Brian Miller, MD, nonresident fellow, American Enterprise Institute, left, and President Joe Biden, right | AEI.org / WhiteHouse.gov
Brian Miller, MD, nonresident fellow, American Enterprise Institute, left, and President Joe Biden, right | AEI.org / WhiteHouse.gov
An American Enterprise Institute (AEI) health care policy analyst said that a drug price provision in the “Inflation Reduction Act” (IRA) could lead to job losses in states, like New Jersey, in which biopharma companies are developing small molecule drugs.
There are currently up to 59 New Jersey biopharma companies involved in that type of drug development, reported Garden State Times in April.
“The IRA places negative economic pressures on small molecule development programs, as product manufacturers have a narrower window in which to recoup costs,” said Brian Miller, MD, a non-resident fellow at AEI. “For some companies with development programs at the margin, this could mean shrinking or closing programs, resulting in job losses in some states.”
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.
“This is functionally the government sending a very strong negative market signal to pharmaceutical companies, telling them to deprioritize small molecule drug development in favor of biologic products,” said Miller. “That's not a good thing for patients.”
Miller said that small molecules make up the majority of drugs on the World Health Organization’s “Essential Medicines” list.
“Domestically, many chronic diseases affecting millions of Americans are treated primarily with small molecule drugs,” he said.
Miller said that the treatment of biologics and small molecules under the IRA should be equalized, and that such a “fix” to the law would have to be enacted by Congress.
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 incentivize innovation in small-molecule research.
Enacting such a bill in an election year, said Miller, is very unlikely.
Miller’s policy work focuses on Medicare payments, Food and Drug Administration regulatory policy, health care competition policy, veterans’ health, and public health policy.
He also practices at Johns Hopkins Hospital and is an assistant professor of medicine and business (courtesy) at Johns Hopkins University. He is currently a commissioner of the Medicare Payment Advisory Commission.
Established in 1938, AEI is a public policy think tank based in Washington, D.C. that conducts research on government, politics, economics, and social welfare. The organization publishes reports, organizes conferences, and provides expertise through testimony and media appearances. It operates as a nonpartisan institution and receives funding from individuals, foundations, and corporations.
How many New Jersey biopharma companies are involved in “small molecule” drug development?
Source: Biopharmguy.com
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