RESOURCES

“The program imposes price controls on small molecule prescription drugs, usually in tablet or capsule form, 4 years earlier than on large molecule biological products. Known as the ‘pill penalty,’ this discrepancy threatens to distort innovation by pushing investment towards expensive biological products, which are often indicated to treat rarer diseases, and away from small molecule prescription drugs, which are generally cheaper and treat larger patient populations.” Lowering Drug Prices by Once Again Putting Americans First (https://www.whitehouse.gov/presidential-actions/2025/04/lowering-drug-prices-by-once-again-putting-americans-first/) April 15, 2025

“The decline of small molecule investments targeting the Medicare-aged population over the last two years in highly innovative, young companies is undeniable and will not reverse without meaningful changes.” New Research Reveals the Devastating Impact of the Inflation Reduction Act’s “Pill Penalty” on Small Molecule Medicines (https://vitaltransformation.com/wp-content/uploads/2025/04/New-Research-Reveals-the-Devastating-Impact-of-IRA-Pill-Penalty_Press-Release_041425_FINAL-updated.pdf) April 14, 2025

“For the law to penalize one type of treatment because it is cheaper to make and easier to dispense is not only the definition of insanity but will lead to less drugs on the market at a higher price.” Rotten to the Core: The Inflation Reduction Act Pill Penalty (https://cahc.net/rotten-to-the-core-the-inflation-reduction-act-pill-penalty/) February 28, 2025

“If you’ve taken a long time to develop that first indication, and you’re a small molecule and you only have nine years, you may find that you won’t get that second indication approved until you only have two or three years left in the market, and that’s not going to be enough to justify that decision.” CEO Panel Talks IRA Impact At Galien Forum (https://www.lifescienceleader.com/doc/ceo-panel-talks-ira-impact-at-galien-forum-0001) November 14, 2024

“I would venture to guess that none of the legislators who advocated for that legislation recognize what the long-term effect will be on oncology research in this country. "I think [the nine-year window for small molecule drugs] is going to prove to be unrealistic. The net result will be exactly what you’d expect: When the returns of an industry go down, the investment in the industry follows. So, we will see a reallocation of capital, certainly away from those parts of our industry which the IRA most directly affects, like small molecule research. “It is unfortunate that there are some interesting, promising small molecules for cancer research that may not see the light of day." BIO 2024: Amgen CEO Robert A Bradway on the impact of policy on the(https://bio.news/bio-convention/bio-2024-amgen-ceo-robert-bradway-policy-innovation-convention-san-diego/?utm_source=costcurve.beehiiv.com&utm_medium=newsletter&utm_campaign=colorado-s-pdab-finds-another-drug-is-unaffordable-per-its-somewhat-inscrutable-standards) innovation ecosystem(https://bio.news/bio-convention/bio-2024-amgen-ceo-robert-bradway-policy-innovation-convention-san-diego/?utm_source=costcurve.beehiiv.com&utm_medium=newsletter&utm_campaign=colorado-s-pdab-finds-another-drug-is-unaffordable-per-its-somewhat-inscrutable-standards) June 5, 2024

“When you think about that [Medicare Part D] redesign impact, it will really spread across our business, most concentrated in immunology and oncology.” AbbVie (ABBV) Q1 2024 Earnings Call Transcript (https://www.fool.com/earnings/call-transcripts/2024/04/26/abbvie-abbv-q1-2024-earnings-call-transcript/) April 26, 2024

“We’ve been really clear that we do think the IRA drug setting provisions are damaging to the healthcare innovative system. It is not something that is going to help reinforce the tremendous investments that we’re making in R&D to develop the next types of treatments and cures.” Johnson & Johnson (JNJ) Q1 2024 Earnings Call Transcript (https://www.fool.com/earnings/call-transcripts/2024/04/16/johnson-johnson-jnj-q1-2024-earnings-call-transcri/) April 16, 2024

“Biologics have that 13-year versus the 9-year [for small molecules] before you enter negotiation or price negotiations, so I think that all of that strengthens the case and that has driven us to be deliberate intentionally not just on our tumor types but on the modalities that you heard about today—the ADCs as well as the bispecifics.” IRA Drive Pfizer's Decision to Focus on Biologics, Not Small Molecules (https://www.biospace.com/article/ira-drives-pfizer-s-decision-to-focus-on-biologics-not-small-molecules/) March 4, 2024

“Our nation’s robust biopharmaceutical industry was created and fostered by deliberate policy choices that prioritized and incentivized investment in medical innovation in exchange for a period of patent and regulatory exclusivity that enables innovators to price at levels required to recoup their investments and reinvest in the future. As reflected in the Constitution, this nation’s founders recognized as a fundamental tenet, and a cornerstone of a free and capitalistic economy, that the award of exclusivity promotes progress. We can only make the significant research and development investments we do because U.S. policy has respected manufacturers’ patent rights and afforded periods of market exclusivity for innovations." Statement of Joaquin Duato Chairm an and Chief Executive Officer(https://www.jnj.com/download/2024-02-08%20statement%20of%20joaquin%20duato.pdf) Johnson & Johnson before the Committee on Health, Education, Labor,(https://www.jnj.com/download/2024-02-08%20statement%20of%20joaquin%20duato.pdf) and Pensions United States Senate(https://www.jnj.com/download/2024-02-08%20statement%20of%20joaquin%20duato.pdf) February 8, 2024

