Drug Research Curbed by Biden's Inflation Reduction Act

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Among the many rule changes stuffed into the Inflation Reduction Act is a measure drug research companies say will hamper their ability to develop new and improved medicines. According to the advocacy group PhRMA, drug price fixing under President Biden’s catch-all elixir for the U.S. economy has created a “Pill Penalty” that will remove incentives for companies to create new drugs for cancer, diabetes, heart disease and other maladies.

According to PhRMA, “small molecule medicines” can be selected for price setting as early as seven years after the FDA’s initial approval, which is long before the end of their average 13-to-14-year effective patent life. “As a result, this Pill Penalty may discourage companies from researching and developing small molecule medicines at all. Additionally, because these medicines can be selected so early, companies are also discouraged from doing R&D in the years following a medicine’s initial FDA approval–putting at risk the progress we’ve made to fight cancer and other diseases,” the group said in a statement.

Analysis of small molecule prescription medicines receiving initial FDA approval between January 1, 2006, and December 31, 2012, by the Partnership for Health Analytic Research (PHAR) finds the IRA could acutely discourage critical post-approval research and development — hindering innovation for cancer, rare diseases and other treatment advances.

The analysis found that more than half of the drugs studied by the partnership were improved at least once after the first seven years of being on the market. Had prices been fixed at the new seven-year milestone, companies may not have had the incentive to keep improving their medicines and the public would have suffered, PhARMA argues.

They have called on Congress to repeal the Pill Penalty and allow drug companies to profit up to the previous 14-year limit, noting the following statistics:

72% of post-approval indications expanded a medicine’s use to new age groups or other defined populations, and 25% were for new disease targets.

61% of small molecule cancer medicines were awarded at least one post-approval indication.

63% of medicines first approved as orphan drugs were awarded at least one post-approval indication.

“Post-approval indications represent important advances for patients and are particularly common for rare diseases and cancer treatments, as researchers learn more and follow scientific leads following initial approval,” the advocacy group said. “Congress must prioritize reforms to fix the Pill Penalty and protect innovation for lifesaving care.”