Image Citation: [12]
Written by John Qiu ‘27
Edited by Matthew Lam ‘27
As the nurse adds Opdualag™ to the IV bag, the patient with melanoma [1] probably isn’t thinking about the years and money spent on developing the drug. Their concern is with their wallets: Americans spend twice as much per person on drugs compared to other wealthy countries, and America’s Big Pharma was largely unregulated by the government until the passing of the Inflation Reduction Act [2].
Historically, the pharmaceutical industry has been very vocal in their distaste for regulations [3, 4]. The IRA attempts to alleviate drug costs rising with inflation and allows for certain drug prices to be directly negotiated after they have been on the market for a certain amount of time [5], faced strong opposition by Big Pharma when it was first introduced in 2022.
From the people’s standpoint, the IRA has done good work so far. Insulin has been capped at $35 for those with Medicare; various drugs have been flagged for prices rising “faster than inflation;” 10 drugs treating a variety of diseases will be negotiated, with prices taking effect in 2026 [6]. Just in 2023, 15 million Americans saved an average of $800 on drugs [7].
To see Big Pharma’s point of view, the lifecycle of a drug must be understood. Whether a drug is chemically synthesized or biologically derived, the process takes more than a decade for the drug to be approved by the FDA. Scientists begin by trying to figure out the inner workings of a disease. Utilizing new technologies and techniques, scientists are able to track the culprits of diseases, and begin to search for drugs that can attack them. Researchers will scour the vast databases of chemicals and test the promising ones. Then, after some drug candidates have been selected, and after three incredibly long, thorough, arduous trials, a drug will be approved for marketing by the FDA [8].
Thus, from a business perspective, when countless potential drugs turn out to be fraudulent sinks of money, trying to find a solution to an obscure disease affecting a small portion of the world suddenly doesn’t seem worth it – at least this is what the Pharmaceutical Researchers and Manufacturers of America believes. They believe that, due to Medicare being able to negotiate prices, continued research and development after a drug is released will not be encouraged. Especially for oncology medicines, which undergo constant revision after they are approved by the FDA for the first time; pharmaceutical companies may make the decision to cut funding for a drug if they don’t believe they can finish revising before the government can get involved. Not only after a drug is made – some member companies of PhRMA are uncertain on how to approach researching new drugs now, even going as far to say certain ongoing projects will most likely be canceled simply due to taking too long. The one who loses in the end are the patients, because there will be less incentive for Big Pharma to find new treatment options [9].
But the fact is, many incredible drugs are not discovered by the industry – in fact, Big Pharma spends only about 10 to 20 percent of their revenue on research and development. Funding from the National Institutes of Health allows for public and nonprofit funding to push for research outside of industry, and drugs will continue to be found even with the IRA [2].
Recent explorations into the immediate effects of the IRA show that biopharma is largely unaffected, but it is too soon to call. Projections indicate that Research and Development cuts will be in store [10].
Who knows what the future will look like for drugs! Maybe pill bottles will disappear, and the new fad will be scary proteins the government calls “biologics” in IV bags. But, as PhRMA advertises, Big Pharma does what it does because they care about their patients. As companies begin to lay off workers to save money [11], we can only hope that they have our best interests at heart.
References
U.S. Food and Drug Administration Approves First LAG-3-Blocking Antibody Combination, OpdualagTM (nivolumab and relatlimab-rmbw), as Treatment for Patients with Unresectable or Metastatic Melanoma [Internet]. [cited 2024 Sep 23]. Available from: https://news.bms.com/news/details/2022/U.S.-Food-and-Drug-Administration-Approves-First-LAG-3-Blocking-Antibody-Combination-Opdualag-nivolumab-and-relatlimab-rmbw-as-Treatment-for-Patients-with-Unresectable-or-Metastatic-Melanoma/default.aspx
Kesselheim AS, Avorn J. Perspective | Letting the government negotiate drug prices won’t hurt innovation. Washington Post [Internet]. 2021 Sep 22 [cited 2024 Sep 23]; Available from: https://www.washingtonpost.com/outlook/2021/09/22/drug-pricing-negotiation-biden-bill/
Wilson MR. POLITICO. 2022 [cited 2024 Sep 23]. Pharma group leader says Dems who vote for reconciliation bill “won’t get a free pass.” Available from: https://www.politico.com/news/2022/08/04/head-of-top-pharma-group-says-dems-who-vote-for-bill-wont-get-a-free-pass-00049898
Post, Share, Post, Print, Email, License. BioPharma Dive. [cited 2024 Sep 23]. Pharma’s strike-from-all-sides attack on the IRA could end up at the Supreme Court. Available from: https://www.biopharmadive.com/news/ira-pharma-drug-pricing-lawsuits-supreme-court/685516/
Robertson L. Medicare Prescription Drug Provisions of Inflation Reduction Act [Internet]. FactCheck.org. 2022 [cited 2024 Sep 23]. Available from: https://www.factcheck.org/2022/08/medicare-prescription-drug-provisions-of-inflation-reduction-act/
AJMC [Internet]. 2023 [cited 2024 Sep 23]. CMS Releases List of 10 Drugs Subject to Price Negotiation Under IRA. Available from: https://www.ajmc.com/view/cms-releases-list-of-10-drugs-subject-to-price-negotiation-under-ira
House TW. The White House. 2023 [cited 2024 Sep 23]. FACT SHEET: Biden-Harris Administration Announces Dozens of Pharma Companies Raised Prices Faster than Inflation, Triggering Medicare Rebates. Available from: https://www.whitehouse.gov/briefing-room/statements-releases/2023/12/14/fact-sheet-biden-harris-administration-announces-dozens-of-pharma-companies-raised-prices-faster-than-inflation-triggering-medicare-rebates/
Lo B, Field MJ, Institute of Medicine (US) Committee on Conflict of Interest in Medical Research E. The Pathway from Idea to Regulatory Approval: Examples for Drug Development. In: Conflict of Interest in Medical Research, Education, and Practice [Internet]. National Academies Press (US); 2009 [cited 2024 Sep 23]. Available from: https://www.ncbi.nlm.nih.gov/books/NBK22930/
Inflation Reduction Act [Internet]. [cited 2024 Sep 23]. Available from: https://phrma.org/Inflation-Reduction-Act
LaMattina J. Forbes. [cited 2024 Sep 23]. The Inflation Reduction Act Is Not Impacting Pharma R&D – Yet. Available from: https://www.forbes.com/sites/johnlamattina/2023/12/12/the-inflation-reduction-act-is-not-impacting-pharma-rd--yet/
BioSpace [Internet]. 2024 [cited 2024 Sep 23]. BMS Will Lay Off 79 in Lawrenceville, NJ, Bringing City’s Employee Cuts to 1,134. Available from: https://www.biospace.com/job-trends/bms-will-lay-off-79-in-lawrenceville-nj-bringing-citys-employee-cuts-to-1-134
PresenterMedia [Internet]. 2010 [cited 2024 Oct 29]. Money Medicine. Available from: https://www.presentermedia.com/powerpoint-clipart/money-medicine-pc-pid-2938
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