North Carolina’s thriving life sciences and biopharmaceutical sector is at risk due to one federal law that makes investing in an entire class of common medicines known as “small molecules” less attractive. Making up over 90% of medicines on the market, many North Carolinians take small-molecule medicines every day, like ibuprofen to treat a headache or antihistamines to address allergies.
Small-molecule medications can be easily absorbed into the bloodstream and can cross into the brain, making them important therapeutic options for not just everyday illnesses but many debilitating and severe conditions as well, such as neurologic conditions, cancers and more.
The 2022 Inflation Reduction Act allowed Medicare to negotiate the price of certain drugs directly with manufacturers. However, the law created a discrepancy that makes no sense. New small-molecule drugs become eligible for price negotiation nine years after being approved by the Food and Drug Administration, while another class of drugs becomes eligible for negotiation after 13 years.
This arbitrary distinction between classes of medicines will discourage investment in new small-molecule drugs because they are eligible for price negotiation more quickly, giving less time to recoup what can be up to $2 billion in research and development costs these days. One study found that this “pill penalty” will lead to nearly 80 fewer small-molecule medicines — new treatments that could address cancers, rare diseases, and other chronic conditions. New research has also found that since the IRA was established, small-molecule drug investment has fallen 68%. For diseases mainly affecting older populations, investment has dropped 74%. It’s clear we must quickly course correct to get much-needed medical research and development back on track.
North Carolina’s congressional delegation has recognized the effect this pill penalty would have on patients and the pharmaceutical industry here in North Carolina and beyond. They have reintroduced the bipartisan Ensuring Pathways to Innovative Cures (EPIC) Act, which simply equalizes the price-negotiation window for all new drugs at 13 years, which would restore investor confidence and continue driving innovation in all classes of vital treatments.
North Carolina has long been a national leader in life sciences and biopharmaceutical innovation, home to the fourth-ranked biotech hub in the country. Our state is home to over 800 life sciences companies, all driving transformative change in critical sectors, including pharmaceutical research and development, manufacturing, gene and cell therapy, and more.
The EPIC Act restores the incentive to invest in news medicines no matter how they might be formulated, protecting patient access to new cures and treatments, while also encouraging life sciences innovation to ensure North Carolina remains a national leader in life sciences and biopharmaceutical research and development. The Trump administration even released an executive order urging Congress to end the investment distortion the pill penalty creates — a step in the right direction to bring new medications to patients’ medicine cabinet.
The EPIC Act is a common-sense policy, and I applaud Sen. Thom Tillis and Richard Burr and Reps. Don Davis, Richard Hudson and Greg Murphy, M.D., for standing with North Carolina and all Americans. Congress must support this “EPIC” bill to ensure the next generation of treatments and cures will be there for all of us.