Latest / Making Medicine / Ending the Pill Penalty on 9/13, Tariffs & FDA Rare Disease Guidance | Making Medicine

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Ending the Pill Penalty on 9/13, Tariffs & FDA Rare Disease Guidance | Making Medicine · Making Medicine

• 0:05
  Speaker 1: Hello everyone, and welcome back to the Making Medicine podcast,
• 0:09
  Speaker 1: where science, policy and innovation meet. As always, I'm your
• 0:13
  Speaker 1: host John Stanford. Today we'll reflect on our own holiday
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  Speaker 1: here at Incubate September thirteenth, coming up this weekend or
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  Speaker 1: nine to thirteen, and dedicate some time on the pill
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  Speaker 1: penalty and all of our work to end this unintended
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  Speaker 1: consequence of the IRA. Then we'll get into this week's headlines.
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  Speaker 1: With that, let's get into the show. This Saturday is
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  Speaker 1: September thirteenth or nine thirteen, a special day around Incubate
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  Speaker 1: where we call attention to the ongoing pill penalty that
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  Speaker 1: was part of the Inflation Reduction Act. As many of
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  Speaker 1: you know, this pill penalty or small molecule penalty is
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  Speaker 1: how we refer to the fact that now small molecule
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  Speaker 1: medicines only have nine years of protection before price controls,
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  Speaker 1: whereas biologics have thirteen years. This four year disparity is
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  Speaker 1: significant deterrent to small molecule investment. As we've gotten into
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  Speaker 1: so many times and have resources on our websites and
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  Speaker 1: have shared with policymakers, almost fifty percent of a drugs
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  Speaker 1: revenues might come after year nine, and so we like
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  Speaker 1: to celebrate on nine to thirteen all the attention and
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  Speaker 1: effort that has gone into passing the epic Act, which
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  Speaker 1: would end the pill penalty by giving both small molecule
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  Speaker 1: medicines and biologics the same thirteen years, investors and entrepreneurs
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  Speaker 1: could get back to doing what they do best, following
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  Speaker 1: science to bring about new medicines. Incubate has been sounding
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  Speaker 1: the alarm on the pill penalty and has been working
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  Speaker 1: hand in glove with members on both sides of the
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  Speaker 1: isle in Washington to end the pill penalty through passage
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  Speaker 1: of the epic Act. Earlier this year, we launched a
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  Speaker 1: national ad campaign that called attention to the epic Act.
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  Speaker 1: We had hoped that we could include it in the
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  Speaker 1: One Big Beautiful Bill, but we'll need to keep fighting
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  Speaker 1: in order to see it included in an end of
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  Speaker 1: year health pack. Another way Incubate called attention to this
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  Speaker 1: disparity was our Small Molecules, Big Voices campaign that keeps
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  Speaker 1: going and I hope you'll check that out as well
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  Speaker 1: as our Incubate shorts filmed at various conferences where we've
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  Speaker 1: talked with patients, biotech leaders, vcs, and policymakers all saying
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  Speaker 1: the same thing, The pill penalty has to go. That's
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  Speaker 1: available on Incubate's YouTube page, and they're real stories at
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  Speaker 1: what's at stake if small molecules are left behind. But
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  Speaker 1: to change this policy, we're going to have to do
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  Speaker 1: more than tell stories. We're going to have to talk data.
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  Speaker 1: And that's why Incubate launched the Life Science Investment Tracker,
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  Speaker 1: which has been tracking changes in investment patterns since the
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  Speaker 1: IRA was passed. We've seen twenty six drugs discontinued and
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  Speaker 1: more than fifty research programs abandoned, where in their own
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  Speaker 1: documents companies pointed to the IRA and the pill penalty
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  Speaker 1: as being one of the causes for why they didn't
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  Speaker 1: move forward with a promising drug. It's critical that this
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  Speaker 1: be the last nine thirteen where talking about the pill penalty.
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  Speaker 1: Another week, another mention of tariffs. President Trump announced that
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  Speaker 1: some pharmaceutical products might be exempted. That's a zero percent
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  Speaker 1: tariff if they fall into what's called now Annex three.
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  Speaker 1: That's about where our clarity ends, so we won't get
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  Speaker 1: too deep into the details. But there's some debate whether
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  Speaker 1: or not this will simply apply to generics all generics,
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  Speaker 1: some generics were not sure, or even possibly branded medicines
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  Speaker 1: for whom patents have expired. Again, we won't spend too
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  Speaker 1: long here because there just isn't any certainty about what
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  Speaker 1: this is going to apply to. But the idea of
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  Speaker 1: exempting some pharma products from tariffs seems to continue to
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  Speaker 1: resonate and will probably be a part of a final
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  Speaker 1: policy package. That's particularly relevant as we had news out
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  Speaker 1: of Japan, and we expect other countries where a discussion
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  Speaker 1: about tariff rates and pharmaceuticals will keep following up. Notably,
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  Speaker 1: nothing in the Japan deal suggested that Japan will be
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  Speaker 1: forced to pay more for me medicines made by American manufacturers,
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  Speaker 1: a key part of President Trump's Most Favored Nation strategy
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  Speaker 1: that is making other countries pay more while we pay less.
