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Fix BBB’s Rx Provisions so Patients Aren’t Stuck With High Bills and More Needles
COMMENTARY

January 4, 2022by Peter Kolchinsky, Managing Partner of RA Capital Management and Michael Gilman, CEO of Arrakis Therapeutics
Fix BBB’s Rx Provisions so Patients Aren’t Stuck With High Bills and More Needles
This image, provided by Pfizer in October 2021, shows the company's COVID-19 Paxlovid pills. U.S. health regulators on Wednesday, Dec. 22, 2021, authorized the first pill against COVID-19, a Pfizer drug that Americans will be able to take at home to head off the worst effects of the virus. (Pfizer via AP)

Health care reforms that make medicines more affordable for patients and encourage discovery of powerful new medicines are possible. We’re nearly there: If Congress were to fix some counterproductive flaws, the drug pricing provisions in the Build Back Better Act would represent genuine advances.

The bill doesn’t sufficiently limit patients’ out-of-pocket costs and it unwisely skews R&D incentives in favor of large-molecule (biologic) medicines that must be injected or infused over the discovery of small-molecule medicines (pills), which have broader utility against disease and are more convenient for the patient. That can’t be what Congress intended and certainly isn’t good for patients or society.

We get new medicines because, historically, investors have been willing to fund portfolios of complicated and risky drug discovery projects (billions of dollars over more than a decade each) expecting that the rare successes would drive positive overall returns on these portfolios. We have learned that successful medicines have an average of 14 years’ patent protection before generic competition significantly erodes their prices and profits; those returns encourage continued investment in new medicines.

In the last decade, however, some medicines have evaded competition and stayed expensive longer, a problem that lawmakers are right to address, essentially using price controls to accomplish what competition normally would do. While BBB subjects biologic drugs without biosimliar competition to such price controls 13 years after coming to market, the proposed law subjects small-molecule drugs to price controls after just nine years. This would significantly reduce the return on investment in small-molecule medicines and will ultimately discourage their development, which would be an unhappy outcome for patients.

Without adequate incentives, industry just doesn’t pursue certain R&D. Few drugs have ever been launched with only nine years in which to generate a return because investors don’t typically fund such projects. BBB would condemn small-molecule projects for diseases primarily covered by Medicare (e.g., cancer, Alzheimer’s) to fail this basic funding test. What we know has demonstrably been enough time, is an average of around 14 years.

Typically made up of fewer than 100 atoms, small molecules are remarkably versatile medicines. Their size lets them go to any part of the body they might be needed. Biologics are often 1000 times bigger, which keeps them from distributing as widely in the body and getting inside our cells. When that’s not essential, biologics are outstanding drugs. But for many diseases, especially cancer and chronic disease in the elderly, we need to do things that only small molecules can do. Their special properties matter to patients and society in ways that should matter to Congress.

From a societal perspective, it would be better if all medicines were small molecules. Unlike biologics, which must be directly injected or infused into the bloodstream to avoid destruction in the digestive tract, most small molecules survive a trip through the gut and are absorbed directly into the bloodstream. That’s why they work as pills. Pills are clearly more convenient than injections, which means patients are more likely to adhere to a small-molecule therapy, improving outcomes. And pills are cheaper to dispense, store, and administer, saving money and time.

Small-molecule drugs are hard to invent. A single atom or rotation of part of the molecule can be the difference between a good drug or a dangerous one. But small molecules are easier than biologics to make, once you know the recipe, just as it takes talent to write a great song but then it’s easy to replicate and distribute copies at little cost. Biologics are more like a three-star meal; even with the same recipe, quality may vary from kitchen to kitchen or even from day to day at the same restaurant.

That is why small-molecule drugs reliably go generic and biologics do not. Small molecules can be reproduced by dozens of companies that compete on price, generating savings for society soon after an innovator’s patents expire.

Consider the differences between infused COVID antibodies (which are biologics) and the recently approved pill Paxlovid, which is not only cheaper to make and more convenient than antibodies, but is also more effective and likely to work against future strains of coronaviruses. Which is preferable? The answer is clear, and yet BBB gives the wrong one, skewing incentives towards biologics.

We are excited not just for what small-molecule medicines do for patients today but what they will do for patients in the future. We’re constantly learning new ways to deploy these molecules against diseases for which treatment options today are few. While most small molecules target disease-causing proteins, at Arrakis, for example, we are developing small molecules that act on an entirely new class of targets, RNA molecules, making it possible to prevent disease-causing proteins from being made in the first place. But if BBB is passed in its current form, investors would turn away from such ingenuity just as we’re getting going.

Leading biopharma investors, innovators and patient advocates would support a final bill that further lowers Americans’ out-of-pocket drug costs and ensures that no drugs remain expensive for too long, but we don’t support legislation that would discourage us from using the small-molecule portion of the drug R&D toolkit that we’ve spent decades building. Congress doesn’t need to make this mistake to achieve its goals.

To make drugs affordable for patients, let us lower BBB’s proposed Part D catastrophic cap and eliminate the deductible altogether. To maintain incentives that fuel tomorrow’s drug pipeline, let’s allow up to 14 years before implementing price controls on drugs that lack generic or biosimilar competition — treating small molecules and biologics the same and preserving the economic calculus that drives biomedical progress.

If Congress needs to extract even more from the drug industry to make these fixes, then increase the number of older drugs subject to price controls in 2025. But don’t discourage investment in small-molecule drugs with large, future societal benefits — that path only leads to more injections and greater cost to patients.


Peter Kolchinsky is a father, scientist, investor, teacher and author. He researched HIV at Harvard University, where he earned his Ph.D., and then co-founded RA Capital Management, a Boston-based life-sciences investment firm focused on funding and creating companies developing new medicines. Hearing the stories of how patients couldn’t afford the treatments they needed, he wrote “The Great American Drug Deal,” which makes the case for the reforms that No Patient Left Behind fights for. Peter also actively discusses science and healthcare reform on Twitter @PeterKolchinsky.

Michael Gilman is CEO of Arrakis Therapeutics, a privately held biopharmaceutical company developing small-molecule medicines that act on RNA. He is a serial entrepreneur who has served as CEO of four biotechnology startup companies and as head of discovery research at Biogen. Dr. Gilman earned a PhD in Biochemistry at University of California, Berkeley, and directed a cancer research group at Cold Spring Harbor Laboratory in New York. He can be found on Twitter @michael_gilman.

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