Golden State Today

The head of the Pasadena-based Pacific Research Institute (PRI) said that a drug provision in the “Inflation Reduction Act” could lead to a decrease in health care innovation.

“Far from being a big win for Americans' health, the IRA bankrolls billions of dollars' worth of left-wing policy priorities at the expense of life-saving pharmaceutical innovation and seniors' access to new medicines,” PRI President Sally Pipes wrote in a Newsmax op-ed May 20.

“Worse, Biden and Sanders are pushing to expand the IRA's drug-price provisions further,” wrote Pipes. “Doubling down on failure will only compound the damage.”

The IRA, signed into law by President Joe Biden (D) in 2022, contains a drug provision in which the brand-name drugs for which Medicare "negotiates" prices are split into two categories: small-molecule drugs and biologics. 

The IRA makes small-molecule drugs eligible for "negotiation" nine years after their approval, compared to a 13-year exemption period for biologics.

“While both small-molecule drugs and biologics are essential for cancer treatment, small-molecule drugs are the only way to target some forms of breast, lung, colon, and other cancers,” Pipes told South SFV Today in February.

An October 2023 paper, authored by University of Chicago economists, said that the IRA small molecule provision will result in “188 fewer small molecule treatments, including 79 fewer new small molecule drugs and 109 fewer post-approval indications for these drugs.”

There are currently up to 162 California biopharma companies involved in small molecule drug development, reported Golden State Today on April 17.

In April, Biden and U.S. Sen. Bernie Sanders (I-Vt.) held a joint press conference about the IRA and announced plans to expand the ability for Medicare to negotiate drug prices.

Founded in 1979, PRI is a free market think tank focused on the policy areas of education, economics, health care, the environment, and water supply. Pipes has been president and CEO of PRI since 1991.