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  Speaker 1: So it remains to be seen just how serious this
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  Speaker 1: MFN strategy is as part of the Trade Representative's efforts
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  Speaker 1: to negotiate tariffs around the world. Also in the news,
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  Speaker 1: HHS Secretary RFK Junior was in front of the Senate
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  Speaker 1: a contentious hearing debating vaccines, how he's running the agency personnel,
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  Speaker 1: and interestingly, the IRA drug price negotiation program. The Secretary
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  Speaker 1: contended that the price controls put in place by the
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  Speaker 1: Biden administration had actually driven up costs for pharmaceuticals, whereas
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  Speaker 1: Senator Cortes Masto pressed hard, saying that there were savings
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  Speaker 1: of particular note, we can't seem to even get our
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  Speaker 1: own government to agree whether or not this program is
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  Speaker 1: functioning correctly and saving money. We know certainly that through
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  Speaker 1: things like the pill penalty, it's hurting innovation. But the
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  Speaker 1: constant trap of list prices showed up again. The numbers
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  Speaker 1: being pointed to in terms of savings had to do
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  Speaker 1: with comparisons to list prices. So let this be our
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  Speaker 1: one millionth time on the podcast pointing out that list
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  Speaker 1: prices are not the prices being paid through Medicare, Medicaid
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  Speaker 1: or frankly, any drug deal across the country, and so
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  Speaker 1: to point to savings off of list prices is erroneous.
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  Speaker 1: I don't know if RFK Junior's numbers were accurate, but
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  Speaker 1: I certainly know that Senator Cortes Masto pointing to discounts
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  Speaker 1: off of list prices isn't capturing the whole story. On
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  Speaker 1: September third, the FDA announced their rare disease Evidence Principles
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  Speaker 1: or our depth, which will give more clarity to rare
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  Speaker 1: disease companies about eligibility and evidentiary standards as it relates
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  Speaker 1: to moving rare disease products faster through the FDA eligibility criteria.
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  Speaker 1: Out of the FDA noted investigative therapies must directly address
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  Speaker 1: a genetic defect in question, target very small rare populations
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  Speaker 1: generally less than a thousand patients, and apply to patients
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  Speaker 1: with rapid deterioration leading to disability or death, and importantly
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  Speaker 1: have no adequate therapies available. It's important for companies that
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  Speaker 1: are working on rare disease that they have predictability and
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  Speaker 1: speed to get to patients as fast as possible. So
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  Speaker 1: we're pleased to see the FDA announcing clear guidelines about
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  Speaker 1: what it will take to get into this program and
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  Speaker 1: take advantage of it and hopefully make a difference to
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  Speaker 1: patients who are so critically relying on new innovation. With
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  Speaker 1: September thirtieth around the corner and a shutdown looming, it's
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  Speaker 1: important to also remember that action is needed on the
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  Speaker 1: SBIR and STTR programs. It seems like compromise on a
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  Speaker 1: long term plan for the program just might not be reached,
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  Speaker 1: and so we're hopeful that a one year extension is
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  Speaker 1: proposed by the House Small Business Committee might be a
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  Speaker 1: soft landing to ensure certainty for a program that's worked
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  Speaker 1: critically well, not just for biotechs, but for innovative companies
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  Speaker 1: across the US, and that'll give more time for continued
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  Speaker 1: debate about how the program can best serve American companies.
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  Speaker 1: With this episode focusing on nine thirteen and the pill Penalty,
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  Speaker 1: there's a great new article out from the National Pharmaceutical
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  Speaker 1: Council in Health Affairs that interviewed a lot of vcs
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  Speaker 1: about their views on the IRA and how it's impacted investment.
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  Speaker 1: There are a lot of great takeaways in the scholarly piece,
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  Speaker 1: and we encourage people to take a look at it,
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  Speaker 1: but we will crib that seventy seven percent of those
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  Speaker 1: interviewed said the pill penalty was impacting their investments. So
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  Speaker 1: thanks to NPC for adding to the body of evidence
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  Speaker 1: that says what we all seem to know. The pill
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  Speaker 1: penalty is bad, should be ended via the Epic Act,
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  Speaker 1: and we should all get back to making new medicines
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  Speaker 1: that make a difference for patients. That's all for us
• 7:50
  Speaker 1: on this episode of the Making Medicine Podcast. Reminder to
• 7:54
  Speaker 1: subscribe to our YouTube channel so you can stay up
• 7:56
  Speaker 1: to date on the world of policy and innovation. Fallow
• 8:00
  Speaker 1: heow us on LinkedIn, x and Instagram using the links
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  Speaker 1: in the description of this video. We hope you'll celebrate
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  Speaker 1: nine thirteen, think about ending the pill penalty, and as always,
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  Speaker 1: keep innovating.