Inflation Reduction Act Forcing Companies to Abandon Drug Research

According to information released by a number of drug companies that also conduct pharmaceutical research, many promising new treatments are being put on hold or abandoned altogether because of the Federal government's Inflation Reduction Act (IRA).

  IRA has caused many companies to abandon research

The IRA was intended to allegedly save consumers money by allowing certain medications to be subject to price-fixing by the government (FDA). According to the Maryland Daily Record (one of a number of sources reporting this information:

 "By September, federal officials will select the first 10 medicines subject to price-setting from those covered by the Medicare Part D prescription drug program. The price caps for these drugs will go into effect in January 2026."

As many as 78 percent of biopharmaceutical companies, including AstraZeneca and Bristol-Meyers Squibb plan to curtail a number of early-stage projects due to forecasted increased costs from the IRA.

Why are they cutting programs in a number of promising areas? According to an article from earlier this year on the website Pharma.org, parts of the Inflation Reduction Act discourage the development of medicines that come in pill form, which researchers say are an important part of the various methods used to treat cancer.

There have been critics, including politicians and some in the Biden Administration, who have long claimed pharmaceutical profits are too high, and drug companies' profits price some drugs out of the reach of citizens.

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However, opponents of the IRA mandates say a lot of these profits are utilized for biopharma research. According to the Maryland Daily Record:

 "Alnylam Pharmaceuticals recently decided not to proceed with a trial for a drug that could treat a rare eye disorder, citing the IRA."

They also noted:

"According to research from the Tufts Center for the Study of Drug Development, these failures are why it costs $2.6 billion to develop just one new drug that successfully makes it through the FDA approval process. Price caps make it impossible for drug makers and their investors to make up for their losses by earning a reasonable return on the small number of drug development projects that succeed."

By September, we will see what impacts result from the first round of government price fixing per the requirements of the IRA.