Somerset Times

A provision of the “Inflation Reduction Act” (IRA) could threaten investments in "small molecule" drug development, said a visiting professor at Rutgers University.

There are currently up to 12 Somerset County biopharma companies involved in that type of drug development, according to Biopharmguy.com, including 7 in Bridgewater, 2 in Basking Ridge, and 1 each in Bedminster, Raritan, and Warren.

“Merck, Johnson & Johnson, Pfizer, BMS, all of those are small molecule companies that are based in New Jersey that could be impacted,” Shah told Somerset Times. "Biologics are great for dealing with complex diseases, but small molecules will have a greater benefit to the US population in many years to come, because it's easy to produce many generics that will be available.” 

In addition to serving as a visiting professor at Rutgers University, Shah is president of Market Access Solutions, a Raritan, NJ-based consulting firm that works with pharmaceutical and biotech companies. 

The IRA, signed into law by President Joe Biden (D) in 2022, contains a drug provision in which the brand-name drugs for which Medicare "negotiates" prices are split into two categories: small-molecule drugs and biologics. 

The IRA makes small-molecule drugs eligible for "negotiation" nine years after their approval, compared to a 13-year exemption period for biologics.

Shah co-authored a March 29 op-ed in NorthJersey.com that said the IRA "penalizes research" on small molecule drugs and would have "painful consequences for patients."

He said a pending U.S. House bill, the "Ensuring Pathways for Innovative Cures (EPIC) Act" would equalize the exemption period for both biologic and small-molecule drugs. By granting both types of drugs a 13-year exemption, he said the bill would incentive innovation in small-molecule research.

“Make it both same and give the same incentives to both small-molecule factor as well as biologic small molecules,” said Shah. 

Otherwise, he said, the IRA provision amounts to "price controls" that will curtail investment in small molecule drugs. 

An October 2023 paper, authored by University of Chicago economists, said that the IRA small molecule provision will result in “188 fewer small molecule treatments, including 79 fewer new small molecule drugs and 109 fewer post-approval indications for these drugs.”

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How many New Jersey biopharma companies are involved in “small molecule” drug development? 

Source: Biopharmguy.com 

Company	City/Town	Type of Drug Development
Daiichi Sankyo	NJ - Basking Ridge	Small Molecules, Biologics
Regeneron	NJ - Basking Ridge	Small Molecules, Biologics
Jubilant Therapeutics	NJ - Bedminster	Small Molecules
Chugai Pharma	NJ - Berkeley Heights	Small Molecules
CorMedix	NJ - Berkeley Heights	Small Molecules
Cyclacel Pharmaceuticals	NJ - Berkeley Heights	Small Molecules, Biologics
Vyne Therapeutics	NJ - Bridgewater	Small Molecule
Asana BioSciences	NJ - Bridgewater	Small Molecule, Biologics
Amarin	NJ - Bridgewater	Small Molecules
Bausch Health	NJ - Bridgewater	Small Molecules
Lexicon Pharmaceuticals	NJ - Bridgewater	Small Molecules, Biologics
Sanofi	NJ - Bridgewater	Small Molecules, Biologics
Salix Pharmaceuticals	NJ - Bridgewater	Specialty Small Molecules, Gastroenterological
Klus Pharma	NJ - Cranbury	Generics, Biologics Development, Small Molecules
IVIEW Therapeutics	NJ - Cranbury	Small molecule for ophthalmology
Palatin Technologies	NJ - Cranbury	Small Molecules
Cornerstone Pharmaceuticals	NJ - Cranbury	Small Molecules, Delivery
Novartis	NJ - East Hanover	Small Molecules, Vaccines, Biologics
Lavipharm	NJ - East Windsor	Small molecules
Cellectar Biosciences	NJ - Florham Park	Small Molecules
Shionogi	NJ - Florham Park	Small Molecules
Mezzion Pharmaceuticals	NJ - Fort Lee	Small Molecules
Nuvectis Pharma	NJ - Fort Lee	Small Molecules
Linnaeus Therapeutics	NJ - Haddonfield	Small Molecules for Cancer
Celldex Therapeutics	NJ - Hampton	Small Molecules, Biologics, Vaccines
Helsinn	NJ - Iselin	Small Molecules
Mitsubishi Tanabe Pharma	NJ - Jersey City	Small Molecules
Scynexis	NJ - Jersey City	Small Molecules
Almatica Pharma	NJ - Morristown	Small Molecules
Intercept Pharmaceuticals	NJ - Morristown	Small Molecules
AIM ImmunoTech	NJ - New Brunswick	Small Molecules, Biologics
Bristol Myers Squibb	NJ - New Brunswick	Small Molecules, Biologics
Eisai	NJ - Nutley	Small Molecules
NS Pharma	NJ - Paramus	Small Molecule
SK Life Science	NJ - Paramus	Small Molecules for CNS
Teva	NJ - Parisppany	Small Molecules, Biologics
Melinta Therapeutics	NJ - Parsippany	Small Molecule Discovery
Ferring Pharmaceuticals	NJ - Parsippany	Small Molecules, Biologics
SPES Pharmaceuticals	NJ - Plainsboro	505 b(2) Small Molecules
Soligenix	NJ - Princeton	Lipoprotein Delivery, Small Molecules
Taiho Oncology	NJ - Princeton	Oncology small molecules
Medicure	NJ - Princeton	Small Molecule
Beta Pharma	NJ - Princeton	Small Molecules
KBP BioSciences	NJ - Princeton	Small Molecules
Oblato	NJ - Princeton	Small Molecules
Zywie	NJ - Princeton	Small Molecules for Protein Misfolding diseases
Juvenescence	NJ - Princeton	Small Molecules, Biologics
Merck	NJ - Rahway	Small Molecules, Biologics
Merck	NJ - Rahway	Small Molecules, Vaccines, Biologics
Merck	NJ - Rahway	Small Molecules, Vaccines, Biologics
Janssen Pharmaceuticals	NJ - Raritan	Small Molecules, Biologics
BeiGene	NJ - Ridgefield Park	Small Molecules, Monoclonal Antibodies
ReVision Therapeutics	NJ - Ridgewood	Small Molecules
PTC Therapeutics	NJ - South Plainfield	Small Molecules
Janssen Pharmaceuticals	NJ - Titusville	Small Molecules, Biologics
GSK	NJ - Warren	Small Molecules, Vaccines, Biologics
Medimetriks Pharmaceuticals	NJ - West Fairfield	Specialty Pharma - Derm & Podiatry
Issar Pharmaceuticals	NJ - West Orange	Small Molecules
Acquist Therapeutics	NJ - Westfield	Small molecule for chronic inflammatory disorders