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  • Writer's pictureShannon Lantzy

The complexities of US drug pricing and why I’m glad FDA stays out of it

The Inflation Reduction Act (IRA) changed the length of time a drug maker can enjoy exclusive marketing rights to a small molecule (e.g., most pills) versus a large molecule (i.e., biologics, like gene therapies). This change is cooling venture capital funding of small molecule drug development. Of course, the small molecule drug developers claim this will result in a net negative by disincentivizing R&D, while the biologics developers are probably excited. As a citizen, patient, and n of one, I can’t predict the outcomes of the IRA.*

Drug pricing is worthy of debate, study, mathematical proofs, and impassioned pleas. We need new policies. Many people suffer due to a lack of ability to afford the drugs that would significantly improve their lives. We need new pricing models, and a better system of payment to distribute cures and aids to people who need them.

And yet, I have repeatedly declined to enter into this debate. I do not and have not worked on drug or medical device pricing and payment reform (yet - I never say never). I have kept my career on the side of processes and policies of evaluating the benefits and risks of medical therapies.

The Food and Drug Administration (FDA) has stayed out of pricing, too, by design. FDA has no authority or purview over drug pricing. FDA reviews for safety and effectiveness, which is hard enough without trying to estimate dollar-based value. As a citizen, I am very glad that FDA is independent.

~Shannon, the Optimistic Optimizer

*If I wanted to try to model the outcomes of the IRA, I would start a thought experiment by modeling the outcomes in three dimensions (i.e., positive/negative, unintended/intended, patients/businesses).


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