The Biden-era Inflation Reduction Act (IRA) undermines incentives to produce new innovations in small-molecule drugs and therefore could slow advances to treat diseases and conditions ranging from high blood pressure to Parkinson’s, according to a new ITIF report.

Congress Should Pass the EPIC Act to Fix Incentives for Small-Molecule Drugs; New Report Shows IRA Undermines Pharmaceutical Innovation

Since the Inflation Reduction Act's passage, the number of industry-supported small-molecule cancer treatments entering post-approval trials in the United States has fallen by 45.3 percent.

Fact of the Week: Since the IRA’s Passage, the Number of Small-Molecule Cancer Treatments Entering Post-Approval Trials Has Fallen by 45.3 Percent

Fact of the Week: Since the IRA's Passage, the Number of Small-Molecule Cancer Treatments Entering Post-Approval Trials Has Fallen by 45.3 Percent

ITIF hosted an expert panel discussion on impact drug-price controls have and what effect, if any, mandated drug-price reductions would have on biopharmaceutical innovation and U.S. industry competitiveness.

The Cost of Cures: Drug Price Controls vs. Biopharmaceutical Innovation

The Inflation Reduction Act of 2022 incorporates unnecessary and unwarranted drug price controls that will harm America’s life-sciences innovation industry and deter biomedical innovation.

Reconciliation Bill Detrimental for U.S. Life Sciences Innovation, Says ITIF

The bill fails to recognize three critical realities: 1) that drug prices are, in fact, not a significant driver of raging inflation; 2) that there exist better mechanisms to reform Medicare Part D drug pricing practices; 3) that mandated government price controls do inflict serious harm on nations’ life-sciences innovation systems.

Senate Reconciliation Legislation Fails to Reconcile the Interests of Biomedical Innovation and Drug Price Affordability

The IRA Medicare drug negotiations represent a poorly crafted policy with many direct and unintended consequences for biopharmaceutical innovation. Rather, this short-term win for government drug price-setting advocates will likely lead to long-term harms that patients will feel for decades.

White House Names the First 10 Drugs Up for Medicare Price Negotiations; Misguided Attempt to Control Drug Prices Only Hurts Patients Long-Term

In response to increased public pressure, both Congress and the Trump Administration have recently promoted efforts to reduce the price of prescription drugs in the United States. Several other countries have already imposed measures of their own.

Fact of the Week: Artificial Price Controls Could Lower the Number of new Drugs by 3 to 5 Percent Over the Next Decade

Adopting an international drug reference pricing scheme would limit drug innovation—potentially leading to higher, not lower, health care costs in the future—while at the same time reducing U.S. biopharmaceutical industry competitiveness, meaning fewer jobs and exports.

Comments to the Centers for Medicare & Medicaid Services on an International Pricing Index Model for Medicare Part B Drugs

Debates over high-priced prescription drugs tend to focus on whether the government should attempt to constrict the pharmaceutical industry, whether by reducing patent protections or by mandating lower prices. What these conversations miss, though, is that drug prices could also fall through the expansion of the pharmaceutical industry, rather than its restriction.

To Do: Pass the EPIC Act for Small-Molecule Drugs

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The Inflation Reduction Act Is Negotiating the United States Out of Drug Innovation

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Congress Should Pass the EPIC Act to Fix Incentives for Small-Molecule Drugs; New Report Shows IRA Undermines Pharmaceutical Innovation

Fact of the Week: Since the IRA’s Passage, the Number of Small-Molecule Cancer Treatments Entering Post-Approval Trials Has Fallen by 45.3 Percent

The Cost of Cures: Drug Price Controls vs. Biopharmaceutical Innovation