WASHINGTON, D.C. (June 1, 2023) — The price setting provisions in the Inflation Reduction Act (IRA) acutely impact the research and development (R&D) of cancer medicines, a new analysis from the Partnership for Health Analytic Research (PHAR) demonstrates. 

According to the analysis, a significant amount of the progress made in cancer treatment has been the result of the development of small molecule medicines (like pills and tablets) and continued research after a medicine has been approved (known as post-approval R&D) — both of which are discouraged under the law.

“The IRA penalizes medicines that come in pill or tablet form, which are an important part of the cancer treatment arsenal,” said PhRMA President and CEO Stephen J. Ubl. “Because post-approval research occurs several years after initial FDA approval, the IRA’s pill penalty means this research won’t get done and ultimately, patients will lose access to new treatments and cures.”

The new released analysis of small molecule prescription medicines receiving initial U.S. Food and Drug Administration (FDA) approval between January 1, 2006, and December 31, 2012, included several key findings:

• 61% of the small molecule cancer products in this study received at least one post-approval indication and 22% received three or more.
• 41% of post-approval indications in cancer occurred seven or more years after a medicine’s initial FDA approval.
• Nearly 40% of post-approval indications for cancer medicines were for new disease targets, typically a different type or subtype of cancer.
• And nearly 50% of post-approval indications were for a new age group or other expanded population, such as patients with different comorbidities. What’s more, 17% were for earlier intervention in the progression of the cancer.

The majority of cancer medicines approved by the FDA are small molecule medicines, which patients may prefer because they are easier to take than an infusion or a shot. Under the IRA, these medicines can be selected for government price setting just seven years after they’ve first been approved by the FDA, with the price effective two years later. Initiating government price setting so early in their lifecycle ignores the real-life impact these medicines bring to patients and discourages companies from researching and developing them at all.

Additionally, because these medicines can be selected so early in their lifecycle, companies are also discouraged from doing R&D in the years following a medicine’s initial FDA approval. Biopharmaceutical companies often continue to research new indications for medicines after FDA approval to, for example, see if medicines can improve patient care in different stages of a disease or different diseases. This is especially true for cancer. Because the IRA’s price setting provisions begin so soon after a medicine is initially approved, it discourages researchers from following promising scientific leads. It decimates incentives to invest in post-approval research and development if the government can set the price of a medicine long before companies even complete the additional research necessary to obtain approval for additional indications.

Given the nature of cancer research and the expansion of knowledge of it over time, the IRA’s price setting provisions are projected to have an acute impact on the future of fighting cancer and many other diseases. Instead, Congress should make it a priority to fix the pill penalty and preserve innovation in lifesaving treatments and medicines.

To learn more about the impact of the IRA, visit here.