Hispanics scientists are making lifesaving strides. This drug law could set them back | Opinion

Isabel Aznarez is one of the unsung heroes of biotech research. She’s a co-founder of Stoke Therapeutics, a company at the forefront of research into genetic therapies for severe diseases, many of which have no treatments currently available. Founded in 2014 with venture capital, Stoke went public in 2019.

Aznarez is also a trailblazer as a Latina in a field in which Hispanics have been woefully underrepresented. Although Latino people make up more than 18% of the U.S. population, they account for fewer than 9% of those working in the life sciences. Developing potential therapeutics for such genetic diseases as Dravet syndrome, a rare and severe form of epilepsy that strikes babies in their first year of life, probably keeps Aznarez busy enough. But she’s also a role model for a new generation of Latina scientists.

Unfortunately, however, unless Congress revisits the issue soon, the drug pricing provisions of last year’s Inflation Reduction Act could have a devastating impact on research like Aznarez’s — and on the foothold Hispanics have gained in biotech research. In their worthy effort to hold down drug costs, lawmakers unintentionally introduced a gross distortion into the incentive structure for new research. The good news is that an easy fix is available and would command bipartisan support in legislation this year.

The Inflation Reduction Act gives Medicare officials, for the first time, the power to negotiate directly with drugmakers for lower prices on some of the most popular and expensive brand-name medications Medicare covers. The Centers for Medicare and Medicaid Services is slated to name the first 10 drugs for price negotiation later this year, with more to follow each subsequent year.

Lawmakers wisely recognized that in addressing high drug costs, they needed to take care not to destroy incentives for investors to put up the significant capital it takes to develop therapies like those Aznarez has been working on. So new drugs become eligible for price negotiation only a specified number of years after approval by the Food and Drug Administration. That allows investors in successful medications time to recoup their upfront investment costs and generate a return, which can then be used to spur development of the next treatment or cure.

The distortion comes from the two-tier structure lawmakers put in place on negotiation eligibility. The Inflation Reduction Act gives biologics — drugs that are derived from organic compounds and are generally administered by infusion or injections — a 13-year period of exemption following FDA approval before they are eligible for price negotiation. For “small-molecule” drugs, meanwhile — chemical compounds typically in pill form — they set the exemption period at nine years.

Without intending to do so, Congress created a massive disincentive for new research into small-molecule drugs. One pharmaceutical executive estimated that years 10 through 13 in the life of a new medication account for 50% or more of the total revenue it will generate. Biotech companies and their investors green-light their development projects on the basis not only of clinical promise, but also on the projected returns if successful.

Thus, many projects for drugs delivered as pills will no longer be deemed worthy of pursuit because of the potential loss of four years of revenue. And on the flip side of the coin, investors will lean more heavily into injectables than they otherwise might.

This is already happening. A recent survey revealed that 63% percent of drug firms are considering a shift away from pill drugs to injectables in the coming years.

This distortion is bad news at a number of levels. First of all, small-molecule pill drugs have been showing great promise in oncology treatment. We need all the weapons we can get in our arsenal against cancer.

Second, small-molecule pills are easy to take at home, whereas biologics typically require repeat trips to a hospital, clinic or doctor’s office. That means patients must take time off from work and incur transportation costs — a combination that places an added burden on Latino and other minority and rural communities.

Third, injection or infusion drugs coming on the market tend to be more expensive than small-molecule pills. A shift their way because of the Inflation Reduction Act’s incentive distortion will be counterproductive in controlling costs.

We need to be doing everything we can to support inspiring scientists like Isabel Aznarez — and their work on investigative therapeutics such as STK-001, Stoke’s small-molecule pill treatment for Dravet. Congress can help by resetting the exemption from price negotiations to the same 13 years for both small-molecule compounds and biologics.