Freedom Line Blog

In recent days, we at CFIF have marked the ignominious one-year anniversary of the Biden Administration’s misnamed “Inflation Reduction Act” (IRA) by noting its particularly negative impact on pharmaceutical innovation and, in turn, the nation’s health and wellbeing.

As acknowledged by the United States Senate Committee on Homeland Security  as well as groups like the American Cancer Society, Americans are already confronting alarming and unprecedented drug shortages in the wake of the IRA.

To mark today’s date of September 13 – or 9/13 – it’s appropriate to note a different but significant 9-13:  That refers to the indefensible distinction that the IRA makes between what are known as “small-molecule” and “large-molecule” drugs.

Specifically, the IRA imposes destructive price controls on small-molecule drugs merely 9 years following Food and Drug Administration (FDA) approval, while waiting 13 years to impose those price controls on large-molecule drugs.  Although price controls of any duration and of any type only serve to create shortages and discourage innovation, that baseless disparity in the IRA needlessly discourages investment in small-molecule pharmaceuticals.

As cogently stated by leading scientific and medical expert Daniel Skovronsky in STATReports, it’s imperative that Congress correct that unjustifiable 9-13 distinction:

[T]o researchers like me, a provision in the recently enacted Inflation Reduction Act is puzzling.  For no clear reason, it draws a distinction between large and small molecule medicines.  As part of the IRA’s Medicare price control provisions, price negotiation for small molecule medicines is allowed nine years after Food and Drug Administration approval compared with 13 years for large molecule biologics.  There is no scientific reason for this distinction, and it will have a real and detrimental impact on drug discovery and patient care.  Nine years is not enough time to recoup the deep investments into small molecule R&D before government price controls take effect.  As a result, companies will deprioritize small molecule programs, lowering the potential to create drugs using these technologies.  Congress should correct this imbalance by allowing negotiation after a full 13 years for both small-molecule medicines and their large-molecule counterparts.”

There’s simply no sound basis for that 9-13 small-molecule/large-molecule differential, and on 9/13 we urge Congress to correct this error.