LATEST RESEARCH
VT Research Finds a 37% Decline in Small-Molecule Oncology Follow-On Research Following the Inflation Reduction Act
Key Findings
1. Decline in overall follow-on research
The observed number of follow-on studies decreased by approximately 12%, from 610 before the IRA to 535 afterward. Oncology accounted for much of this decline, with the observed number of follow-on cancer studies falling by 20%, from 325 to 260.
2. Significant decline in small-molecule cancer research
The study’s statistical models estimated a 37% decline in the average annual number of small-molecule oncology follow-on studies, from 52 before the IRA to 33 afterward. The analysis also identified a modeled 27% decline in lead-indication small-molecule oncology approvals.
These findings provide evidence that research involving small-molecule cancer medicines may have been particularly affected following the IRA’s introduction.
3. Reduced share of research targeting rare cancers
The proportion of follow-on oncology studies focused on rare diseases, known as orphan indications, declined by 14% after the IRA’s introduction. This finding raises questions about the potential implications for research involving patients with rare cancers and limited treatment options.
4. Different trends in hematology
In contrast to oncology, the study found an increase in follow-on small-molecule hematology studies. However, this increase started from a low baseline, and the overall findings for hematology differed from those for oncology.
MORE RESEARCH
Antimicrobial Resistance (AMR) Project
- Antimicrobial resistance (AMR) increases healthcare costs, hospital stays, and readmission rates, creating a growing economic burden on the U.S. healthcare system.
- Based on a cohort of 50,189 patients, with 13% experiencing AMR infections, the following impacts were observed:
- An additional 4 days of hospitalization per AMR infection.
- An additional $21,453 in direct medical costs per AMR infection.
- A 28% hospital readmission rate for AMR patients, compared to 21% for non-AMR patients.
- AMR is estimated to cost the U.S. $31 billion annually in 2025, increasing to $52 billion by 2045.
- The projected 20-year economic burden of AMR in the U.S. is $655 billion in net present value.
PREPRINT NEW RESEARCH: The Inflation Reduction Act’s Impact Upon Late-Stage R&D
Vital Transformation is preparing a new analysis with a total of 1148 secondary trials from 364 FDA-approved medicines, published from 2018 to 2025, obtained from Biomedtracker and clinicaltrials.gov. Using fractional multinomial logit, we model the share distribution of secondary indication studies across 19 disease groups and assess the change in this distribution post-IRA. We also assessed the number of secondary treatment studies pre- vs. post-IRA using multiple linear regression.
PREPRINT NEW RESEARCH: The Impact of MFN on Oncology and Hematology Treatments
Vital Transformation is preparing a new analysis about the potential implications of Most Favored Nation (MFN) drug pricing policies for the U.S. oncology ecosystem, focusing on how international reference pricing could reshape provider economics, patient access, and innovation incentives. The analysis models the effect of benchmarking U.S. prices for cancer medicines against lower prices in selected peer countries and estimates substantial reimbursement reductions across multiple therapies.
Most Favored Nation (MFN) Reference Pricing in Medicare: Impacts on jobs, innovation, and state budgets
- The Most Favored Nation (MFN) policy uses the lowest international adjusted price for medicines across a select basket of countries to set drug prices in the U.S. market (the “MFN Price”).
- Assuming the top 50 drugs by spending in each of Medicare Parts B and D are impacted by an 85% gross price reduction due to MFN, which would also then spillover into Medicaid, 340B, and hospital ASP’s, we would expect to see the following impacts between 2025 - 2034:
- A loss of 1.98 to 2.22 million jobs, representing 40% of current U.S. jobs in the biopharmaceutical industry, with 472,000 being employed directly and 1.7 million being employed indirectly.
- The largest job losses would occur in California, Florida, Texas, and New York.
- A loss of $600 billion in federal tax revenue and over $450 billion state tax revenue.
- A loss of up to $2.4 trillion in earnings generated by the biopharma sector.
- Spillover impacts of MFN into Medicaid, 340B and ASP +6 payments represent more than 600,000 of the total jobs lost.
- A sensitivity analysis restricting the impacts of MFN to roughly half of the net price reduction was also calculated finding the loss of nearly 1.03 million jobs, assuming spillover effects.
- MFN will lead to an annual reduction in ASP payments to hospitals from $2 billion to $700 million; losses of this size would lead to the closure of many community and rural treatment centers.
- With an 85% reduction in the gross U.S. prices due to MFN, we would also expect to see the following reductions in U.S. Biopharma Key Performance Indicators:
- The disappearance of nearly all VC funding for early and late-stage companies.
- A 48% reduction in authorized biopharma patents.
- MFN will increase the risks to U.S. economic security by incentivizing the competitiveness and growth of China’s biopharma sector.