Signed into law in 2022, the Inflation Reduction Act took important steps to lower out-of-pocket costs in Part D, including setting a $2,000 annual cap on what seniors pay for medicines and spreading seniors’ costs throughout the year to improve predictability. But it didn’t go far enough and has real consequences for the development of and access to medical advances critical to addressing patient unmet needs.
The law put in place policies that mandate government-set prices for medicines covered by Medicare. These polices are expected to have a negative impact on access to medicines covered by Medicare Part B and Part D, in addition to discouraging continued drug development. The process starts seven years after small molecule medicines (e.g., tablets, capsules and pills) are initially approved by the U.S. Food and Drug Administration (FDA) and 11 years after large molecule medicines (biologics that are injected or infused) are initially approved by the FDA. This system ignores the nature of the research and development (R&D) process, discouraging continued R&D after a medicine is FDA approved and deeming some types of medicines as not worth the real-life impact they can have on patients. This process also ignores how therapeutic value increases over time as medicines are approved for new uses, such as in new patient populations, new diseases or new stages of disease.
Biopharmaceutical research companies are having to rethink how and where they invest in medical R&D, with the government essentially picking winners and losers by discouraging the development of some types of medicines and treatments for certain patient populations.
Learn more about how the government price setting process works here and scroll down to learn how it discourages innovation and leaves patients with less access to medicines.
Signed into law in 2022, the Inflation Reduction Act took important steps to lower out-of-pocket costs in Part D, including setting a $2,000 annual cap on what seniors pay for medicines and spreading seniors’ costs throughout the year to improve predictability. But it didn’t go far enough and has real consequences for the development of and access to medical advances critical to addressing patient unmet needs.
The law put in place policies that mandate government-set prices for medicines covered by Medicare. These polices are expected to have a negative impact on access to medicines covered by Medicare Part B and Part D, in addition to discouraging continued drug development. The process starts seven years after small molecule medicines (e.g., tablets, capsules and pills) are initially approved by the U.S. Food and Drug Administration (FDA) and 11 years after large molecule medicines (biologics that are injected or infused) are initially approved by the FDA. This system ignores the nature of the research and development (R&D) process, discouraging continued R&D after a medicine is FDA approved and deeming some types of medicines as not worth the real-life impact they can have on patients. This process also ignores how therapeutic value increases over time as medicines are approved for new uses, such as in new patient populations, new diseases or new stages of disease.
Biopharmaceutical research companies are having to rethink how and where they invest in medical R&D, with the government essentially picking winners and losers by discouraging the development of some types of medicines and treatments for certain patient populations.
Learn more about how the government price setting process works here and scroll down to learn how it discourages innovation and leaves patients with less access to medicines.
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