ICYMI: More evidence of the IRA’s harmful consequences on post-approval research and development

A new study published in The Journal of Medical Economics adds to a growing body of research demonstrating harmful consequences that stem from the price-setting provisions in the Inflation Reduction Act (IRA). The new research analyzed 65 medicines originally approved by the U.S. Food and Drug Administration (FDA) from 1995 through 2021 for cardiovascular or antithrombotic indications and sheds light on the law’s impact on small molecule medicines and their research and development (R&D) after initial FDA approval.

The study found significant amounts of critical R&D occurred at least seven years after initial approval:

• Approximately half (49%) of all approved indications and three-quarters of industry-funded clinical trials for the medicines analyzed are the result of post-approval R&D activity.
  
  
• The vast majority (92%) of the cardiovascular medicines analyzed were small molecule drugs. For these small molecule drugs, nearly half (46%) of additional indications were approved seven or more years after the medicine was initially approved — meaning after a small molecule medicine could’ve been selected for price setting under the IRA.
  
  
• Two-thirds (65%) of post-approval clinical trials for small molecule cardiovascular medicines analyzed ended seven or more years after the medicine was initially approved, meaning after a small molecule medicine could’ve been selected for price setting under the IRA.   

Additionally, the study looked at specific patient populations, demonstrating the disparate impacts of the IRA’s price setting provisions.

• 82% of the pediatric clinical trials for the medicines analyzed were initiated post FDA approval and started, on average, six years after the medicine’s initial FDA approval.
  
  
• For the medicines analyzed, three-quarters (75%) of the clinical trials that included seniors were initiated post FDA approval and started, on average, 7.6 years after the medicine’s original FDA approval.

As we’ve discussed previously, some of the most promising clinical research for medicines happens after a medicine is first FDA approved. That’s when researchers often establish whether other patients — perhaps with different forms of a disease — may benefit from an already-approved treatment. The IRA’s arbitrary pre-determined dates for when government price setting can occur means critical R&D is devalued and put at risk.

The new research highlights what previous studies have noted: there will be less research and development on existing medicines after they are FDA approved with small molecules being particularly impacted. Health economists from Northwestern University note that the “blunt nature” of the law “ignores valuable benefits that come from ongoing research into existing products.” Further analysis by University of Chicago estimates there will be 109 fewer post-approval indications for small molecule medicines as a result of the law over the next 20 years.

New medicines are a proven tool to reduce spending on other costly medical care, particularly for chronic diseases which represent the largest driver of health care spending in the United States. Unfortunately, fewer new medicines to treat and prevent illnesses like cardiovascular disease may also jeopardize our ability to control health care spending in the years ahead.

As policymakers begin to realize the full impact of the IRA, they should look to fix the law to mitigate the harmful effects on the future biopharmaceutical innovation and drug development that patients are desperately hoping for.