The Legislative Landscape
The 2022 Inflation Reduction Act brought sweeping reforms to drug pricing regulations. Many in the pharmaceutical industry balked at those changes, arguing they could further complicate the drug-making process.
Now that Republicans are in full control of Washington, the GOP is working to roll back some of the IRA provisions and undo regulations that critics say stifle new medical innovations.
The EPIC Act: Chief among these legislative efforts is the Ensuring Pathways to Innovative Cures (EPIC) Act. That bill would undo a portion of the IRA that created a distinction between small molecule drugs and biologics in government price negotiations.
Under the IRA, certain small molecule drugs, such as pills, are subject to price negotiations nine years after approval as part of the law’s Medicare Drug Price Negotiation program.
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The Biden administration hailed the program as a way for the government to lower the costs of “high-expenditure, single-source drugs” and to save money for Medicare users.
Unlike the small molecule drugs, biologics, such as intravenous drugs, are subject to negotiations after 13 years.
Opponents of the IRA provision say that discrepancy has led to a decline in investments from the pharmaceutical industry and discouraged funding for small molecule drugs. With a shorter runway for the small molecule drugs before price negotiations kick in, investors may be less likely to get involved.
The EPIC Act would make both small and larger molecule drugs eligible for price controls after 13 years.
“The IRA has put pills at a disadvantage over biologics, and what we’re basically asking is for parity,” said Rep. Greg Murphy (R-N.C.), the main sponsor of the House version of the bill.
Murphy added that because of that discrepancy, nearly 180 drugs or studies have been taken offline.
We must support innovation and investment in developing new medicines, particularly for those facing unmet medical needs in underserved and rural communities.
Rep. Don Davis (D-N.C.)
The House version currently has 42 cosponsors including one Democrat, Rep. Don Davis (D-N.C.).
“We must support innovation and investment in developing new medicines, particularly for those facing unmet medical needs in underserved and rural communities,” Davis said.
North Carolina Republican Sens. Thom Tillis and Ted Budd are leading the charge in the Senate with several other GOP cosponsors. No Senate Democrats have so far signed on to the Senate version as the party largely sticks by the IRA.
In January, Sen. Catherine Cortez Masto (D-Nev.) led Senate Finance Committee Democrats in demanding that the Trump administration continue the Medicare price negotiations.
The EPIC Act’s prospects, however, are unclear as it didn’t make it into the House Republican reconciliation package. Murphy isn’t giving up hope, though.
“I think it’s unfortunate it got pulled out at the last minute in committee. Everybody was supportive of it,” Murphy said.
He’s still pinning his hopes on the Senate amending the reconciliation bill to include measure.
“If not, we’ll run it separately,” he added.
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How can one legislative fix catalyze medical innovation? The bipartisan Ensuring Pathways to Innovative Cures (EPIC) Act aims to eliminate the “pill penalty,” aligning small molecule drug policies with those of biologics. This change would restore incentives for developing vital treatments and ensure continued progress in patient care.
In the meantime, the Trump administration’s April 15 executive order directed the Department of Health and Human Services to work with Congress to fix what Republicans and critics call the “pill penalty.”
Other legislative efforts: Drugmakers are also watching another measure, the ORPHAN Cures Act.
Sponsored by Rep. John Joyce (R-Pa.), the bill would lift IRA regulations related to Medicare price negotiations for medicines that treat rare diseases.
Drugs that receive FDA approval to treat two or more rare diseases currently don’t qualify for an exemption from the Medicare negotiation program. That incentive only applies to drugs cleared to treat one rare disease.
From the administration: President Donald Trump issued an executive order on May 12 that directed Health and Human Services Secretary Robert F. Kennedy Jr. to negotiate directly with drug companies to lower prices of certain prescription drugs. If companies can’t reach an agreement, the government would take additional “aggressive action” to set the prices at a lower rate on par with other countries.
Trump’s executive order immediately drew opposition from the pharmaceutical industry, with PhRMA saying the policy would lead to “less treatments and cures.”
The move didn’t go down well with top Hill Republicans either. Senate Majority Whip John Barrasso raised issues with how the pricing executive order would affect the business models of drug companies.
“You want the drug companies to be able to do the kind of cutting-edge technology that has brought us dramatically ahead of the game,” Barrasso said. “That takes research and it takes money.”
Senate Majority Leader John Thune acknowledged that order would be “fairly controversial” if done legislatively.
The White House announced a less contentious executive order on May 5 aimed at boosting domestic manufacturing of prescription drugs.
In the House, Rep. Vern Buchanan (R-Fla.) introduced legislation this year to study the challenges that prevent the manufacture of more prescription drugs in the U.S.
Buchanan’s bill hasn’t gained much traction yet as Congress remains bogged down by other priorities.
— Max Cohen
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How can one idea protect millions of lives?
The U.S. patent system drives life sciences innovation, giving researchers the time and certainty to develop new treatments.
Policy proposals that chip away at IP rights jeopardize the very ecosystem that makes medical breakthroughs possible.
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