Good News!
I have written many times about the “pill penalty” that is part of the Inflation Reduction Act (IRA). In fact, I’ve written about it at least 8 times. Here is one blog that explains the details of why this policy in the IRA needs to be changed. One of the most egregious parts of this penalty is it reduces the exclusivity period (for small molecule medicines, the pills we are used to taking) to 9 years as opposed to large molecule medicines (biologic drugs that are injected, usually at a doctor’s office) which are allowed an acceptable 13 years of exclusivity.
The whole reason for this exclusivity period is to help the innovator recover the high cost of research and development of a new drug, often approaching $2 billion. I believe the reason this approach was included in the IRA was the government’s desire to encourage investment in biologic drugs. What it ended up doing was having a huge impact on the discovery of new treatments and cures in the small-molecule pills that we are all so used to taking. The effect of that decision has already made itself manifest. The new investment in small-molecule drugs has decreased by 70%. This is terrible news as we all look with hope toward treatments for the diseases that affect our lives as we grow older. I look at this part of the IRA as a situation where our government stepped out of its regulatory and oversight role and inserted itself into the competitive free market aspects of our healthcare, and, as it usually happens, it resulted in a negative outcome.
I realize that you’re thinking I’ve tricked you with the “Good News” heading to this blog since I haven’t said anything that could be in any way construed as good news. I felt that I needed to make sure you understood the depth of this problem before I discussed the good news. Last Tuesday, the President released a series of Executive Orders (EOs) that dealt with a myriad of things, but one of the orders dealt with the pill penalty. Specifically, it said,
“The program [IRA] 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.
The American people deserve better. It is time to restore the progress our Nation made in my first term to deliver lower prescription drug prices by putting Americans first and making America healthy again.”
Now I don’t want anyone to surmise that I approve of EOs when they do things I like - I will always be against the use of EOs. They have become more prevalent over the last decade, being used by both parties to often circumnavigate the checks and balances of the Constitution. Another issue – they can easily be removed by the next President. This EO is a little different in that it directs the Health and Human Services (HHS) Secretary, Robert F. Kennedy Jr., to work with Congress to facilitate correcting the pill penalty. I applaud the President’s decision to recommend the correct use of the constitutional process that requires Congress to correct this problem by amending a standing bill. For the administration to recognize that this ill-conceived penalty on small-molecule medicines needs to be fixed is really good news.
I have to think that you all speaking out had something to do with this good news becoming a reality. When there’s a groundswell of grassroots attention, all facets of our government take notice. Lawmakers listen to their constituents even where they are the incumbent in a “safe” state or district. I think this is true because informed voters, like you, know that even these lawmakers can still lose a primary election. I’ve used that leverage on my state lawmakers, who are all in safe situations. Your influence is magnified when you get involved in the primaries.
Before we strain our shoulders patting ourselves on the back, I need to point out that there is still a lot that needs to happen before this problem is solved. The best possible outcome is the passage of the EPIC Act. I wrote about this proposed legislation in the blog that is linked in the first paragraph. It offers the best solution. It is possible that the language from the EPIC Act could be included in the final budget reconciliation that Speaker Mike Johnson (R-LA) said would be done by Memorial Day; however, meeting that deadline is looking less and less likely. What I don’t want to see is this fix becoming a bargaining chip to obtain concessions and votes. I’ve heard one solution put forth that lowering the exclusivity period for the large molecule medicines to 9 years would even the playing field. All this would do is make a bad situation worse, but weird things happen, so we need to stay vigilant.
I hope lawmakers can find a way to correct this problem. I will work to keep you informed on this important issue and ask that you stay vigilant in telling your lawmakers how important it is to pass the EPIC Act or ensure that there is language included in other legislation that will effectively fix this piece of bad legislation.
Best, Thair