A Small Fix with Big Reward

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A provision of the Inflation Reduction Act (IRA) that could impact the discovery of new small molecule medicines needs to be fixed. The bipartisan Ensuring Pathways to Innovative Cures (EPIC) Act is just the law to accomplish this important fix. I don’t think the original authors of the IRA fully understood the long-term implications of this part of the IRA. First, a little background.

Small molecule drugs are organic compounds that are combined together in a pill that can interact with our body to combat multiple diseases, infections, etc. They are different from large molecule biologics which are grown in complicated manufacturing processes and are usually injected. While small molecule drugs have been around for a long time, scientific break throughs continue now and will continue as long as a fertile environment for innovation for these types of drugs is maintained.

The IRA subjects small-molecule drugs to price setting nine years after approval by the Food and Drug Administration (FDA), suppressing innovation especially for behavioral health, cancer and rare diseases where treatments tend to be small molecule-based and oftentimes more convenient to patients. Congress must pass the EPIC ACT to bring parity to small molecule drugs by giving them the same 13 years as biologics before being subject to price controls. 

Passage of the EPIC Act would also fix a disincentive the IRA created for continued innovation after approval. After a drug is approved by the FDA and begins being used in our healthcare system, innovation has historically continued, whether through improvements in understanding more about different dosages for different patients or the discovery of other ways and new indications that the drug may treat. This is a common occurrence. 61% of small molecule cancer medicines were awarded at least one post-approval indication. It often takes six or seven years for these improvements or the identification of new indications to be discovered. The drug manufacturer is not going to continue these studies or spend time and resources identifying new indications with such a short time before drugs are subjected to price controls.

Another thing to consider goes back to the reason proponents of the IRA price setting provisions often cited: that some patients will not be able to access the prescription drugs they need due to high costs. However, small molecule drugs are historically less expensive, and patients are more likely to use them and adhere to the proper dosage than often more expensive biologics. The requirement to travel to a doctor’s office or hospital to receive an injection of a biologic is another barrier that reduces adherence. If access for everyone to new medicines really the goal, then encouraging rather than discouraging innovation in small molecule drugs should be at the top of everyone’s mind.

But wait – there’s more. The ability of small molecule drugs to easily dissolve and cross some physiological barriers make them important in brain diseases and fighting cancer. Rare diseases will also benefit by the follow-on innovation of small molecule medicines.

One final observation. Decades ago, before the Bayh Dole and the Hatch Waxman Acts (legislation that encouraged private investment in medicine innovation) America was not the scientific leader in discovering new prescription drugs. As a country, we worked to create an environment where the great scientific minds migrated to American companies, and we built the world’s best machine of innovation. It seems that Washington is doing everything it can to destroy this hard built industry. We are at risk of losing our leadership in innovation. In 2015, the U.S. had twice as many patent applications as China, and in 2020 China pulled even with the U.S. Then, in 2022, the number of international patents filed from inventors in China surpassed applications from the U.S. The COVID experience showed what impact our reliance on foreign products and supply lines had on the health of our country. I want my kids and grandkids to have the opportunity to have first access to new innovations.

The EPIC Act is a bipartisan fix to a part of the IRA that I think was shortsighted and maybe even unintentional. It is hard, in these polarized times, to get everyone together to right this wrong. But it can, and should, be done. This reelection year is the perfect time to remind your lawmakers what is important to you, the voter. Tell them you want them to put petty differences aside and fix the IRA for the benefit of everyone.

Best, Thair

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