Price controls came up during a House Energy & Commerce Health Subcommittee hearing yesterday on rare disease, when one exchange highlighted the impact the Inflation Reduction Act (IRA) will have on development in this space.
Why it matters: 95% of rare diseases lack an FDA-approved treatment, but “as enacted, the IRA disincentivizes post-approval research and development and seeking additional indications for promising treatments,” said Rep. Joyce.
The question: “Is a decline in the research and development investment in pediatric research a concern, and what impact will that have long-term on the patients that you treat each and every day?” asked Rep. Joyce.
The answer: “We have the opportunity to intervene, to diagnose children, and to treat them, largely coming from innovation,” said Dr. Alexis A. Thompson, Chief of Hematology at Children’s Hospital of Philadelphia. “The ability to incentivize manufacturers to continue to stay in this space for rare diseases has been extraordinarily helpful. There have been challenges with the continuum to determining what will actually be paid for in terms of insurers. And I do think that needs to be something we need to be very mindful of because it is not entirely clear that the incentives that are there to manufacture the drugs are being paralleled with incentives to actually cover them in the clinical space.”
This tracks: Patients could lose access to at least 40% of new medicines that would have been developed in the next decade, says a recent Vital Transformation study.
The impact on rare disease: Orphan drugs are only exempt from price controls if they’re for a single rare disease. “Our modeling uncovered that a successful cancer drug company will lose a substantial amount of its future earnings as well as pay a large penalty for focusing on orphan indications,” said economist Dr. Harry P. Bowen.
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