The Inflation Reduction Act and Drug Development: Potential Early Signals of Impact on Post-Approval Clinical Trials

Abstract

Background: The Inflation Reduction Act’s (IRA) Drug Price Negotiation Program (DPNP) may reduce incentives for industry investments in post-approval clinical development. We aimed to explore the IRA’s impact on the initiation of industry-sponsored, post-approval clinical trials. Methods: Using Citeline’s Trialtrove database (7/2014–8/2024), we conducted an interrupted time series analysis (ITSA) to estimate the IRA’s impact on the initiation of industry-sponsored Phase I-III trials in previously approved drugs, excluding all vaccines and COVID-19 treatments. We conducted an additional ITSA to examine post-IRA changes in government-funded trials, hypothesized to be unaffected by the IRA, and sensitivity analyses to explore potential exogenous confounding factors. Finally, we explored differences in the IRA’s impact on post-approval industry-sponsored clinical trial initiation in small versus large molecule drugs. Results: Following the IRA’s passage, the average monthly number of industry-sponsored trials on post-approval drugs decreased by 38.4%. The ITSA indicated that the IRA’s passage was associated with an immediate drop of 11.1 industry-sponsored trials (p-value < 0.05) and an additional decrease by 0.9 trials per month (p-value < 0.01). The IRA’s passage was not statistically associated with changes in government-funded trial initiation. Sensitivity analyses supported ITSA findings. Initiation of post-approval industry-sponsored trials decreased by 47.3% and 32.9% for small and large molecule drugs, respectively. Conclusions: The IRA’s passage was associated with reductions in industry-sponsored, but not government-funded, post-approval trials, with larger reductions for small molecule drugs. These findings provide early evidence supporting concerns around IRA-related reductions in incentives for post-approval clinical development.