Study Finds Obstacles to Search for Opioid Substitute

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Inflation Reduction Act price controls on the category of drugs that includes most non-opioid pain relievers reduce return on investment, disincentivize research funding

BOSTON – By reducing return on investment for the category of drugs that includes most potential non-opioid pain relievers, the Inflation Reduction Act (IRA) creates a major disincentive to the development of therapies to combat the opioid epidemic that is ravaging the United States, according to a new study published by Pioneer Institute.

The problem is exacerbated by the fact that pain medication research already has a higher attrition rate than research in other therapies.  A 2023 Biotechnology Industry Organization (BIO) study found that pain projects have only a o.7 percent probability of gaining FDA approval, compared to 6.5 percent across all diseases.

“Most potential replacements for opioid pain relievers are small molecule drugs,” said William Smith, Ph.D., who co-authored “The Left Hand Doesn’t Know What the Right Hand Is Doing: The Federal Government and Opioids” with Robert Popovian.  “By imposing price controls on these therapies four years earlier than on so-called large molecules, or biologics, the IRA makes it very likely that venture funds and biopharmaceutical companies will pull back from small molecule research, including research on potential opioid replacements.”

The IRA provision contradicts years of federal efforts to incentivize development of non-opioid pain relievers, including significant programs created by the Food and Drug Administration (FDA) and National Institutes of Health.  In 2022, Congress passed the NOPAIN Act, which requires Medicare to provide more generous reimbursements for non-opioid pain relievers.

When patient advocate and biotech researcher Dr. Steven J. Potts surveyed 100 venture capital firms that invest in biopharma research after passage of the IRA, he found that 85 percent were “pivoting away from small molecule drug development.”

Pfizer’s oncology pipeline had been only 6 percent biologics.  But Chris Boshoff, the company’s head of oncology, told CNBC he hopes that by 2030 biologics will account for 65 percent of the pipeline, as they offer “more durable revenue potential.”    

The Biotechnology Industry Organization provided Pioneer with a list showing that there are currently just nine small molecule non-opioid pain projects underway that might serve as opioid replacements.  With a 0.7 percent probability of FDA approval, the chances that one of these will succeed are miniscule. 

“If the pipeline for non-opioid pain therapies were robust, strategies like higher reimbursement rates could be effective,” said co-author Robert Popovian.  “But the inability to achieve sufficient return on investment makes the existence of a robust pipeline highly unlikely.”

With opioid overdose deaths rising rapidly, by 2010 efforts were underway to limit the prescribing of opioids, which became more expensive as a result.  At the same time, retail heroin prices began to drop significantly.  By 2016, deaths from fentanyl overdoses surpassed those from both heroin and prescription drugs.

“One of the tragic ironies of the opioid epidemic is that measures taken to limit the prescribing and availability of prescription opioids likely led users to turn to heroin and fentanyl, which are even more dangerous,” said Pioneer Executive Director Jim Stergios.  

All told, opioid overdose deaths have risen from 3,000 in 1999 to more than 80,000 in 2021.   

William S. Smith, Ph.D. is senior fellow & director of Pioneer Life Sciences Initiative. Dr. Smith has 25 years of experience in government and in corporate roles. His career includes senior staff positions for the Republican House leadership on Capitol Hill, the White House Office of National Drug Control Policy, and the Massachusetts Governor’s office where he served under Governors Weld and Cellucci. He spent ten years at Pfizer Inc as Vice President of Public Affairs and Policy where he was responsible for Pfizer’s corporate strategies for the U.S. policy environment. He later served as a consultant to major pharmaceutical, biotechnology and medical device companies. Dr. Smith earned his PhD in political science with distinction at The Catholic University of America.

Robert Popovian, Ph.D. is senior visiting health policy fellow at Pioneer Institute. Dr. Popovian is the Founder of the strategic consulting firm Conquest Advisors. He previously served as Vice President, U.S. Government Relations at Pfizer. Dr. Popovian was appointed as the Chief Science Policy Officer for Global Healthy Living Foundation. He also serves on the Board of Councilors of the University of Southern California School of Pharmacy, Senior Health Policy Fellow at Progressive Policy Institute, and Board of Advisors for Equideum Health. Robert completed his Doctorate in Pharmacy and Master of Science in Pharmaceutical Economics and Policy degrees at the University of Southern California with honors.