Why the Biden Pill Penalty has been a disaster for Americans

THE LOWDOWN:

• A misguided policy enacted by former President Joe Biden has led to a 70 percent decline in investment in small-molecule drugs in the United States, raising concerns about the future of American innovation, patient access to medicines, and U.S. competitiveness.

• The Biden Pill Penalty is already having a devastating impact. A recent study revealed that funding for biologics is now 10 times greater than for small-molecule drugs.

• While U.S. pharmaceutical companies have been forced to reduce their investment in small-molecule drugs due to the Biden Pill Penalty, China is surging forward. Since 2021, the number of innovative drugs from Chinese companies has nearly doubled, rising from 2,251 to 4,391, and 76 percent of all new drugs in China are small molecule drugs — the very category the Biden Pill Penalty is discouraging in the U.S.

• In response, Republican leaders in the House and Senate are working to eliminate the Biden Pill Penalty. U.S. Senator Thom Tillis (R., N.C.) and Rep. Greg Murphy, M.D. (R., N.C.) have introduced legislation that would extend the same protections to small molecule drugs that biologics receive.

A misguided policy enacted by former President Joe Biden has led to a 70 percent decline in investment in small-molecule drugs in the United States, raising concerns about the future of American innovation, patient access to medicines, and U.S. competitiveness.

The sharp decline in investments since 2021 has been fueled by a provision in the so-called Inflation Reduction Act (IRA), widely known as the "Biden Pill Penalty." The policy subjects small–molecule drugs — typically pills, tablets, and capsules — to government price-setting four years earlier than biologics, typically, injectables and drugs administered intravenously (IV). The inevitable result has been fewer cures at higher costs.

"The Biden IRA has been a nightmare for American patients and is causing sky-rocketing out-of-pocket costs on Pill Penalty prescriptions," Joel White, president of the Council for Affordable Health Coverage, told the Washington Reporter.

"Joe Biden and Democrats in Congress have forced the drug companies to move away from developing the kinds of drugs patients prefer — because they're easier to take, more affordable, and more widely available — and these companies are now being pushed toward developing more injectables and IV treatments instead,” White continued.

“These more expensive products are delivered in more expensive settings, raising costs for taxpayers and patients," he added.

The Biden Pill Penalty is already having a devastating impact. A recent study revealed that funding for biologics is now 10 times greater than for small-molecule drugs. This is a dramatic reversal of historical trends.

According to projections by researchers at the University of Chicago, the shift could result in the loss of 79 new drugs and 116 million years of life expectancy over the next two decades. For millions of Americans with chronic conditions such as cancer, diabetes, and heart disease, the consequences could be even more devastating.

"Small molecule drugs are the foundation of modern medicine," Sally Pipes, president and CEO of the Pacific Research Institute told the Reporter. "They allow patients to manage their conditions from home instead of having to visit a hospital for an IV infusion or injection.”

“When you penalize investment in these drugs, you don't just limit treatment options. You drive up costs throughout the entire U.S. healthcare system,” Pipes continued. “While a full repeal of drug price controls would be ideal, at the very least, we should ensure equal protection for both small-molecule and biologic drugs."

The shift in investment priorities could also have far-reaching economic implications. American workers who can no longer manage their conditions with convenient at-home treatments may be forced to take more sick days, retire early, or rely on costly hospital visits.

“If workers lose access to the medicines that help them stay healthy and on the job, we're looking at a much bigger economic impact than people realize,” Andrew Langer, the Director of the Coalition Against Socialized Medicine/CPAC told the Reporter. “This isn't just a healthcare issue. It's about protecting the livelihood and competitive advantage of the American workforce.”

While U.S. pharmaceutical companies have been forced to reduce their investment in small-molecule drugs due to the Biden Pill Penalty, China is surging forward. Since 2021, the number of innovative drugs from Chinese companies has nearly doubled, rising from 2,251 to 4,391, and 76 percent of all new drugs in China are small molecule drugs — the very category the Biden Pill Penalty is discouraging in the U.S.

"China is aggressively investing in small molecule innovation while the U.S. is pulling back," added Langer. "If this trend continues, and the Biden Pill Penalty isn't repealed this year, we could soon see China overtake the U.S. as the global leader in pharmaceutical drug development."

"At an absolute minimum, Congress should repeal the Biden Pill Penalty," Langer said. "If they don't, we're going to wake up five or ten years from now and wonder why China is winning the race for medical innovation."

Critics of the Biden Pill Penalty believe the long-term consequences make it an urgent priority for Republicans. A recent survey of voters over 55 found that 88 percent worry about the pill penalty's impact on medical research and patient access to new treatments, while 80% support legislative action to eliminate it.

In response, Republican leaders in the House and Senate are working to eliminate the Biden Pill Penalty. U.S. Senator Thom Tillis (R., N.C.) and Rep. Greg Murphy, M.D. (R., N.C.) have introduced legislation that would extend the same protections to small molecule drugs that biologics receive.

"American innovation leads the world in breakthroughs and life-saving advancements toward eradicating disease and cancer. Proposals like the 'pill penalty' undermine progress, make it harder to lower drug costs, and reduce access to critical therapies for those most in need," Murphy said in a recent statement.

Tillis raised similar concerns, "For patients battling cancer, rare diseases, and chronic conditions, timely access to innovative treatments can mean the difference between life and death."

For now, the battle over the Biden Pill Penalty is playing out in Congress, with potential repeal efforts expected in the coming months. Congressional Republicans' decision on eliminating the Biden Pill Penalty in the upcoming reconciliation package could determine whether the U.S. remains the global leader in healthcare and whether Americans will have access to the most convenient and affordable life-saving treatments and cures.