in the med tech sector is picking back up, with 18 mergers so far this year through July. This article takes a closer look at post-merger performance, capital raised and more.
4. COVID-19 vaccine mandates come to Big Pharma
Gilead, Pfizer and Genentech are among a growing group of large companies in the United States that are mandating that staff get vaccinated prior to returning to the office. The decisions come amid the spread of the coronavirus delta variant and similar decisions by the U.S. federal government, armed forces and numerous other large companies. This could serve as a bellwether of what to expect from other organizations, including smaller life sciences firms.
5. Biden releases new policy proposal to reduce drug costs
During the 2020 election, a portion of Biden’s platform was focused on reducing drug costs. Now as president, Biden is following through and releasing a new policy proposal that seeks to do just that. The new proposal both highlights the important contributions from the life sciences industry and calls for policies that would cap costs for seniors, control drug price increases, encourage the use of generics and biosimilars, and allow states to import drugs from Canada.