“It would be as if a company came to us and said, ‘Hey, will you fund my preclinical project? Oh, and by the way, when we launch, we will only have nine years of patent exclusivity left. 'Of course, I know that for years, if we ever looked at a project and knew we would have only nine years on the market before going generic, we would say, ‘Oh, that’s too short. So I already know what my decision is.'” Vital Health Podcast: “IRA’s 9 Years Is Too Short” (https://omny.fm/shows/vital-health-podcast/peter-kolchinsky-iras-9-years-is-too-short) January 17, 2024

“The White House and Democrats will claim that the IRA does not actually violate the promise of Medicare because seniors will still get the care they need despite the diversion of the funds. This is a falsehood, and Americans know it.” Voters Will Reject the Inflation Reduction Act’s Assault on Medicare (https://www.realclearhealth.com/blog/2023/09/29/voters_will_reject_inflation_reduction_acts_assault_on_medicare_983045.html) September 29, 2023

“I surveyed 100 VCs and biotech executives and [asked] two questions: Are you seeing a decline in small molecule funding for the elderly? Are you planning a decline based on this IRA? 85% of them are pulling out of small molecule research for the elderly as a result.” Vital Health Podcast: “Cancer Drug Developer Dr. Steve Potts’(https://omny.fm/shows/vital-health-podcast/cancer-drug-developer-dr-steve-potts-congressional) Congressional Testimony on the IRA”(https://omny.fm/shows/vital-health-podcast/cancer-drug-developer-dr-steve-potts-congressional) September 27, 2023

“Given that the “price negotiation clock” begins to tick when the new drug is first approved for any cancer indication, it would behoove companies to wait until all the studies are complete before launching such an important new medicine in order to maximize the return on its investment. Thus, patients with the rare cancer will be penalized.” The Inflation Reduction Act Will Lead to Fewer New Medicines (https://www.forbes.com/sites/johnlamattina/2023/09/11/the-inflation-reduction-act-will-lead-to-fewer-new-medicines/?sh=477d5020352f) September 11, 2023

“Had the IRA been in place decades ago, it’s likely that far fewer rare-disease medicines would have been developed for fewer diseases or indications.” Commentary: What impact the Inflation Reduction Act can have on Boston biotechs(https://www.bizjournals.com/boston/news/2023/09/01/op-ed-inflation-reduction-act-impact-on-biotech.html) September 1, 2023

“It makes no sense to take a medicine that is already priced based on the value it delivers and demand even greater concessions, especially given that there is no requirement that the insurance companies that administer Medicare benefits will pass any new savings to patients.” The High Cost of Price Controls on Eliquis and Other Drugs(https://www.wsj.com/articles/the-high-cost-of-price-controls-on-eliquis-and-other-drugs-ira-biden-71b45751) August 29, 2023 “I do expect that we will cancel some programs, whether that is, you know, a full-on indication for an existing medicine or a new medicine. We are undergoing a review of our portfolio now.” Bristol Myers Squibb warns US price reforms will dent drug development (https://www.ft.com/content/a763ba0d-e48e-47e4-aba0-a71ee7e18d1f) Nov. 20, 2022

“The U.S. Chamber supports access to affordable medicine, but a government price control scheme is counterproductive and will restrict access to critical medicines, delay treatment for patients, and jeopardize the search for new lifesaving cures. In its rush to implement the IRA’s price control scheme, the Biden administration failed to examine the likely negative side effects of the policy.” U.S. Chamber: Biden Administration Rushes To Implement Drug Price Control Scheme, Failing to Examine the Negative Side Effects for Seniors(https://www.uschamber.com/health-care/u-s-chamber-biden-administration-rushes-to-implement-drug-price-control-scheme-failing-to-examine-the-negative-side-effects-for-seniors) August 28, 2023

“We have decided that we are not going to do certain trials, or that we are not going to do a merger or acquisition or licensing [deal] because it is becoming financially not viable.” Roche: Have Abandoned Some Trials Due to U.S. Drug Pricing Plans(https://www.usnews.com/news/us/articles/2023-07-27/roche-have-abandoned-some-trials-due-to-u-s-drug-pricing-plans#:~:text=Roche%3A%20Have%20Abandoned%20Some%20Trials%20Due%20to%20U.S.%20Drug%20Pricing%20Plans,-By%20Reuters&text=July%2027%2C%202023%2C%20at%202%3A24%20a.m.&text=FRANKFURT%20(Reuters)%20%2DRoche%20said,medicines%20in%20the%20United%20States) July 27, 2023

