Commentary: Protecting the drug discovery pipeline | Opinion

On Thursday, August 15, the Biden administration announced the prices of the 10 drugs negotiated by the government to save patients money at the pharmacy counter. The Associated Press (AP) said this came “after months of negotiations” that will see 10 of the more expensive drugs used by Medicare beneficiaries (such as blood thinners, diabetes medications and certain blood cancer drugs) reduced in price. The reductions will range from 38% to 79%, according to the AP, and will take effect in 2026.

These negotiations were a result of the Inflation Reduction Act (IRA) of 2022. While the IRA has done many good things for patients, such as limiting out-of-pocket costs, it will also have a negative impact on drug research – and that is a tragedy for all patients battling deadly and chronic diseases now and in the future. This negative impact on drug research is due to the IRA's impact on new investments, new treatments, and new cures.

In particular, the IRA created a huge incentive not to fund research on small molecule drugs by treating them differently than biologics. Currently, most drugs on the market are small molecule drugs. These are (usually) ones that can be taken orally, as opposed to biologics, which are typically injected or infused in the doctor's office. According to the IRA, small molecule drugs are subject to price negotiations seven years after Food and Drug Administration (FDA) approval, with price controls taking effect in the ninth year. Biologics are subject to price negotiations 11 years after FDA approval, with price controls taking effect in the 13th year. That four-year difference can significantly affect the decisions of drug developers and investors.

Dr. Steven Potts, Chairman of ICAN's Drug Development Council and a well-known drug developer and entrepreneur from Arizona, testified before the House Energy and Commerce Committee on the impact of the IRA on drug development investments. Dr. Potts had conducted a survey of venture capitalists and biotech executives and found that more than half of those surveyed plan to move away from small molecule drugs. The bottom line: Bringing new cures and treatments to market requires extensive research and development. In order to do extensive research and development, funding is required. With so many funding sources moving away from small molecule drugs, their future is very uncertain. (Dr. Potts' testimony can be found here: Herestarting at 31:40).

It's important to remember what's at stake in this issue, for patients and for Arizona. Arizona is a growing state when it comes to investing in biotech. Under the leadership of Joan Koerber-Walker, President of AZBio, we have made great strides and are on the rise in the biotech space. To make this possible, elected officials from both parties in Arizona have created a great environment in which small biotech companies that rely on relatively few products can thrive. We cannot allow this misguided federal policy to stand in the way of this continued growth and development. We must fix the penalization of small molecules.

That is what we need to focus on now. We have been working with our two Senators, Kyrsten Sinema and Mark Kelly, and the Arizona Congressional delegation to educate them on these issues, because we are facing a future where drugs and breakthrough cures never see the light of day for reasons that simply have to do with arbitrary legislation. A bipartisan solution to the small molecule drug penalty has been developed in the House of Representatives, HR 7174, the Ensuring Pathways to Innovative Cures (EPIC) Act, to align the pricing timelines for both small molecule drugs and biologics to 13 years. We hope that all members of the Arizona Congressional delegation will enthusiastically support this solution.

Small molecule drug and biologic research is critical to providing the future cures that patients hope for and expect. Drug development should not be based on an arbitrary temporal distinction between the times at which price negotiations and price controls are implemented for certain drug classes, but rather on what is most likely to be successful in treating and ultimately curing disease.

Sidney M. Rosen, Esq., is the founding chairman of ICAN, International Cancer Advocacy Network – a Phoenix-based 501(c)(3) nonprofit organization that has served over 18,000 Stage IV cancer patients in Arizona, across the United States, and in 72 countries since its founding in 1996. He is also a founding partner of the small international real estate law firm Rosen Ocampo & Fontes, with principal offices in Phoenix, Arizona, and Mexico.