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New Report Demonstrates How the IRA’s “Pill Penalty” is Setting Back the Development of Non-Opioid Pain Medicine

Despite the significant demand for effective non-opioid medications for the treatment of pain, a recent report from the Pioneer Institute demonstrates inconsistency with federal policymakers’ commitment to developing these drugs and encouraging their uptake.


In The Left-Hand Doesn’t Know What the Right-Hand is Doing, researchers describe how, on one hand, Congress has enacted legislation meant to encourage the development of non-opioid pain therapies. On the other hand, however, the drug-pricing provisions of the Inflation Reduction Act create disincentives for manufacturers to develop the small molecule drugs which comprise the vast majority of non-opioid pain medicines under development.


Enacted in 2022, the Non-Opioids Prevent Addiction in the Nation (NOPAIN) Act aims to spur the utilization and development of non-opioid pain relievers by requiring more generous reimbursement from Medicare. The law also lays out a clear strategy for the federal government’s approach to non-opioid pain management by mandating a report to Congress on the limitations and gaps in Medicare coverage for these therapies.


Yet these efforts were being undermined from the start. Just months earlier, the Inflation Reduction Act was signed into law. As a part of the law’s new drug price-setting provisions, small molecule drugs would be eligible for price setting four years earlier than “large molecule” or biologic drugs – making it very likely that manufacturers and investors will pull back from research into these treatments due to a reduced amount of time they have to recoup their investment.


This so-called “pill penalty” is estimated to result as many as 155 fewer new small molecule drugs over the next decade, as well as fewer new indications for existing medicines.


For non-opioid medicines, the effects of the pill penalty could be particularly devastating as small molecule medicines are necessary for crossing the blood brain barrier and treating illnesses that impacting the central nervous such as pain. Unfortunately, pain medication research already has a higher attrition rate than research in other therapies. According to a study cited in the report, pain projects have only a 0.7% probability of gaining FDA approval, compared to 6.5% across all diseases.


With only a small number of opioid-alternative medications in manufacturers’ pipelines, it is unclear if any new therapies will come to market in the near future.


The bipartisan Ensuring Pathways to Innovative Cures (EPIC) Act presents one opportunity to correct course. The bill would fix the “pill penalty” by creating a uniform timeline for when all types of drugs become eligible for price setting.


As the authors note, there is a clear bipartisan consensus on the need for non-opioid pain therapies to combat the overdose crisis. If policymakers are serious about employing a comprehensive and multifaceted approach to addressing the crisis, they must remove barriers that hinder progress in developing new non-opioid pain therapies. Otherwise, the right and left hands of the government will continue to pull in opposite directions.


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