AstraZeneca: Inflation Reduction Act in US risky for rare diseases
Lawsuit notes it may limit prices, work on orphan drugs like Soliris
AstraZeneca has announced filing a legal challenge to certain aspects of the U.S. Inflation Reduction Act (IRA), arguing that there may be unintended but harmful consequences for people living with rare diseases such as neuromyelitis optica spectrum disorder (NMOSD).
It joins a number of other pharmaceutical companies — including Bristol Myers Squibb, Johnson & Johnson, and Merck (known as MSD outside North America) — in court filings that oppose the sweeping legislation aiming to tackle healthcare costs, inflation, and climate change.
The IRA was passed by the U.S. Congress and signed into law by President Joseph Biden about a year ago.
Among its healthcare-related aspects are certain measures to help control the price of medications, limiting patients’ out-of-pocket costs. This includes the ability for Medicare, a federal health insurance program for people ages 65 and older, to negotiate prices for certain medications, with the new prices taking effect in 2026.
Orphan drugs exempt from price limits if approved to treat one disease
While the act is expected to lower healthcare costs, some argue that the measure will inhibit therapy development by limiting pharmaceutical company returns on approved medicines.
AstraZeneca believes the IRA’s drug price negotiation provisions are in direct conflict with the goals of the Orphan Drug Act, passed 40 years ago to incentivize work into treatments for rare diseases.
“The IRA’s drug pricing provisions … run headlong into the goals of the Orphan Drug Act, a federal statute designed to encourage manufacturers to invest in new therapies for rare (or “orphan”) diseases,” the company argues in its lawsuit, filed on Aug. 25.
An orphan drug designation from the U.S. Food and Drug Administration (FDA) offers pharmaceutical companies incentives that make experimental therapies for rare diseases economically more attractive. This includes tax breaks, periods of marketing exclusivity upon approval, and other regulatory support.
Since the drug act’s 1983 passage, more than 600 medicines for 1,000 rare conditions have been approved, according to AstraZeneca. It also noted that most of the 7,000 known rare diseases have no approved treatments, and “continued innovation” in this area is needed.
“Rare disease and cancer patients depend upon high-risk, low-probability drug development that takes many years to develop and aims for cure,” Dave Fredrickson, executive vice president of the oncology business unit at AstraZeneca, said in a company press release.
Orphan drugs are exempt from IRA price negotiations, but this exemption applies only to those with one approved indication, meaning they can treat one specific disease. This limitation can affect a pharmaceutical company’s willingness to pursue additional indications for its orphan drugs.
“If today’s version of the law stands, patients in the United States with rare conditions, who have benefited from the Orphan Drug Act, will get delayed access to scientific breakthroughs relative to other parts of the world,” Fredrickson said.
Company notes that Soliris first approved years before NMOSD extension
AstraZeneca emphasized that the nature of rare disease therapy development is that, over time, orphan drugs aim to be approved for multiple diseases.
It gave as an example Soliris (eculizumab), first approved in 2007 to treat paroxysmal nocturnal hemoglobinuria (PNH), a rare blood disorder. The therapy, by an AstraZeneca subsidiary, wasn’t cleared for NMOSD until 2019, with approvals for two other rare diseases coming in between.
The rolling approval framework that allowed Soliris to treat four rare diseases is threatened by the IRA, AstraZeneca argues, noted that if Soliris was developed today, the Inflation Reduction Act would have deterred the company from investigating further uses for Soliris beyond PNH.
Likewise, Lynparza (olaparib), a company medicine initially approved for late-stage ovarian cancer, later was expanded for use in other types of cancer.
“Correcting these issues and protecting medicines like LYNPARZA and SOLIRIS from price-setting will have minimal impact on the overall cost to the US healthcare system but a tremendous impact on patients,” AstraZeneca stated in its release.
In a research letter published this month in JAMA Network Open, scientists at the Center for the Evaluation of Value and Risk in Health, in Boston, examined how the IRA might affect the approval of orphan medications for subsequent indications. The letter was titled “Follow-On Indications for Orphan Drugs Related to the Inflation Reduction Act.”
They found that nearly one-quarter (23%) of 280 orphan drugs approved by the FDA between 2003 and 2022 later were cleared for at least one other indication. Of these 152 additional indications, 61% were for rare diseases.
The mean time from initial approval of a new orphan drug until its expansion to another indication was 53 months, or nearly 4.5 years.
“Our analysis suggests that the potential foregone follow-on indication approvals for serious illness and unmet needs could be nontrivial,” the researchers wrote, adding that “such potential losses should be considered against the gains to consumers and society that come with lower drug prices.
“How much the IRA will affect future innovation is unknown,” they added, but “efforts to address prescription drug costs must balance the benefits of lower drug prices with downsides in terms of reduced future innovation.”
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