Bipartisan legislation would correct the IRA’s “pill penalty,” which will have a chilling effect on the prescription drug ecosystem
We Work For Health today applauded the reintroduction of the Ensuring Pathways to Innovative Cures (EPIC) Act (H.R. 1492), a bipartisan bill that addresses the harmful “pill penalty” created by the Inflation Reduction Act (IRA). Introduced by Representatives Greg Murphy (R-NC), Don Davis (D-NC) and Richard Hudson (R-NC), this legislation seeks to correct a provision of the law that disincentivizes the development of small molecule drugs – essential treatments for conditions like heart disease, cancer and mental health disorders.
Small molecule drugs, which include pills, capsules and creams, make up more than 90% of all prescriptions and two-thirds of new drug approvals annually. Yet, under the IRA, they face stricter price-setting timelines (9 years vs. 13 years for biologics), threatening the future of these life-saving medicines.
“One of the most damaging consequences of the IRA is the ‘pill penalty,’ which severely disincentivizes the development of small molecule drugs,” said Dan Leonard, Executive Director of We Work For Health. “The EPIC Act represents an important first step toward addressing this critical issue. We need to inspire scientists and investors to continue advancing small molecule research and safeguard America’s global leadership in life sciences. Ensuring that medications remain accessible, affordable and effective is a goal that policymakers from both sides of the aisle can and should rally behind.”
A new analysis by research firm Vital Transformation found that small molecule funding has dropped by 70% in the two years since September 2021, when the IRA was first introduced. Further, during the first seven months of 2024, biologics funding was 10 times larger than small molecules, despite the latter being the most common and convenient treatment option for patients.
Earlier research estimated between 79 and 155 fewer small-molecule medicines will be developed over the next 10 years due to the pill penalty and that investment into post-approval research and new indications will be severely impacted. Together, these reductions are expected to cost the public 116 million life years lost.
Advocates across North Carolina, a hub for life sciences innovation, praised the bill’s reintroduction:
“We applaud our leaders in Congress for reintroducing the EPIC Act,” said Laurie Barnhart, Executive Director of the North Carolina State Grange. “All patients are worthy of investment in medical science, and this legislation is crucial in righting the wrongs put in place by previous policy.”
Laura Gunter, President of the North Carolina Life Sciences Organization, said: “The EPIC Act is necessary to foster North Carolina’s drug innovation and research investment for many products, including small molecule products. We must allow science to guide innovation, not the federal government to pick winners and losers. We applaud our North Carolina leaders for today’s reintroduction.”
We Work For Health urges policymakers to support the EPIC Act to ensure continued investment in small molecule research and protect the health of millions of Americans. To learn more, see our latest fact sheet on the pill penalty.
About We Work For Health
We Work For Health brings together national and local business leaders, and labor, biopharma, patient advocacy and other healthcare-related stakeholders to support policies and initiatives that foster innovation and facilitate the delivery of lifesaving and life-enhancing medicines. As the bedrock of innovative jobs in the U.S. today, the life sciences sector supports more than 4.9 million American employees. Advancing and protecting these jobs is critical for those employees, the economies they support, and the patients they serve.
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