Joe Biden’s “Inflation Reduction Act” continues to do more harm than good — from its government-dictated price controls to raiding Medicare for green energy subsidies to crushing innovation in developing new cures for cancer and other diseases.
The falsely named IRA included anti-competitive provisions that make it harder for patients to get the medicines they need. The IRA gives small molecule drugs, like oral medications, nine years of protection from price controls, while biologics get 13 years. This disparity is called the “pill penalty.”
As Jim Glassman wrote in The Hill last year, “For no good reason, the act discriminates against a class of drugs that are easier to take, don’t require trips to the doctor or hospital, and provide benefits to disadvantaged patients. You’re certainly familiar with this kind of drug. It’s called a pill.”
The anti-competitive effect of the IRA hit home when I recently spoke at a Rare Disease Symposium in Boston. The day was filled with a range of speakers — including parents of children and young adults suffering from debilitating and tragic conditions.
The moment where it all came together was when innovators discussed the pill penalty.
There was a critical discussion afterward between venture partners, investors, patient representatives and emerging companies about how the pill penalty makes an already challenging marketplace worse for Americans suffering from rare diseases.
In addition, while the IRA architects were building their anti-innovation government drug pricing plan, they also included a provision to stifle the innovation of cutting-edge orphan drugs by requiring these drugs to be used only for a single rare disease.
The consequence of this is to disincentivize orphan drug development for rare cancers and other diseases. Ninety-five percent of rare diseases do not have an FDA-approved treatment — yet the IRA disincentivizes post-approval research and development and offers zero incentive for researchers to seek additional indications for new and promising treatments.
How can Congress and the White House fix these problems in the IRA?
First, the Ensuring Pathways to Innovative Cures (EPIC) Act has been proposed to provide parity for the two drug classes, extending small molecules’ negotiation protection period to the 13 years enjoyed by biologics. As House Energy and Commerce Committee Chairman Brett Guthrie said, “We are at the cusp of a revolution in healthcare, thanks to the innovation happening right here in the U.S. . . Congress should be incentivizing investments and developing cutting-edge therapies, not penalizing innovators for helping to drive real change in our healthcare system.”
Congress can end Biden’s pill penalty by including the EPIC Act in its coming reconciliation package. Congress should also pass The Orphan Cures Act, which would fix the misguided interpretation that only orphan drugs with a single approved indication are exempt from government price controls.
The time for Congress to fix our healthcare system is now.
Jack Kalavritinos is the executive director of the Coalition Against Socialized Medicine/InsideSources