Unintended consequences of the Inflation Reduction Act: clinical development toward subsequent indications

Area of Science:

• Pharmaceutical Sciences
• Health Economics
• Regulatory Science

Background:

• High-spend Medicare Part D small molecule drugs represent a significant area of pharmaceutical expenditure.
• Understanding the clinical development landscape for these drugs is crucial for assessing the impact of healthcare legislation.

Purpose of the Study:

• To map the clinical development timelines of high-spend Medicare Part D small molecule drugs.
• To evaluate the potential effects of the Inflation Reduction Act (IRA) on research and development (R&D) investments for new drug indications.

Main Methods:

• A descriptive analysis of R&D timelines for small molecule drugs among the top 50 Medicare Part D spenders in 2020.
• Utilized public data from ClinicalTrials.gov for pivotal trial postings and FDA approval dates for initial and subsequent indications.

Main Results:

• 30 of the top 50 drugs had subsequent indications; 34 were based on preapproval research, with many approved within 2 years of initial approval.
• 42 drugs gained additional indications via postapproval studies, averaging 7.5 years after initial FDA approval, with over half approved more than 7 years later.

Conclusions:

• The IRA may disincentivize the development of multiple indications for small molecule drugs.
• Investments in postapproval research and development for additional indications may be reduced, impacting pharmaceutical innovation.