The Inflation Reduction Act, signed in August 2022, emphasizes subsidies for clean energy projects but also allows the government to impose price controls on certain advanced medicines for Medicare patients. Unfortunately, this act discriminates against easily accessible drugs like pills, impacting disadvantaged patients.
Under this act, the government can set prices for small-molecule drugs, such as pills, nine years after FDA approval, while biological products, typically administered as injections, have a 13-year exemption period. This disparity, known as the “pill penalty,” favors biologics over pills for investment.
This discrepancy has already led to a decline in the development of small-molecule drugs, with potential long-term implications on healthcare. Research indicates that limiting the patent life of small-molecule drugs could result in fewer new medicines and indications being developed over the next 20 years.
PhRMA’s survey shows a shift in focus away from small-molecule medicines by drug manufacturers, indicating a potential decrease in innovation in this area. This shift could especially impact marginalized patients who rely on easy-to-take medications for their healthcare needs.
Concerns have been raised about the impact of the pill penalty on the discovery of new medicines, particularly for diseases affecting marginalized communities. Ending this penalty by equalizing the exemption period for small-molecule drugs and biologics is proposed as a solution through the EPIC Act.
The Biden administration’s implementation of price controls on small-molecule therapies has further exacerbated the situation. To promote innovation in healthcare and address current challenges, ending the pill penalty is crucial.
James K. Glassman, a former under secretary of State and current advisor to Health care companies, emphasizes the importance of addressing this issue.
Looking ahead, Congress has the opportunity to support the development of new therapies by eliminating the pill penalty and fostering innovation in healthcare for the benefit of all Americans.
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