RE:RE:RE:RE:RE:RE:RE:Inflation Reduction Act (IRA) boosts biological drugs While the first set of drugs subject to price negotiations are not biomarker-informed agents or advanced cell therapies, many of the companies with drugs on the list — Janssen, Bristol Myers Squibb, Novartis, AstraZeneca, and Merck — also happen to be the biggest players in the oncology space.
One year after the Inflation Reduction Act into law, the US Centers for Medicare & Medicaid Services (CMS) began to negotiate drug prices with government payor and drugmakers for the 10 most expensive prescription therapies in the country. After CMS unveiled the first 10 drugs subject to negotiations in August 2023, drugmakers had until Oct. 1, 2023 to commit to either negotiating prices — which would take effect in 2026 — or pull their drugs off the market for Medicare beneficiaries.
All the drugmakers with therapies on CMS's list have begrudgingly agreed to participate in price negotiations. But they're still fighting the law in the courts, suing the US government to block the IRA's price negotiations provision, even though they have lost in 3 Federal Courts thus far. A
s these lawsuits play out, drugmakers claim they're already shuffling their pipelines, deprioritizing early-stage programs, and holding off on acquiring small-molecule orphan drugs that could carry high price tags and end up on future Medicare price negotiation lists. This move opens the path for biological orphan drugs, like ONCY's pelareorep in the treatment first-line pancretic cancer (PDAC), which would receive 13 years of market exclusivity from the date of approval.
A significant aspect of the IRA that drugmakers and the public support is the $2,000 cap on out-of-pocket drug spending for seniors. Drugmakers voiced their support for this component of the law which means the government picks up more of the bill than the patient, not that the pharma companies charge less for therapies. Currently 42% of US patients diagnosed with cancer do not take their medication as prescribed because of their out-of-pocket cost. The IRA is a mechanism to improve health for the whole population without leaving the orphan/rare disease community behind.