New legislation proposes eliminating Medicare's "pill penalty."

Legislation proposed by Republican lawmakers aims to eliminate what is known as the "pill penalty" in Medicare. This term refers to a provision in the Inflation Reduction Act (IRA) that affects small-molecule drugs. Currently, these drugs can be negotiated for prices only nine years after their approval. In contrast, large-molecule drugs have a 13-year period before price negotiations begin. Critics say the "pill penalty" discourages investment in research and development of new small-molecule drugs. This could adversely affect patients who are waiting for new treatments for conditions they suffer from. The legislation, introduced by Senators Thom Tillis, Ted Budd, Marsha Blackburn, James Lankford, and Steve Daines, is known as the EPIC bill. Its goal is to amend the IRA to better support research in this area. Proponents argue that the current policy damages the ability of drug makers to recover their research costs. They believe that funds are being shifted to other types of research, resulting in fewer new drugs coming to market each year. The IRA, passed in 2021, aimed to reduce government deficits and make prescription drugs more affordable. It also set guidelines for negotiating drug prices in the US. If the EPIC bill passes, it could significantly change the drug pricing landscape. Supporters and opponents alike acknowledge that the outcome and implications of these changes may be unpredictable.