Hogan Lovells – Policy considerations for advancing rare disease therapies after the IRA
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Author: Alice Valder Curran
The U.S. Inflation Reduction Act of 2022 (IRA) includes major provisions adding complexity to market access, making it even more important to understand which indications, dosage forms, and product strengths to pursue for a target molecule, and in what order. This is especially true for stakeholders engaged in rare disease research.
Commercial impact. The IRA’s Drug Price Negotiation Program (DPNP) seeks to lower the prices of certain high Medicare spend drugs without generic / biosimilar competition. Although orphan drugs are exempt from the DPNP, the exemption only applies under the narrow circumstances where the orphan drug is indicated for a single rare disease or condition and all approved indications are for the treatment of that single rare disease or condition. As a result, the IRA has the potential to disincentivize additional investment into expanding the approved use of a therapy to treat more than one orphan disease or non-orphan indications, impacting many high unmet need populations. Research programs aimed at developing second orphan indications have already been particularly impacted.
Legislative fix? The Optimizing Research Progress Hope and New Cures (ORPHAN Cures) Act introduced in September 2023 proposes expanding the DPNP’s orphan drug exemption to include drugs designed to treat “one or more rare diseases or conditions” (emphasis added). While many industry observers support this bipartisan legislation, that does not mean Congress will act on it, particularly in an election year where President Biden has made drug pricing a central pillar of his campaign. Continued stakeholder advocacy and communication on the ORPHAN Cures Act and other IRA fixes (such as the Ensuring Pathways to Innovative Cures (EPIC) Act) may prove critical in bringing about changes.)
The IRA represents a fundamental shift in national policy on regulating the pricing of innovator, generic, and biosimilar medicines for California life sciences companies seeking to introduce life-saving products to patients in the United States and beyond. Analyzing the impact of these changes is a life cycle management imperative for stakeholders with products across the rare disease development pipeline.
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Background content:
Inflation Reduction Act’s Drug Price Negotiation Program explained,
Inflation Reduction Act’s Medicare Part B and D inflation rebates explained,
Inflation Reduction Act’s Medicare Part D benefit redesign explained,
CMS issues Medicare Part B and Part D inflation rebate guidance,
CMS issues initial guidance on Drug Price Negotiation Program,
Portfolio valuation in the aftermath of the IRA,