Hudson Joins NC Colleagues in Introducing Legislation to Eliminate IRA "Pill Penalty" & Encourage Drug Innovation
WASHINGTON, D.C. – Today, U.S. Representative Richard Hudson (NC-09) joined Representatives Greg Murphy, M.D. (NC-03) and Don Davis (NC-01) in introducing the Ensuring Pathways to Innovative Cures (EPIC) Act. This bipartisan, bicameral legislation fixes the Inflation Reduction Act's small molecule disparity, also known as the "pill penalty," to ensure continued R&D investments into small molecule medicines. Senator Thom Tillis (R-NC) is introducing the companion legislation in the Senate.
"By creating incentives to develop new drugs, we can help ensure greater access to life-saving cures for patients," said Representative Hudson.
"Small molecule drugs, basically pill-form medication, play an essential role in treating Americans battling cancer, neurological disorders, and other severe illnesses," said Representative Murphy, M.D. "Unfortunately, the Inflation Reduction Act's price-fixing scheme destroys research and development, reducing treatment options for patients. American innovation leads the world in breakthroughs and life-saving advancements towards eradicating disease and cancer. Proposals like the "pill penalty" undermine progress, make it harder to lower drug costs, and reduce access to critical therapies for those most in need."
"We must encourage innovation, investment, and the development of new medicines to treat unmet medical needs, especially in underserved and rural communities," said Representative Davis. "With diseases such as diabetes, Alzheimer’s, and cancer often having a disproportionate impact on vulnerable patients, access to high-quality, innovative healthcare treatments must remain a high priority."
Background
Under the Inflation Reduction Act's price-fixing model, small molecule drugs are eligible for selection to the “Medicare Drug Price Negotiation” program 7 years after FDA approval, followed by a two-year “negotiation period” and the price control then goes into effect at year 9.
Biologics are eligible for selection following 11 years after FDA approval, followed by a two-year “negotiation period” and the price control then goes into effect at year 13.
The cost to bring a new drug to market can range from several hundred million to several billion dollars. By reducing the ability to recoup losses incurred during drug research and development, many pharmaceutical companies have stopped pursuing new cures. R&D investments are already shifting away from small molecule medicines and manufacturers have paused clinical trials, harming patients with cancer and rare diseases.
According to a University of Chicago policy brief, due to the 9-13 disparity, 188 fewer small molecule medicines will come to market, leading to 116 million life-years lost.
Small molecule funding has dropped by 70% since September 2021 when the IRA was introduced.
Read the full text of the EPIC Act here.
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