“These are not the sorts of dilemmas we like to have to make. We’d like to put the patient first. But now we’re trying to figure out how to make a return with a nine-year clock.” Gentech CEO Hardy warns of ‘unintended consequences’ from the Inflation Reduction Act(https://www.fiercepharma.com/pharma/genentech-ceo-alexander-hardy-unintended-consequences-inflation-reduction-act) July 6, 2023 “Although we could bring it [drug targeting tumors] to ovarian patients earlier,” Hardy said, “[Genentech will] wait and seek approval for the prostate cancer indication.” IRA forcing pharmas to leave cancer patients in the lurch, CEOs say (https://www.biocentury.com/article/648171/ira-forcing-pharmas-to-leave-cancer-patients-in-the-lurch-ceos-say) June 2, 2023

“I think in a post-IRA world, it would be very difficult to contemplate that type of study [nine-year EMBARK study] and that type of investment. The risk is you lose that innovation; you lose that benefit." On conference circuit, biotechs lobby for their identity as new IRA drug pricing reforms take hold(https://www.fiercebiotech.com/biotech/biotechs-top-post-ira-priority-make-sure-pharma-keeps-sending-cash) June 28, 2023

“Those decisions [bypassing Medicare] may have dire consequences on the elderly. Companies should not be forced to choose patient winners and losers, an unfortunate consequence of the IRA.” Biopharma Execs Weight Controversial Move: Option Out of Medicare to Escape Drug Price Negotiations(https://www.biospace.com/article/panel-hints-at-changes-to-medicare-participation-under-the-ira/) June 21, 2023 “Now I have to talk to investors and make business decisions that may not be best for all those patients. It would be a shame to bring a drug to market and say. ‘We’re not going to focus on the elderly who can benefit from that because we can’t suffer from the government picking a price for us in some number of years.’ Those are the dynamics playing out in front of us.” Inflation Reduction Act is destabilizing investment in drug innovation, execs say (https://www.healthcarefinancenews.com/news/inflation-reduction-act-destabilizing-investment-drug-innovation-execs-say) June 16, 2023

“So you raise the question of should I even try for government access for new innovation if it’s going to get caught up in potential downstream negotiation.” IRA side effect: Pharma companies will increasingly skip Medicare altogether, Lilly CEO says (https://endpts.com/ira-side-effect-pharma-companies-will-increasingly-skip-medicare-altogether-lilly-ceo-says/) June 14, 2023

“Normally we would go as fast as we can in mesothelioma,” but now the company will wait until other studies in more common types of lung cancer catch up. Keytruda’s benefits, a breast cancer win, the ‘don-zim doublet’: Weekend wrap-up from ASCO(https://www.statnews.com/2023/06/05/asco23-roundup-keytruda-tigit-pharma/?utm_medium=email&_hsmi=261129404&_hsenc=p2ANqtz-8jRD4wWjFTGomsFTI7wS4rRiWXaB79t8SVczRKNlf3g-5xDAvl7AxqhuxngN9uedMRNM3bWHog_g_M2GVk1E3GyEPh_g&utm_content=261129404&utm_source=hs_email) June 5, 2023 The company has cut some early-stage cancer drug programs because “nine years is just too short a time period to fully develop a drug across all of the indications … and make a reasonable return.” Novartis CEO: Some Cancer Drugs Dropped From Pipeline Because of Medicare (https://www.barrons.com/articles/novartis-stock-price-ceo-cancer-drug-medicare-e9b0fcb7?mod=hp_DAY_6) May 19, 2023

“We made these changes to realign our expense base in the face of intensifying pressure on drug prices and high levels of inflation so that we can continue to deliver value for our patients, staff and shareholders.” Amgen cites inflation, pressure on drug prices in 450-person layoff (https://endpts.com/amgen-cites-inflation-pressure-on-drug-prices-in-450-person-layoff/) March 17, 2023

Terns said it did not plan to pursue regulatory approval of TERM-701 for Ph+ acute lymphocytic leukemia (ALL) in the U.S. because of the IRA’s innovation-limiting price controls for orphan drugs approved for more than one indication. Terns Pharmaceuticals to highlight 2023 priorities and clinical milestones at the 41st annual J.P. Morgan Healthcare Conference(https://ir.ternspharma.com/news-releases/news-release-details/terns-pharmaceuticals-highlight-2023-priorities-and-clinical/) January 5, 2023

“In light of the Inflation Reduction Act, this program [BCL2 inhibitor study] no longer met our threshold for continued investment.” Updated: Eli Lilly blames Biden's IRA for cancer drug discontinuation as the new pharma playbook takes shape (https://endpts.com/eli-lilly-rolls-snake-eyes-as-it-axes-two-early-stage-drugs-including-a-40m-cancer-therapy-from-fosun/) November 1, 2022

Alnylam announced it’s reconsidering developing RNA interference therapy for Stargardt disease, a rare genetic eye disease that can cause vision loss, because of the IRA and potential price negotiations. The company wanted to pause the Stargardt disease plans to “consider options for the best path forward.” As Amvuttra makes inroads in ATTR, Alnylam scraps heart disease trial interim analysis, rethinks another rare disease plan(https://www.fiercepharma.com/pharma/amvuttra-makes-inroads-attr-alnylam-scraps-heart-disease-trial-interim-analysis-rethinks) October 27, 2022