Op-ed: Policymakers Need to Choose a New Direction in Cancer Medication Investment

(This op-ed by Mary R. Grealy, Healthcare Leadership Council president, was originally posted in DC Journal)

All of us who have lost a loved one to cancer cheered when President Biden made clear that the Cancer Moonshot project — and its goal of reducing cancer mortality by 50 percent over the next 25 years — would be a major priority for his presidency. More than 50 years after President Richard Nixon declared the nation’s War on Cancer, America is poised to finally win a war that still claims more than 600,000 lives yearly.

That’s why it is so perplexing and painful to see government policy undercutting the goals of the Cancer Moonshot and making its objectives significantly more challenging to achieve. The way the prescription drug price controls in the Inflation Reduction Act that Congress passed last year is structured, investment in the development of breakthrough oncology medications is going to be discouraged at a time in which we need it amplified.

Some of the most game-changing developments in cancer treatment in recent years have come in the form of small-molecule targeted therapies that patients can take orally and have shown great success in disrupting the processes that enable cancerous tumors to spread. And continuing research on these drugs, even after they have reached the marketplace, has led them to be effective in treating other types of cancer that may not have been included in the initial FDA approval.

Under the law up to now, the effective patent life for these small-molecule medicines has been 13 to 14 years. When the IRA is fully implemented, small-molecule drugs can be selected for possible government price setting only seven years after their FDA approval, with actual price ceilings applied at the nine-year mark. In the most recent budget, that number is proposed to be shortened to five years. Inexplicably, the IRA still gives biologic medications a more generous 13-year exemption from price controls.

This change will have a profoundly adverse effect on cancer-focused drug development. (And not just cancer, but small-molecule drugs are critical in a wide range of chronic conditions from diabetes to heart disease and are vital in combating neurological diseases like Alzheimer’s.) The average cost to develop a new drug, which includes dollars spent on products that never gain approval, is between $1 billion and $2 billion. Drug manufacturers and capital investors foot that bill because the system, up to now, has provided them the time window to recoup that investment while still providing an opportunity for generic versions of brand-name drugs to enter the market and generate savings for consumers.

When the Inflation Reduction Act’s drug pricing provisions are fully implemented, at least two developments will likely occur. One, investors will direct their dollars toward the development of biologic drugs that enjoy significantly longer protection from price controls and away from the small-molecule products that are critical to human health but now far less likely to provide a return on investment. And two, drug companies will have to think carefully before engaging in continued research on already-approved drugs to determine whether they can have new uses. Most additional approvals for cancer medications have come seven or more years after their initial green light from the FDA, just as price controls could be imposed.

There is still time to fix the IRA before it has these adverse effects. Congress and the administration need to choose a consistent direction. Either they are energetically behind the promise of the Cancer Moonshot, or they are for slowing the pace of medical innovation. It’s impossible to have it both ways. Millions of us are hoping that they choose to prioritize the war against disease and the quest for longer, healthier lives.