Lower Bucks Today

Sally Pipes, president of the Pacific Research Institute (PRI), said the price controls put on drugs, specifically the small molecule drugs, under the  Inflation Reduction Act (IRA) could lead to seniors being unable to afford or access medications they need, as well as lead to the loss of industry jobs across the state. 

“This has an impact on seniors and on their long-term health, if they can't access the latest drugs through Medicare, particularly Medicare Part B, the doctor part and Medicare Part D, the prescription drug part,” Pipes told Lower Bucks Today. “If you're a senior and you're going to come down with cancer, heart, stroke, Alzheimer's, all of these things, you want to be able to access the latest particularly biologics and even other small molecule drugs, in order to allow you to live a longer and healthier life.”

The IRA was signed into law by President Joe Biden (D) on August 16, 2022, after Vice President Kamala Harris (D) broke a 50-50 tie vote on the bill in the U.S. Senate, and the U.S. House passed the bill with no Republican votes.

The drug price control provision under the IRA splits brand-name drugs for which Medicare "negotiates" prices on 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.

The difference between the two categories means investors and researchers will lean towards biologics as they have a longer time period to recoup investments before price negotiations, despite the fact that small molecule drugs are the only medication used to target some specific forms of breast, lung, colon, and other cancers, reported South SFV Today. 

Pipes named two drugs that will be included in the first round of price control, Eliquis and Jardiance, one to prevent blood clots and the other used to treat diabetes. Both are small molecule drugs that could become difficult to attain after 2026. 

Seniors in the state have already reported being impacted by rising costs, according to an analysis of economic data from Keystone Today. Pennsylvania ranks 5th in the nation for the number of citizens age 65 and over, and fifty-two percent of older Americans said they cut back on at least one every day expense during the past year, while 53% said they felt stress about personal finances, according to the University of Michigan National Poll on Healthy Aging.

The poll also found that 16% of older adults said they’ve had trouble paying for health-related costs, or even delayed or avoided getting healthcare, because of rising costs. 

“Ultimately, IRA could lead to higher drug costs because people that aren't going to be able to access the latest drugs,” Pipes said. 

Regarding the drug research industry, especially the biopharmaceutical companies in Pennsylvania, Pipes said price control measures would result in “a tremendous loss in this industry, which would be jobs and people's wages.” She pointed out that when price controls were put into place on pharmaceutical companies in Europe, the companies moved all their research and development over to the U.S. as they couldn’t recoup costs while operating in Europe any longer. 

There is one pharmaceutical company operating in Langhorne, Virtus Pharmaceuticals, who works with specialty pharmaceuticals. 

Founded in 1979, PRI is a San Francisco-based 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.