Early impact of the Inflation Reduction Act on small molecule vs biologic post-approval oncology trials.

Introduction: Under the Inflation Reduction Act (IRA), small molecule drugs are subject to a shorter timeline toward eligibility for selection to the Drug Price Negotiation Program (DPNP) than biologics (7 vs 11 years post-approval), raising concerns about incentives for post-approval clinical development.

Methods: Using Citeline's Trialtrove database (7/2014-8/2024), this longitudinal study explored the impact of IRA's passage on industry-sponsored, post-approval phase I-III clinical trials in small molecule vs biologic oncology drugs, excluding vaccine-related trials. We used a difference-in-difference design to explore the impact of the IRA's differential DPNP timeline on small molecule trials in oncology by comparing changes in the number of newly initiated post-approval trials in small molecule drugs after the IRA (first difference) with changes in biological trials (second difference).

Results: The monthly average of small molecule and biologic trials dropped by 45.3% (P < .01) and 32.5% (P < .01) post-IRA, respectively. Compared with biologics, small molecules were associated with an additional decrease of 4.5 trials/month (-4.5, 95% CI, -7.1 to -1.9; P < .01) after the IRA's passage.

Conclusion: This finding supports hypotheses that the IRA's differential timelines toward DPNP eligibility for the 2 molecule types may disproportionately disincentivize post-approval research in small molecule drugs.