New Research Reinforces Need to Fix IRA, Protect Access to Future Cancer Cures

By Dan Leonard, Executive Director, WWFH

The Inflation Reduction Act (IRA), signed into law in August 2022, contains a healthcare provision that allows the Centers for Medicare and Medicaid Services (CMS) to target drugs with high spending in the Medicare program and set their prices after they have been on the market for a set period of time.

Inexplicably, different types of medicines have different timelines for when price setting occurs. Small molecule medicines, which typically come in pill form, can have their prices set by the government as early as nine years after entering the market, four years earlier than large molecule, biologic medicines under the IRA.

This differential treatment of small molecules, known as the “pill penalty,” has grave unintended consequences for patient access to future innovative medicines, disproportionately affecting specific disease areas like cancer.

There are a few reasons for the pill penalty’s disproportionate impact on cancer treatments. First, small molecule cancer treatments have emerged as a critical part of the treatment arsenal against cancer, due in large part to the ability of these medicines to reach medicine targets inside cells, where cancer originates.

Second, the pill penalty does particular harm to incentives to develop new uses for already approved medicines, and such post-approval uses represent 70% of all approved uses of cancer medicines.

The IRA’s price setting timeline cuts short much of this post-approval research for small molecules, forcing medicine developers to rethink continued investment in already-approved cancer medicines relative to other investments.

Not surprisingly, early evidence is beginning to demonstrate the negative effects of the IRA on post-approval cancer research and its disproportionate harms on small molecule cancer drug development: 

• A just-published peer-reviewed study that examined clinical trial activity over the past 10 years found that the number of monthly starts of post-approval industry-funded clinical trials for small molecule drugs has declined by 47.3% since the IRA became law. This was a far steeper drop than for post-approval trials of other medicines during the same time period, demonstrating tangible effects of the pill penalty on a kind of research we know is particularly important for advancement against cancer.
  

• These same authors will be presenting at this year’s American Society of Clinical Oncology (ASCO) conference, this time with new data specific to cancer. Dr. Jon Campbell, a co-author of that research, says that those cancer-specific findings will support what we learned from the peer-reviewed study – that the downward trend in post-approval industry-funded clinical trial activity since the IRA became law is also seen in cancer, and the effect remains disproportionately felt by small molecule medicines.
  

• Disturbingly, other preliminary findings are showing a striking decline in new research programs in cancer. Health economist Genia Long shared that preliminary results from her forthcoming research show that in 2024, monthly new program starts for small molecules in cancer experienced a 43% decline from the pre-IRA average. New program starts represent the first time a particular medicine or drug candidate begins clinical testing to treat a particular type of cancer (for example, breast cancer or lung cancer).

Combined, these early data paint a troublesome picture for the fate of new small molecule medicine advances in cancer. From the standpoint of post-approval research, where the majority of new uses for cancer treatment originate, the “pill penalty” is jeopardizing future innovations that can fill unmet needs for existing cancer patients, new cancer patients, and cancer patients with earlier stages of disease.

From the standpoint of new clinical programs, the pill penalty is evaporating investment into new breakthroughs with the potential to reach entirely new patient populations and significantly alter the course of disease for cancer patients.

Fixing the IRA to make sure that small molecules are not treated differently than large molecule biologic medicines  will mitigate some of the most harmful impacts to cancer patients brought on by the IRA.