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

Abstract

11032 Background: The Inflation Reduction Act’s Drug Price Negotiation Program (DPNP) has shifted the financial incentives for post-approval clinical development, which is particularly relevant to oncology given the role of subsequent indications in expanding treatment options in cancer patients. The law may disproportionately disincentivize post-approval development in small molecules, which faces a shorter timeline towards DPNP eligibility than biologic (7 vs. 11 years post first approval). We aimed to explore the impact of IRA’s passage on industry-sponsored small-molecule versus biologic post-approval clinical trials in oncology. Methods: Using the Citeline’s TrialTrove database, we identified industry-funded Phase I-III trials initiated between 7/2014 and 8/2024 for approved oncology drugs, excluding vaccines and COVID-19-related trials. Trials were categorized into subgroups based on whether they primarily tested small molecules or biologic, excluding trials testing both (e.g., combination therapies) from the subgroup analysis. We used Wilcoxon rank-sum tests to compare the monthly average of trials pre- and post-IRA for all post-approval oncology trials and in the subgroups. The pre/post-IRA comparison was conducted (1) across the full period (7/2014-7/2022 vs. 8/2022-8/2024), and (2) between the year before IRA’s passage and the most recent available year (shorter-time: 8/2021-7/2022 vs. 9/2023-8/2024). We performed a difference-in-difference (DiD) analysis to assess the marginal impact (“dosage effect”) of IRA on small molecule trials, using biologic trials as the counterfactual. The assumption was that trials would have followed a similar trajectory in both groups in the absence of IRA’s differential DPNP eligibility timelines. Results: Across the full period, monthly average of post-approval oncology trials decreased by 38.4% (p<0.01) following the IRA’ passage, and small molecule and biologic trials dropped by 48.6% (p < 0.01) and 27.4% (p < 0.01) post-IRA, respectively. In the shorter-time comparison, there was a 29.6% (p<0.01) reduction overall, and the monthly average of small molecule trials decreased by 43.9% (p < 0.01), with no statistically significant change in biologic trials (p = 0.48). Across the full period, the DiD model suggested that the IRA was associated with 7.7 fewer trials per month for oncology small molecule drugs, compared to the biologic drugs (-7.7, 95% C.I.: -9.9 to -5.5, p < 0.01). Conclusions: The IRA’s passage was associated with fewer industry-funded post-approval oncology trials and larger reductions for small molecule trials than biologic trials. These findings support concerns about IRA’s disincentivizing effect on post-approval development in oncology, particularly for small molecule drugs, which are subject to a shorter DPNP eligibility timeline.