Last week, the Centers for Medicare & Medicaid Services announced the 10 medications that it would be choosing for its maximum fair price negotiation process with pharmaceutical companies for Part D Medicare coverage, which will take effect in 2026.
Small molecule drugs are typically pills that can be administered by patients at home, such as aspirin, most allergy medications, and antibiotics. These chemical compound medications are relatively easy to produce and have the potential to treat target areas more directly at the cellular level because of their smaller chemical makeup.
"What the [Inflation Reduction Act] does is it says we're going to value pills less than biologics because the price controls don't take effect until ... further down the road," Joel White of the Council for Affordable Health Coverage told the Washington Examiner.
Stanford explained that the emphasis on biologics will negatively affect market resiliency to changes in supply and demand under emergency circumstances, ranging from natural disasters demolishing a manufacturing facility to global health scares. New innovative therapies for cancer often rely on small molecule cytotoxic materials as their"backbone" or primary foundation. While much of the shortage for these chemicals, mostly produced outside of the United States, is attributable to the COVID-19 pandemic supply chain disruptions, White and Stanford argue that the Inflation Reduction Act may disincentivize investment in current production of small molecule solutions for cancer that drive these advances.