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President Biden’s State of the Union Call for IRA Expansion Hurts Patients, Workers, and U.S. Leadership

During his State of the Union address Thursday night, President Biden called for Congress to expand the Inflation Reduction Act to increase the amount of drugs Medicare can “negotiate” to 50 per year. Put another way: The administration wants to double down on a bad idea while the effects of the IRA are still unfolding.

 

This proposal would impose another major setback for all patients in need of new and innovative treatments, for millions of workers who support the biopharmaceutical ecosystem, and for our country’s economy and global competitiveness.

 

The IRA’s policy does not operate as an actual negotiation. It is government-mandated price setting. In the months since the law’s passage, we have seen the evidence that price controls hinder innovation. Since the IRA’s price setting began, some companies have already paused, stopped or redirected investments and research. Those most impacted by this are the patients waiting for that new cure or treatment that will never become a reality. This impact will only worsen if more drugs become subject to the controls.

 

As recent research from Vital Transformation found, expanding the IRA negotiation to 50 drugs would result in 134 fewer FDA approvals over the next 10 years, impacting seniors most acutely. Patients with some of the most devastating illnesses – including cancer, Alzheimer’s, and rare diseases – will endure the unintended consequences most. More than 1 million workers will also face job losses as the industry’s economic footprints and America’s global biopharmaceutical leadership decline.

 

The Biden administration should instead focus on reviewing unintended consequences from the IRA’s implementation. This includes the Ensuring Pathways to Innovative Cures (EPIC) Act, which would extend small molecule drugs’ period of exemption from IRA price controls from nine years to 13 – equal to biologics. This change would help ensure the most common, convenient medicines remain accessible, affordable and a priority for biopharmaceutical companies to develop.

 

President Biden’s call for expansion will instead have a significant chilling effect on the development of life-saving treatments and on the scientists who help deliver these critical medications.

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