Opinion: The IRA’s nonsensical distinction between small- and large-molecule drugs

Thanks to advances in science, notably the completion of the Human Genome Project 20 years ago, we are able to treat diseases more effectively than ever before. Researchers have more sophisticated tools not only to identify new drug targets, but also to make drugs to hit those targets. A wide variety of therapeutic agents help make these drugs, including chemically synthesized small molecules; larger molecules made of amino acids like peptides, proteins, and antibodies; and nucleic acids like RNA or DNA. Choosing among these approaches requires looking at the target attributes. Is it inside the cell or outside? Is the target an enzyme, a gene, or a lipid particle? Do we need to block the target or stimulate it? Science is — and should be — the guide to determine the optimal approach for patients.

That’s why, to researchers like me, a provision in the recently enacted Inflation Reduction Act is puzzling. For no clear reason, it draws a distinction between large and small molecule medicines. As part of the IRA’s Medicare price control provisions, price negotiation for small molecule medicines is allowed nine years after Food and Drug Administration approval compared with 13 years for large molecule biologics. There is no scientific reason for this distinction, and it will have a real and detrimental impact on drug discovery and patient care. Nine years is not enough time to recoup the deep investments into small molecule R&D before government price controls take effect. As a result, companies will deprioritize small molecule programs, lowering the potential to create drugs using these technologies.

Congress should correct this imbalance by allowing negotiation after a full 13 years for both small molecule medicines and their large molecule counterparts. Without this parity, research in small molecule medicines will languish. And that will hurt patients with challenging diseases. Estimates from 2017 suggest that 85% of disease targets were “undruggable.” But, because of their size, precision small molecules can reach a number of these targets.


For example, in the past few years alone, companies have introduced several small molecule breakthroughs for diseases such as spinal muscular atrophy, which is the leading genetic cause of infant mortality and certain lung cancers caused by mutations in the KRAS gene. KRAS is responsible for many of the most common cancers.

At Eli Lilly and Co., where I serve as chief scientific officer, we received FDA approval in 2021 for a small molecule inhibitor to treat early-stage high-risk breast cancer. This approval marked the first treatment advancement in the early breast cancer setting in nearly 20 years. Had the IRA provision been in place five years ago, companies like mine would have been strongly disincentivized to make investments in these important medicines.


Further, some of the most critical research is conducted after a medicine is initially approved. For example, nearly 60% of oncology medicines approved a decade ago received additional approvals for different types of patients and conditions in later years. Our drug for breast cancer is one example. It was first approved for late-stage breast cancer in 2017, and four years later we completed the research allowing it to be used to treat early breast cancer. By subjecting small molecule medicines to price setting after only nine years, companies lose the incentive to invest in post-approval R&D and patients lose access to potential treatments.

Small molecule medicines have other important benefits. Not surprisingly, patients prefer small molecule medicines that usually come in the form of pills over biologic injections or infusions by a wide margin. They are generally easier to make at scale and nearly always less expensive for patients. Importantly, small molecule medicines are more easily genericized than biologics, leading to greater adoption and lower costs. After two years on the market, the average adoption rate for generics is 82%. Compare that figure with the most recently launched biosimilars, where the average adoption rate after two years is still well below 60%. Given all the advantages small molecules have, it is perplexing why Congress would seek to disincentivize their development.

Clearly, legislative policy has not kept pace with the rapid evolution in drug discovery. Proponents of the 9/13 disparity argue that it aligns with decades-old timeframes for marketing exclusivity granted by FDA in which small molecule medicines get five years and biologics get 12 years, but this argument is a false equivalency. Patents, not marketing exclusivity, are the primary tool for protecting intellectual property, and small and large molecule medicines get the same number of years — 20 — from when the patent application is filed. Nine years to market for a new small molecule medicine before price negotiation is allowed cuts into the years when patent protection should allow researchers to recoup their deep investment and risks taken.

Both small and large molecule medicines need at least 13 years before they come under the Medicare price control regime or incentives to pursue risky research into precision medicine will evaporate.

Researchers need to follow the science to find the best medicine for patients whether it’s “large” or “small.” Policymakers shouldn’t undermine that pursuit by creating separate systems to develop each category of medicine, especially when they discriminate against some of the best types of medicines we can make. The result will be fewer treatments and cures. And that will stifle the promise of science as we build on this legacy of genome mapping to develop the next generation of medicine.

Daniel M. Skovronsky, M.D., Ph.D. is executive vice president, chief scientific and medical officer, and president, Lilly Research Laboratories, Eli Lilly and Co.

Source: STAT