The Inflation Reduction Act’s Role in Shaping Pharmaceutical Investment Strategies

Author

Grace Harbour, University of New Hampshire, DurhamFollow

Date of Award

Spring 2024

Project Type

Senior Honors Thesis

College or School

PAUL

Program or Major

Finance

First Advisor

Steven Irlbeck

Abstract

The impact of the Inflation Reduction Act of 2022 on the financial strategies of pharmaceutical companies is the focus of this study, emphasizing research and development and capital expenditures. The act introduces a significant change in U.S. healthcare policy by enabling Medicare to directly negotiate the prices of select drugs. Employing a difference-in-differences analysis framework, this study analyzes data from both treated and control firms from Q1 2020 to Q4 2023 to evaluate the immediate financial responses of pharmaceutical companies to this significant legislative change.

Recommended Citation

Harbour, Grace, "The Inflation Reduction Act’s Role in Shaping Pharmaceutical Investment Strategies" (2024). Honors Theses and Capstones. 819.
https://scholars.unh.edu/honors/819