April 21, 2025 

The Alliance for Safe Biologic Medicines (ASBM) commends President Donald J. Trump for his leadership in issuing an executive order to address the harmful “pill penalty” contained within the Inflation Reduction Act (IRA). This provision, enacted during the Biden administration, imposes price controls on small-molecule medicines—commonly delivered in pill or tablet form—just nine years after FDA approval, while granting biological medicines a longer 13-year timeline for manufacturers to recoup their research and development cost. 

This disparity disincentivizes investment in the medicines which treat many widespread and serious conditions, including cancer, heart disease, diabetes, and hypertension. Small-molecule drugs account for over 90% of all prescriptions filled in the United States. Yet under the IRA, they are subjected to more aggressive price controls simply because of how they are manufactured. An analysis by the University of Chicago projected the IRA’s pill penalty would lead to the loss of 188 small-molecule therapies and an estimated 116 million life-years. 

Research has shown this shift is already underway– investment in small-molecule drug development has plummeted 68% since the IRA’s passage—and by 74% for therapies aimed at Medicare-aged patients.

By directing the Department of Health and Human Services to work with Congress to restore parity between small-molecule and biologic drugs under the Medicare Drug Price Negotiation Program, President Trump is standing with American patients and protecting American innovation. His executive order, together with the bipartisan Ensuring Pathways to Innovative Cures (EPIC) Act, which eliminates the pill penalty legislatively, offers a critical course correction to protect access to essential medicines for all patients, regardless of how those treatments are delivered.

“Patients battling cancer and other serious illnesses depend on timely access to effective treatments,” said ASBM Executive Director Michael Reilly. “The ‘pill penalty’ has inadvertently discouraged the development of small-molecule drugs that are often the only way to treat certain cancers. President Trump’s executive order is a pivotal step toward restoring balance and prioritizing patient needs in our healthcare system.”

ASBM urges Congress to build on this leadership by swiftly advancing the EPIC Act and ensuring that lifesaving innovation is supported across all classes of medicine—for the benefit of current and future patients alike.

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