Somerset Times

Rep. Thomas H. Kean Jr. (R-NJ) supports an amendment to a provision of the Inflation Reduction Act, which would equalize the exemption period on price negotiation for both biologic and small-molecule drugs, and thereby provide a more level playing field for pharmaceutical innovation.

In January, Reps. Greg Murphy, M.D. (R-NC), Don Davis (D-NC) and Brett Guthrie (R-KY) introduced the Ensuring Pathways to Innovative Cures (EPIC) Act, which would implement a 13-year exemption period for both types of drugs – altering the IRA’s current timetables of a nine year-exemption for small-molecule drugs and a 13-year exemption for biologic drugs.

“Small molecule drugs are critical therapies that Americans with cancer, neurological conditions, and other debilitating diseases rely on every day. The IRA’s price-fixing scheme shifts research and development away from these life-saving medications, ultimately leaving patients with fewer treatment options,” Murphy said in a press release.

Rep. Kean is a fellow cosponsor of the EPIC Act – which, if passed, would be of tremendous import to a state which a “Who’s Who” of major pharmaceutical companies call home, including Merck, Johnson & Johnson and Bristol Myers Squibb.

“It is crucial that we continue to support medical advancements that could potentially save lives for patients with cancer and rare diseases,” Kean told the Somerset Times.

“Small molecule drugs are critical therapies that help tackle cancer and other diseases, upon which Americans rely. I am a proud cosponsor of the Ensuring Pathways to Innovative Cures (EPIC) Act, legislation that addresses the Inflation Reduction Act’s small molecule ‘pill penalty’ to ensure continued investment in R&D for small molecule medicines. As America continues to lead the world in medical innovation, we must remove the red tape hindering the pharmaceutical industry.”

The Biotechnology Innovation Organization’s President and CEO, Rachel King, also offered a statement soon after the bill’s introduction.

“The bipartisan introduction of the Ensuring Pathways to Innovative Cures (EPIC) Act is a critical step toward removing a punitive penalty on the development of small-molecule medicines, a vital class of treatments for patients around the globe. This legislation would fix a section of the Inflation Reduction Act and make certain that we are not disincentivizing the development of small molecule drugs that are often more accessible for patients,” King said.

“We need to ensure that public policy is keeping pace with the groundbreaking medical advances happening in labs across the country. We owe it to patients to make certain that these medical advances are not stifled by short-sighted public policy. BIO strongly supports this important legislation, and we commend Representatives Murphy, Davis and Guthrie for their tireless work on behalf of patients and their continued efforts to make the U.S. a leader in medical innovation.”

Rep. Nicole Malliotakis (R-NY) has voiced concerns on the IRA provision, which, if left unaltered, would impact 24 biopharmaceutical companies in New York City alone, she said.

“The ‘pill penalty’ provision in President Biden’s ‘Inflation Reduction Act’ is forcing manufacturers away from the research and development of critical small-molecule drugs and life-saving treatments that those with cancer and other chronic diseases rely on,” Malliotakis said to the NYC Gazette.

“Treating small-molecule drugs differently from biologics does not make sense and presents a hurdle in our shared goal of providing Americans continued access to high-quality healthcare with as many treatment options as possible.”

Malliotakis has taken a strong stance in the pharmaceuticals sector, including against what she perceives as the unfair practices of pharmacy benefit managers (PBMs), highlighting their detrimental impact on small, independent pharmacies within her district.

An October 2023 paper, authored by University of Chicago economists, said that “price setting under the IRA undermines existing intellectual property laws, reducing incentives for investment in research and development (R&D) that discovers new drugs and identifies new uses and populations who can benefit from already-approved drugs.”

“We conservatively find that the IRA’s policy to set prices at 9 years after market entry for select small molecule drugs will reduce their expected revenues in the U.S. market by 8.0%, which implies a reduction in R&D investment of almost 12.3%, or $232.1 billion over 20 years,” wrote the paper’s authors. “Over the same time frame, we conclude that there will be 188 fewer small molecule treatments, including 79 fewer new small molecule drugs and 109 fewer post-approval indications for these drugs.”

James K. Glassman, formerly a senior fellow at the American Enterprise Institute who served as undersecretary of State in 2008 and 2009, has urged Congress to take the opportunity to rectify this through legislation like the EPIC Act.

In an opinion piece published in The Hill, Glassman said the legislation aims to equalize exemptions for small-molecule drugs and biologics, ultimately improving access to innovative cures and fostering better health outcomes for all Americans.