How Will Industry Work With Congress To Make The Inflation Reduction Act (IRA) Workable?

FROM HEPATITIS C TO CYSTIC FIBROSIS TO SICKLE-CELL DISEASE AND CANCER, some of the most game-changing medicines in recent years have been small molecule, oral therapies. IRA provisions that arbitrarily favor certain medications based on development technology do a great disservice to patients. It makes no scientific or financial sense to create disparities based on whether medications come in pill or injectable form. Modality-agnostic drug development empowers innovators to develop the most effective therapeutics given the current state of medical science. Offering biologic drugs 13 years of protection from IRA price setting is close enough to the 14-year average investors have long counted on, but giving oral tablets just nine years harms patient-centric innovation. Branded medicines make less than 50% of their profits in the first nine years, meaning the IRA effectively clips profits by more than half for smallmolecule drugs. Our entire industry must work collaboratively to prevent the disappearance of small molecules from pipelines by protecting them equally for 13 years. If it is necessary to keep such a correction budget neutral, that can be accomplished, for example, by slightly adjusting the subsequent discount from 35% to 42%. As an industry, we need to provide solutions versus just saying we are “against” something.

PAUL HASTINGS is president and CEO of Nkarta Therapeutics and chair of the board of directors at BIO.