At MassBio, we are unwavering in our commitment to policies that stimulate innovation, encourage investment in groundbreaking treatments, and ensure that patients have access to life-changing medicines. The Medicare Drug Price Negotiation program introduced by the Inflation Reduction Act (IRA), however, is undermining these goals by introducing arbitrary price-setting policies that have already begun to stifle innovation across several therapeutic areas.
In short, the framework established by the IRA’s Medicare Drug Price Negotiation program introduces significant challenges for the pharmaceutical and biotech industries that put the future of medicine at risk. By setting rigid price controls, the IRA creates a climate of uncertainty, especially for treatments that are still in early stages of development. With the potential for lower returns on investment and reduced financial incentives, the risk of insufficient funding for research increases, ultimately discouraging investment in new drug discovery, particularly for emerging therapies. The incentives for creating next-generation treatments, particularly in emerging fields like gene therapies and personalized medicine, are severely weakened. Given that the pharmaceutical and biotech industries rely heavily on investor funding to support costly R&D efforts, these changes threaten to dampen investor enthusiasm for innovation, particularly in high-risk areas of drug development. The consequences of these policies are especially impactful for small and emerging biotech companies, which depend on a healthy investment climate to bring next-generation therapies to market.
That’s why MassBio is encouraged by the introduction of three crucial legislative proposals in Congress, the EPIC Act, the MINI Act, and the ORPHAN Cures Act, which present critical solutions to these challenges and protect the incentives needed for continued innovation.
- The Ensuring Pathways to Innovative Cures (EPIC) Act (H.R. 1492/S. 832), introduced by Reps. Murphy, Davis, and Hudson, alongside Senators Tillis, Budd, Blackburn, Daines, and Lankford, seeks to align the Medicare price negotiation timelines for small molecule drugs with those for biologics. This reform is essential to address the so-called “pill penalty” under the IRA, ensuring that all drug categories, whether they are small molecules or biologics, have equal opportunities for investment and development before being considered for price negotiations. This legislation restores balance to the Medicare negotiation process, ensuring that smaller therapies don’t face disproportionate regulatory burdens.
- The Modernizing the Incentives for New Innovative Medicines (MINI) Act (H.R. 1672), introduced by Rep. Davis, is particularly timely and critical for the future of personalized medicine. As the biotech industry moves toward genetically targeted therapies, less than a dozen such treatments are currently on the market. Due to the way the IRA’s negotiations are structured, these therapies could be subjected to price controls that don’t reflect their true value or development costs, ultimately discouraging investment in a promising area of medicine. The MINI Act specifically addresses gaps in the IRA that could discourage innovation in genetically targeted therapies and high-risk treatments. It ensures that these emerging therapies receive the necessary incentives to thrive, balancing the goal of making drugs affordable for Medicare beneficiaries with the need to maintain a robust pipeline of new, life-saving treatments. By providing safeguards for rare disease treatments and genetically targeted therapies, the MINI Act helps preserve investment in the most innovative and promising areas of medicine for the most vulnerable patients.
- The Optimizing Research Progress Hope and New (ORPHAN) Cures Act (H.R. 946), introduced by Reps. Davis and Joyce, addresses the challenges faced by the rare disease community. Over 30 million Americans suffer from rare diseases, most of which have no available treatment options. While many orphan drugs are developed to treat multiple rare diseases, the IRA’s price negotiation provisions threaten to disrupt this crucial, iterative innovation. The ORPHAN Cures Act expands the orphan drug exemption to include therapies that target more than one rare disease, reinforcing the incentives for continued investment in rare disease research and development.
Together, the EPIC Act, MINI Act, and ORPHAN Cures Act represent vital steps in preserving the future of medical innovation. They are particularly important for small and emerging biotech companies, which are the primary drivers of next-generation therapies. These bills ensure that the capital necessary to fund high-risk, high-reward research remains available, helping to attract the investment needed to push the boundaries of science and deliver life-saving treatments to patients.
MassBio remains committed to advocating for policies that promote innovation while protecting the financial incentives that are essential for bringing new medicines to market. As the healthcare landscape continues to evolve, we will continue to support legislation on state and federal levels that fosters an environment where both patients and innovators can thrive.