CAHC’s President, Joel White, spoke with the Washington Examiner about the impact the Inflation Reduction Act’s Medicare price negotiations will have on the development of small molecule drugs.
“What the [Inflation Reduction Act] does is it says we’re going to value pills less than biologics because the price controls don’t take effect until … further down the road,” Joel White of the Council for Affordable Health Coverage told the Washington Examiner. “What that’s doing right now in the market is it’s driving investment decisions away from pills [because] we’ve got this incentive to get everything into the biologic space [to get] four more years of price exclusivity.”
Although a variety of essential drugs are currently in short supply, White said that small molecule cancer treatment drugs are particularly scarce, and shortages will likely be made worse under the Inflation Reduction Act’s incentive structure.
New innovative therapies for cancer often rely on small molecule cytotoxic materials as their “backbone” or primary foundation. While much of the shortage for these chemicals, mostly produced outside of the United States, is attributable to the COVID-19 pandemic supply chain disruptions, White and Stanford argue that the Inflation Reduction Act may disincentivize investment in current production of small molecule solutions for cancer that drive these advances.
White told the Washington Examiner that his conversations with lawmakers suggested that the price exclusivity differential between biologics and small molecules was a “fundamental misunderstanding of the market” on the part of politicians crafting the legislation.
Although curative therapies for cancer or other chronic illnesses may ultimately come from biologics, White said, innovation in treatments has been thus far focused on making existing medications into pill form to make administration of the drugs easier and more accessible.
“Everything in the pharma world has been trying to figure out ‘How do we get insulin into a long-acting pill so [diabetics don’t need] the injections? How do we get cancer cures into a pill [to] make it more widely available?'” White said. “The marketplace, obviously, is putting more money in those products that have price controls less,” deemphasizing small molecule innovation.