Inflation reductions give unintended results for medical innovation.

In 2022, the Biden administration has enacted the inflation method (IRA), a drastic law for reducing healthcare costs. Among the most important rules, Medicare had the ability to negotiate prescription drugs. This is a welcomed movement as a potential game changer to reduce medical expenses. The direct impact of IRA price negotiations is sharply felt by consumers and the medical industry, but the long -term effects of biopharmaceuticals in early pharmaceutical development are increasing.

New studies have the possibility that IRA may bring unintended results in both small molecules and large -paced drugs, suppress the development of new treatments, and reconstruct the types of drugs that are on the market. It suggests. Specifically, a significant decrease in investment on small molecules and the passing of IRA have been observed a significant shift to large -paced drugs. As policy analysts and investors continue to digest these surveys, it is important to see the data deeper, and to understand the future of biopharmaceutical innovation and the future of patient access.

Large molecules and falls of small molecules

The unintended effect of IRA is already felt in clinical research. According to a study, the number of clinical trials started by passing the IRA has decreased by 35 %. Research conducted by a colleague available in Duane G. Schulthess and Medrxiv has tracked commercial examinations for companies with a market evaluation of less than $ 2 billion, and how the IRA affects the initial investment world. We provide important insights about whether you are. More importantly, the trend of investment distribution. By 2024, the aggregate investment in large -paced drugs was 10 times higher than the small molecule. In contrast, early investment in small molecules decreased by more than 70 % after the IRA passed, and the median investment was significantly reduced.

The reason for this shift is how IRA changes financial risks related to the development of various types of drugs. Under the IRA, the Medicare and Medicade Service Center (CMS) have the authority to negotiate the top 20 drugs by expenditure. This provision creates a two -layer refund system for drugs, depending on whether a small molecule is a small molecule or a large molecule. The impact of these price negotiations on the predictive revenue of small dividends is considerable, and it is not attractive to venture capitalists.

A small molecule, which has long been a backbone for drug innovation, is recognized as a higher risk investment, especially when targeting indications with high exposure to the media age population. The author of this research has discovered that investors are increasingly avoiding these high -risk areas. This usually includes general chronic and illnesses among the elderly. This is a clear signal in which the authority of IRA's price negotiations not only affects the price setting, but also changes the calculation that investors are used to determine which drugs are worth developing. is.

Impact on investment behavior

Transition from small molecules is not just a statistical abnormality. This reflects a wider range of investors' behavior. The study shows that the decrease in investment in small molecules is not uniform, but instead, it is linked to the degree of assets exposure to the price negotiations of Medicare. In essence, drugs, which are likely to be subject to med care price negotiations, were much less likely to attract large -scale investments.

On the other hand, Schulthess studies did not observe the same decrease in large -scale investment, even for assets facing med care price setting management. This suggests that investors are looking at large molecules such as biology and genetic therapy if they are not vulnerable to the IRA regulations. These types of drugs often become more difficult to duplicate if they lose patent protection, and their manufacturing and management costs are much higher than small molecular costs. As a result, investors may be considered to be a safer betting of biology and other large therapies in an environment where the economic incentives of small molecular drugs are decreasing.

The study also pointed out that the economic downturn following the Covid-19 pandemic could have influenced these changes. However, a strict contrast about how small molecules and large assets are being handled in the scenery after IRA suggests that the law itself is promoting these changes. If the economic retreat is responsible, the same tendency is expected for both molecules, but that is not the case. The data clearly shows that IRA contributes to the reorganization of biological priority in investment priority.

Double -layer system: Future of small molecules

A decrease in investment in small molecules is not just a academic problem. It has a true meaning in the future of patients and pharmaceutical development. Since small molecules continue to dominate the pharmaceutical scenery, the provisions of IRA price negotiations may inhibit the development of new affordable treatments, especially in a state that affects the elderly, especially in disproportionate. 。

Another analysis shows the calm effect of dramatically reducing the long -term investment value of drug research. Research conducted by Richard Z. XIE, Tess Cameron, Peter Cortinsky, and conducted in prior prints of therapeutic innovation and regulatory science is the current value of small divination drugs (NPV (NPV) at various stages. ) I checked how it would affect. development. Their survey results were worth noting. In the early stages of development, such as the previous clinical and phase 1, the impact of price negotiations may reduce the NPV of drugs by more than 100 % and cannot essentially invest. Even at the launch stage of the product, the NPV can decrease by 40 %, and it is much less attractive for investors to continue funding such projects.

This decrease in NPV is important because it is an important issue for early investors. The financial execution of the development of small molecular drugs is now much more uncertain. As the IRA decreases the potential investment rate, venture capitalists are looking for other places to invest in more advantageous biological or cell therapy, genetic therapy, and even non -pharmaceuticals. There is a possibility.

In addition, IRA's goal is to reduce drug prices and make health care more affordable, but paradoxically leads to long -term medical expenses. As biology and genetic therapy become more prominent, the lack of generics of these drugs can even maintain or increase the overall cost burden. Biology is more complicated to produce, and its manufacturing costs and delivery costs are higher than those related to small molecules, and ultimately lead to an increase in future drug prices and medical expenses.

Policy creators need to pay attention

Some experts are even more clear about the negative impact of IRA. Erica York's senior eco -nomist and research director Erica York stopped the development of new drugs and said, “” Reduces investments that produce new drugs and new applications in existing drugs, and have already felt the effects of the extent that they have already been felt. It will be reduced. “

However, the US government has at least obscure the potential negative impact of IRA under the Biden administration. In a report created for members and committee members in December 2023, Congress research services described in negotiations on Medicare drug prices based on the Inflation Reduction Law. Whether this effect is substantially important, especially because it is unknown how much negotiations will affect the profit of the manufacturer. In addition, IRA states that biology can be relatively attractive for investment. Because he concluded, “I don't know if this effect is actually important.”

The impact of IRA's innovation and investment emphasizes the need for a subtle approach beyond aggregation statistics. Previous research, including them, has focused on a wide range of trends, but is not appropriately dealt with investment segmentation based on specific characteristics of drugs such as target patient groups. As evidence shows, these segments can have extensive results in both new treatments and wider healthcare systems development.

Understanding how various types of drugs are evaluated in light of the provisions of IRA will provide a more accurate situation of long -term impact on innovation. For the first time, policy creators and industry leaders can create a strategy based on more information to balance the cost reduction of pharmaceutical innovation. 。

Conclusion

The passing of IRA has definitely created a paradigm shift in the biopharmaceutical department. The goal of reducing drug prices and medical expenditures is noble, but the impact of the law on innovation may be more serious than originally expected. Initial investment in small molecules is decreasing, but large molecular drugs have a growing interest in investors, and have a branched landscape that can affect patient access to affordable drugs. I am creating it.

In order to adapt to the new reality formed by the IRA, it is necessary to balance costs and encourage new innovative treatments to adapt to the new reality. The complete impact of the IRA may take years to develop, but the changes in the investment behavior that have been observed today are the result of the future of drug innovation, and ultimately for the patient. Suggests. Investors, researchers, and policy proppons must pay close attention to these evolving trends in order to guarantee that the future of biopharmaceutical innovation is lively and sustainable. yeah.