May is Mental Health Awareness Month, a national observance since 1949, raising awareness, reducing stigma, and promoting mental wellness. Serious mental illnesses (SMIs), such as bipolar disorder, major depressive disorder, psychosis, and schizophrenia, affect millions of Americans. According to the National Institute of Mental Health, nearly one in five adults is living with a serious mental illness.
These conditions carry a significant cost to individuals and society, with the Schizophrenia & Psychosis Action Alliance (S&PAA) reporting that the direct and indirect costs of schizophrenia alone reached $281.6 billion in 2020. Untreated illness often sends patients to expensive care settings, like the emergency room or hospital. And we all bear these costs as a society, and in our premiums and taxes.
But there is reason for hope. Advances in understanding the mind and illness (science and medicine), and the development of innovative treatments, have shown that people with SMIs can lead full, productive lives. Many hope for a cure through a new medicine or therapy. Removing barriers to life-changing innovation thus remains essential to improving outcomes and strengthening the nation’s health.
People with SMIs will often try many medications before finding one that works for them if they ever do. These medications are decades old, with debilitating side effects. Currently, there are no cures for mental illness; however, with early diagnosis and lifelong effective treatment and care, individuals living with mental illnesses have unlimited potential. Continued research and development of new drugs is critical, but the unintended consequence of the Inflation Reduction Act’s (IRA) Medicare Drug Price Negotiation Program’s pill penalty is creating a roadblock.
The aptly named “Pill Penalty” establishes a much shorter timeframe before price controls take effect for small-molecule (generally pills) medicines compared to the schedule for new biologic medicines. The seemingly arbitrary difference – nine years and 13 years, respectively – creates a massive disincentive for pharmaceutical developers to invest in small-molecule drugs, as the four-year difference accounts for some of the most profitable years for new medications.
Neurological diseases are best treated with small-molecule drugs because these medicines can penetrate the blood-brain barrier, which acts as a filter between the bloodstream and brain tissue, more effectively than large-molecule drugs. But developing a new drug is a costly, intensive process prone to failures and false starts, with just 10 percent making it to market. Knowing this, it comes as no surprise that pharmaceutical companies are shifting investments away from small-molecule to large-molecule drugs. In 2024, ten times more funding was allocated to biologics than to small-molecule drugs. And, since the IRA’s drug provisions were drafted in September 2021, there has been a 70 percent drop in investments in small-molecule drugs, with 78 percent of companies reporting they expect to cancel early-stage research projects. It is projected that there will be a 12 percent overall reduction in research and development investments, resulting in 188 fewer small-molecule drugs over the next 20 years. The IRA pill penalty’s unintended victims are people suffering from SMI, whose chances of finding a life-altering treatment or cure shrink along with the decreasing investment in small-molecule drugs.
Addressing the pill penalty requires changing the law. Congressman Greg Murphy (R-NC), who is sponsoring the Ensuring Pathways to Innovative Cures (EPIC) Act (H.R. 1492), spoke at a briefing for the bill held by the Schizophrenia Policy Action Network (SPAN). He emphasized the importance of protecting research and development of small-molecule medicines by putting them on the same timeline for negotiation as biologics. Doing so eliminates the incentives to put more research funding into biologics and less into pills, which would accelerate innovation in mental health therapies. He also shared his personal experience with a skull tumor, underscoring the importance of innovation in a drug that was crucial to his survival.
Caregivers have also emphasized the urgent need for continued innovation. While the IRA’s intent to lower drug prices seemed promising, caregivers say its unintended impact on treatment development is too great a risk for treating and finding new treatments for serious mental illnesses. Successfully treating – or curing – a serious mental illness would bring much-needed relief to both patients and their caregivers.
During this Mental Health Awareness Month, it is important to remember the historical and ongoing challenges faced by those living with serious mental illness, as well as the many milestones and reasons for hope for future access and outcomes. Passing the EPIC Act to rectify the IRA’s pill penalty is essential to preserving hope, advancing research, and ensuring access to life-changing therapies for millions of Americans living with a mental illness.
To learn more about living with a mental illness and treatments, including more information about the EPIC Act, watch the latest episode of “A Conversation with CAHC.” CAHC’s Joel White interviews Gordon Lavigne, CEO of the Schizophrenia & Psychosis Action Alliance (S&PAA).