Illustration: Sarah Grillo / Axios
Eliminating the "pill penalty" in the Inflation Reduction Act's drug price negotiations would cost about $10 billion over a decade, according to a preliminary CBO score, per Hill and industry sources.
Why it matters: The proposal, known as the EPIC Act, is a priority of pharmaceutical manufacturers and would lengthen the time before small molecule drugs could be picked for drug price negotiations.
State of play: It's possible that the measure could be included in the reconciliation bill, though the added cost could make it tougher to make the budget numbers add up while conservatives are pushing for deep spending cuts.
- The bill got a lift when President Trump issued his drug pricing executive order last week. The order directed Congress to work with HHS to end what they called "the distortion" that undermines the development and investment in small molecule drugs.
- House Ways and Means and Energy and Commerce both have jurisdiction over the matter. Spokespersons for both wouldn't comment on what policies may be in play for reconciliation.
Context: Currently, small molecule drugs are eligible for negotiations seven years after FDA approval, while biologics are eligible after 11 years.
- Since the IRA was implemented, the drug industry has been pushing to equalize the two, arguing that fewer small molecule drugs will come to market without the change.
- Now that Trump has elevated the issue, the pharmaceutical industry sees another opportunity to possibly get a fix over the finish line.
The bottom line: The Trump administration is defending the drug price negotiations in court. Although major changes to the law don't appear to be in the cards, targeted changes like EPIC Act are still possible — if cost concerns don't prevail.
