President Joe Biden just announced a new effort that he hopes will spur the development of better, more precise cancer surgery technologies. The program is part of his administration's "Cancer Moonshot," which aims to halve cancer death rates in the United States by 2047.
Ironically, one of the biggest obstacles to achieving that goal might be Biden himself — or more specifically, his policies. The prescription drug price controls Biden signed into law as part of last year's Inflation Reduction Act (IRA) have already dealt a blow to one of the greatest engines of medical innovation yet devised — America's market-based biopharmaceutical sector.
Private firms have been making astounding progress battling a wide array of cancers using technologies that, just a few years ago, would have been unimaginable. As of 2020, there were over 1,300 therapies and vaccines in development for cancer.
Medical advances over the last few decades have resulted in a precipitous decline in the rate of death from cancer. Between 1991 and 2020, America's cancer death rate dropped 29%.
The IRA threatens much of that progress. The law established a strict system of price controls on prescription drugs dispensed through Medicare. The federal government will name the first 10 drugs that will be subject to price controls in early September. The price controls will take effect in January 2026. It's a virtual certainty that some will be state-of-the-art cancer therapies.
Small-molecule drugs — those generally made through traditional chemical synthesis — will be subject to price controls nine years after approval. Biologics — which are made using living organisms — can be considered for price controls 13 years after approval.
Investors and drug companies will understandably shift their focus toward biologics, since they'll have four more years of sales at market prices to earn a return on the capital they've deployed and fund new research efforts.
This "small-molecule penalty" has particularly significant implications for cancer patients. Most cancer medicines approved by the Food and Drug Administration are small-molecule drugs. They're pills, so they're easier for patients to take than biologics, which generally must be dispensed in a hospital or doctor's office.
Further, many small-molecule cancer drugs have received approval for additional indications after they hit the market. More than six in ten that were approved between 2006 and 2012 got at least one post-approval indication. Almost 40% of those post-approval indications were for new diseases — generally different forms or subtypes of cancer.
Those post-approval indications are the product of additional research after a drug reaches the market. The IRA's price controls will discourage that additional research.
After all, why would a company spend money investigating whether a drug works on different stages or forms of cancer if the government can set the price of that medicine before it has the chance to complete the research needed to secure approval for those additional indications?
In other words, the small-molecule penalty will stop the kind of incremental research and progress that has allowed some drugs to become effective therapies for multiple forms of cancer.
Many drug firms have already announced that they'll curtail or slow research into cancer treatments because of the IRA.
Novartis said earlier this year that it had curbed development of some early-stage cancer drugs. Genentech said that it may wait on seeking approval for a drug that holds promise for treating ovarian cancer until it's ready to seek approval for an indication for prostate cancer, too.
The nine-year countdown starts as soon as the first approval comes. So companies have to be strategic about when they try to enter the market. That may mean that some patients have to wait longer than they would in the absence of the IRA.
This is all worth remembering the next time Biden claims he's leading the charge toward better treatments for cancer. The future of cancer medicine would look a whole lot brighter if he'd never signed the IRA — and the devastating price controls it contains — into law.
Sally C. Pipes is president, CEO, and the Thomas W. Smith fellow in healthcare policy at the Pacific Research Institute. Her latest book is "False Premise, False Promise: The Disastrous Reality of Medicare for All," (Encounter Books 2020). Follow her on Twitter @sallypipes. Read Sally Pipes' Reports — More Here.
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