Vital Health Podcast Best-of Edition: Peter Kolchinsky & John LaMattina on the IRA
Aug 6, 2025
Peter Kolchinsky, Managing Partner at RA Capital Management, discusses the long negotiations for drug pricing that stifle early-stage R&D. John LaMattina, former President of Pfizer Global R&D, highlights how the Inflation Reduction Act reshapes pharmaceutical pipelines and investment strategies. They dive into the disparity in price-setting for small versus large molecules, challenges in patient access, and the implications of stricter regulations on innovation. Both guests emphasize the urgent need for reform to maintain balance in affordability and the advancement of medical therapies.
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IRA Alters R&D Investment Timelines
- The IRA sets biologics at 13 years and small molecules at 9 years for market exclusivity, which deeply impacts early-stage R&D investment decisions.
- Nine years is too short for startups to justify investment in small molecules since patent exclusivity is crucial for innovation incentives.
Exclusivity Cuts Slash Drug Value
- Reducing market exclusivity from 15 to 9 years can cut the net present value (NPV) of a drug roughly in half.
- Shorter exclusivity periods reduce potential indication expansions, crippling a drug's commercial and patient impact.
Advocate Insurance Reform Over Price Cuts
- Fix drug affordability by reforming insurance to eliminate out-of-pocket costs for appropriately prescribed treatments.
- Redirect public outrage toward insurance design rather than drug pricing to sustain innovation incentives.
