How government price controls are holding back small molecule innovation  

The reality of the IRA is that innovators are forced to make tough decisions.

With the Biden administration focus on implementing the Inflation Reduction Act (IRA), developers of small molecule drugs face an uncertain future.  

Small molecule drugs, which play a critical role in treating many diseases, can often be more convenient for patients, and cheaper to develop and manufacture. Medical treatment for heart failure, a condition affecting over 6 million Americans, relies solely on small molecule drugs. With the average heart failure hospitalization lasting four to seven days, one in two patients suffering from breathlessness, and nearly half experiencing difficulty climbing stairs, the burdens of disease weigh heavily upon the patient.  

The IRA’s authors arbitrarily decided that biologics are more innovative, which subjects the drugs to government price controls 13 years after U.S. Food and Drug Administration (FDA) approval, while small molecule drugs face the same sentence at only nine years. As a former reviewer at the FDA, I know that there are multiple levers that the agency can pull to lessen the burden of small molecule drug development. 

First, drug trials can target patient-reported outcomes, or real-world evidence. Patients do not care about lab tests or intermediate biomarkers. Outcomes like hospitalization do matter to patients but require large study populations in order to detect a statistically and clinically meaningful difference. A shift to include patient-reported outcomes in clinical trials as endpoints could reduce costs while focusing on the facets of disease that matter to patients: how they feel. 

For example, while ensuring safety for chronic obstructive pulmonary disease patients, improvements in breathlessness or the distance traveled in a six-minute walk test would tie development to outcomes that matter to patients. In some cases, the FDA is already slowly moving toward this framing, accepting as a secondary outcome a decrease in the nagging itching sensation in eczema patients. 

Patients and life sciences entrepreneurs would also benefit from greater flexibility in assessment of outcomes. Current clinical trial frameworks and operations require patients to travel to study sites for assessment, interview and exam by clinical staff — something recognized by both Congress and the FDA as a barrier to clinical trial participation. While policy change through the recent issuance of agency guidance around decentralized clinical trials was a critical first step, both the FDA and innovators together must operationalize policy in order to make it a reality for patients. 

For patients, this means greater access and convenience to clinical trials. Remote assessment, or even delayed assessment — such as review and scoring of recorded standardized exams for patients with movement disorders like Parkinson’s by a neurologist — could decrease the burden and costs of participating in clinical trials, simultaneously expanding the diversity of patient populations studied facilitates improved assessment of both efficacy and safety. A rare occurrence in drug development, small manufacturers have used this approach before, helping products such as valbenazine, a treatment for the movement disorder tardive dyskinesia, reach the marketplace serving patients who had few other options. 

Finally, flexibility in trial design is a must. A century of drug development has taught us that there are many ways to answer the question “is this drug safe and effective.” From positive and safe creativity in clinical trial design to repurposing a study population after a washout period, innovators have multiple tools to reduce costs and increase the efficiency of drug development. While innovators can legally already take these steps, the FDA must promote the use of these options more frequently. 

The reality of the IRA is that innovators are forced to make tough decisions about their pipelines even sooner, since the government has the ability to select a drug for negotiation at seven years post-market entry with the negotiated rate taking effect after nine years. With the ongoing implementation of the IRA and one-third of Americans suffering from chronic disease, now is the time for FDA reform. 

Brian J. Miller is a nonresident fellow at the American Enterprise Institute and an assistant professor of medicine at Johns Hopkins University.