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Fix the IRA Before its Unintended Consequences Harm Patients and Workers

Read We Work For Health's letter that was sent to the Biden Administration.

Washington, DC (February 7, 2023) – At We Work For Health, we bring together biopharmaceutical research companies, vaccine manufacturers, their employees and local businesses to improve the health and well-being of patients. We help support policies and initiatives that reinforce the delivery of lifesaving advances in medicine while also promoting the critical importance of high-paying jobs and the impact of the biopharmaceutical sector on national, state and community economies.

As the President prepares to address the nation in the upcoming State of the Union, we urge the Administration to correct the unintended consequences of the Inflation Reduction Act (IRA) and focus on the underlying drivers of high out-of-pocket costs for prescription drugs, including pharmacy benefit managers and insurer practices. Affordability, accessibility and innovation are inextricably linked, and it’s critical to focus on policies that support all three so that patients aren’t negatively impacted.

In the case of the IRA, warnings from venture capitalists, researchers and patient advocates went unheeded, and we’ve begun to see the impacts coming to fruition. As two people who have worked in the biosciences and been patient advocates for decades, we fear that this is just the beginning.

Already we have heard of a major manufacturer that announced it removed a drug to treat blood cancers from early-stage clinical trials, citing the Inflation Reduction Act as the reason. The company said that, in this altered environment created by the new law, the oncology drug no longer met its threshold for continued investment. There is a painful irony here that the IRA is taking a drug out of development that could have helped achieve this goal of the Cancer Moonshot initiative to cut cancer mortality in half.

Another biopharmaceutical company stated publicly it was withdrawing a drug from critical phase III clinical trials that would treat Stargardt disease, a rare genetic eye disorder that causes severe vision loss, sometimes as early as childhood. This company, too, said it was necessary to halt clinical research on the drug while it studied the effects of the IRA. Biotech investors wrote that the company should not resume the trials “if it is going to act in an economically rational way to justify the hundreds of millions of dollars it spends on R&D.”

This erosion in biopharmaceutical research will not only be suffered by patients and their families desperately hoping for new cures and treatments, but also by the nation’s labor force. A powerhouse of American innovation, the biopharmaceutical industry’s impact can be measured by the hundreds of thousands of jobs it directly supports and the millions more supported by vendors who provide services and supplies to the industry. By some estimates, some of the largest biopharmaceutical companies in the U.S. support 4.4 million jobs directly and indirectly and contributed a combined $1.4 trillion in economic output in 2020 alone.

A law that disincentivizes drug development also eliminates jobs and the opportunity for more cures – but that is only part of the story. The reality of fewer treatments in development means that our country will be less prepared to respond to future pandemics and public health crises.

Here’s the good news: Congress still has an opportunity to correct its errors before the law goes fully into effect. With the House and Senate controlled by different political parties, there’s no better way to demonstrate bipartisanship than standing up for common sense fixes that directly lower costs and support innovation.

One immediate action that Congress can take is to preserve incentives for small molecule research as the law allows for with biologic drugs. Under the IRA, biologics have a 13-year period before the government can begin imposing price controls, but small molecule drugs are limited to nine years prior to negotiation. This is going to cause a harmful reduction in innovation investment on the latter, which fulfill critical unmet medical needs, and serve as an opportunity to bridge equity and access gaps to communities in need of therapies that can be taken by mouth (as opposed to through an injection). Let’s reverse this and other troubling trends we’re seeing and take the necessary steps now. There’s no time to wait.

The bottom line: Government decision makers need to dispense with the notion that we have to choose between affordability and patient-centered innovation. It’s possible to achieve both.


Tom Kowalski and Rolf Benirschke, Co-Chairs, We Work For Health


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