The Inflation Reduction Act Has Harmful Side-Effects for Cancer Patients
By John Murphy
Between 2000 and 2016, new therapies helped prevent more than 1.3 million cancer deaths. Since then, scientific progress has only accelerated.
Yet despite the groundbreaking achievements of scientists around the country, the future of cancer research looks less promising. That's because provisions of the Inflation Reduction Act (IRA), which became law in August, have added uncertainty to the already risky process of developing new medicines.
In response, biopharmaceutical firms are being forced to scale back work on new cancer drugs. Until lawmakers modify the rules, the new provisions will continue to derail the fight against a disease.
Of course, the architects of the IRA didn't set out to discourage life-saving research. But the law is causing unintended consequences.
The IRA authorizes the Secretary of Health and Human Services to "negotiate" the price Medicare pays for certain medicines. With stiff penalties for companies that don't comply, these aren't so much negotiations as price controls.
The goal was to save the federal government money on medications. The problem is that new medicines are extremely costly to develop, requiring enormous amounts of private investment.
By squeezing opportunities for investors to earn returns, price controls will drive money away from pharmaceutical innovation -- as is already starting to happen.
Certain areas of research will feel the impact more than others, because IRA price controls apply differently to different kinds of medicine. So-called "small molecule" drugs are subject to price controls just nine years after earning FDA approval. By contrast, biologics -- complex medicines derived from natural sources -- aren't subject to price controls for 13 years.
Most pharmaceuticals on the market today, including at least 89 anti-tumor drugs for treating cancer, are small-molecule.
But the IRA disincentivizes and penalizes this critical research -- and robs patients of life-changing new treatments. Given the choice between a nine-year and a 13-year window until price controls kick in, many companies will choose to focus on biologics.
Much research on oncology medicines also happens after FDA approval. That's when scientists perform additional tests to determine whether a medicine developed to treat one cancer is effective at treating another. But the threat of near-term price controls makes companies much less likely to invest in additional post-approval research.
We're already seeing companies move away from small-molecule research. For instance, Eli Lilly said it would stop work on a small-molecule treatment for blood cancer that was already in clinical trials. "In light of the Inflation Reduction Act, this program no longer met our threshold for continued investment," a company spokesperson told Endpoints News. In recent weeks, Novartis and GSK have also cancelled or suspended cancer-drug projects.
Cancer isn't the only research area that will suffer. For example, for neurological diseases like Alzheimer's, small-molecule medicines offer some of our best prospects for breakthroughs. Meanwhile, the drug company Alnylam recently ended plans to test its drug Amvuttra to treat the rare Stargardt eye disease, citing the potential impact of the IRA.
This unfortunate trend is likely to get worse as long as IRA price controls remain in place. To address it, Congress should entirely reevaluate the price control mechanism of this law, and at a minimum, apply the same 13-year window to both small-molecule drugs and biologics.
Lawmakers need to act soon, before researchers have no choice but to divert more resources away from small-molecule cancer medicines. Drug-pricing reform shouldn't come at the expense of patients who are fighting for their lives.
John Murphy is the Chief Policy Officer and Healthcare Counsel at the Biotechnology Innovation Organization.
