Though elements of the drug price negotiations under the Inflation Reduction Act (IRA) make medicine more affordable for patients, the implementation of these regulations and policies raise unintended consequences for cancer drug development, four experts at the recently held BIO CEO & Investor Conference said.

All were speaking at a panel on the challenges of oncology drug discovery and development at the conference, which closed on 27 February in New York.

The true impact of IRA regulations is not yet clear, said Dr. Johanna Bendell, global Head of Pharma Research and Early Development Oncology at Roche. While the negotiations for the first 10 drugs have begun, the industry is in the dark about whether the final price is simply the lowest possible price, or if the negotiations will take into account the development and lifecycle of a cancer drug, she added.

There is a significant amount of money that goes into understanding a specific cancer and how it reacts with a medication and control arms, said John Oyler, CEO of BeiGene. The company’s  Brukinsa (zanubrutinib) is approved for a number of hematological conditions like mantle cell lymphoma and marginal zone lymphoma, and the rare disorder Waldenström’s macroglobulinemia. It is not yet clear if negotiations will drive development programs to remain in big indications and discourage companies from developing medications for rarer forms of cancer, he added.

Kate Haviland, CEO of Blueprint Medicines, went on to say that the IRA, in its current form, seems to deprioritise the rarer, smaller indications and encourage companies to target opportunities in larger and riskier indications that require more upfront capital. Oyler also said the legislation may impact orphan indications and drive research and clinical development away from the US.

Companies seek US regulatory approval first due to the benefits of the accelerated approval pathway and institutions, but the industry may see key opinion leaders (KOLs) studying orphan indications move to Europe because “it’s important to be working in the commercial market,” added Oyler.

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The US has become the innovation hub for development largely due to the regulatory support that allows small biotechs to get to commercialisation and create value, explained Lynn Seely, CEO of the California-based biotech Lyell Immunopharma. She went on to say the price negotiations are, specifically from an investor point of view, giving companies less time to recoup an investment.