TAPP Applauds Sponsors of EPIC Act to Eliminate the “Pill Penalty”

Currently, the Inflation Reduction Act enforces price controls on drugs under two different timelines. Small molecule drugs that are approved as New Drug Applications (NDAs) become eligible for price controls after nine years. Large molecule drugs, known as biologics, become eligible after 13 years. This unequal treatment is known as the “pill penalty.”

A problem occurs with small molecule drugs that incorporate or utilize genetically targeted technologies that have similarly complex manufacturing requirements and development timelines as biologics. These drugs are often classified as small drugs, despite costing the time and money of large drugs. Nine years is too short a grace period for these genetically targeted technologies, meaning innovators will not invest research into such a costly process because there is no hope of recovering the costs. It’s time to end the pill penalty.

Thankfully, a bipartisan, bicameral group in Congress has introduced legislation, the “Ensuring Pathways to Innovative Cures” (EPIC) Act (HR 7174) in the U.S. House of Representatives and companion legislation in the U.S. Senate, to end the pill penalty.

The Trade Alliance to Promote Prosperity applauds the EPIC Act’s sponsors, U.S. Representatives Greg Murphy, M.D., Don Davis, and Richard Hudson, and U.S. Senators Thom Tillis, Ted Budd, Marsha Blackburn, James Lankford, and Steve Daines, for recognizing that small-molecule and large-molecule drugs are equally effective treatment options and for aiming to ensure that the development of one treatment option is not incentivized over another.

TAPP encourages swift passage and enactment of the EPIC Act.