The government’s flawed price setting plan under the Build Back Better Act will significantly upend the biopharmaceutical research and development (R&D) process, risking important advances in patient care that are only discovered through continued research on already approved medicines. The plan gives the government a new authority to set prices for selected medicines in Medicare after a medicine has been approved for a certain number of years, unless there is a generic or biosimilar version of the medicine available on the market at the time of selection. The plan guts existing incentives necessary to support further investment in post-approval R&D, creating uncertainty for advances that help meet unmet patient needs and stopping progress in its tracks.
Medicine development is long, resource-intensive and highly uncertain, and the path to new treatments is rarely straightforward. Fewer than 12% of drug candidates that make it to Phase I clinical trials are eventually approved by the FDA. On average, it takes 10-15 years of research and $2.6 billion to bring a new medicine to market. Despite this arduous journey to market, FDA approval of a medicine is rarely where innovation ends, and continuous learning about approved products is always part of the process.
Post-approval R&D often includes and can lead to:
- New uses or indications. Medicines for one disease can be determined to work for the treatment of a different medical condition. For example, when a rheumatoid arthritis medicine is subsequently approved for psoriatic arthritis, Crohn’s disease or ulcerative colitis.
- New patient populations. Medicines originally approved for adults can be tested for children with the same or other conditions, potentially opening the door to helping a wider group of patients. Post-approval research may also lead to a medicine’s review and possible approval for patients with different stages of disease.
- New formulations. In medicines where the active ingredient is already FDA-approved, a new formulation can be developed for specific populations, e.g., an easier to administer and more palatable formulation for children.
- New dosage forms. New dosage forms can improve patient health by helping to increase patient adherence to therapy, ensure a proper dose is taken or improve quality of life for patients who must take their medicines on an ongoing basis. An example is a medicine formerly taken as an injection can now be administered as a nasal powder or orally, which are logistically often easier for patients.
Post-approval research and development advances often require additional clinical research and can necessitate supplemental or new applications to FDA, which are held to the same rigorous standards as the initial approved application. This is an extremely intensive process, particularly when additional patient participation in clinical trials is required. Post-approval innovation thus involves and a great deal of resources and investment from the biopharmaceutical company and no guarantee of success.
There is significant value for patients in the innovations that result from continued R&D of an already-approved medicine. The United States’ existing intellectual property (IP) system, like patents and statutory exclusivities, promotes competition and is the foundation for encouraging biopharmaceutical companies to take the necessary risks to continue to research and develop new uses, formulations, or dosage forms for already-FDA-approved medicines. Whether reducing side effects, finding new diseases a medicine can treat or developing new ways for patients to take their medicines, IP protections incentivize manufacturers to continue developing their medicines for the benefit of patients, which creates new competition in the marketplace.
Congress’ drug pricing plan would impose aggressive price controls long before many of these critically important post-approval advancements could be realized. The system needs to change to make medicines more affordable for patients. But we cannot support government price setting that decimates America’s competitive ecosystem and threatens lifesaving medicines for patients.
Learn more about a better way.