The Inflation Reduction Act's Impact Upon Late-Stage R&D

Background: The impact of the Inflation Reduction Act (IRA) upon late-stage developments has been assumed to be limited. The Congressional Budget Office's IRA analysis excluded post-approval innovation, potentially overlooking substantial economic risks to drug developers and declines in the availability of treatments in areas of high unmet medical need such as oncology. Methods: A total of 1148 secondary trials from 364 FDA-approved medicines, published from 2018 to 2025, were obtained from Biomedtracker and clinicaltrials.gov. Using fractional multinomial logit, we model the share distribution of secondary indication studies across 19 disease groups and assess the change in this distribution post-IRA. We also assessed the number of secondary treatment studies pre- vs. post-IRA using multiple linear regression. Results: After the IRA's introduction, small molecule follow-on studies in oncology exhibited a statistically significant 35% decline (R2 = .48, p < 0.014) and lead indication small molecule oncology approvals exhibited a statistically significant 27% decline (R2 = .70, p < 0.002). We also find a statistically significant 14% decline in the share of orphan oncology studies pre- vs. post-IRA (p<0.001). Research Conclusions: This study's results refute claims that the IRA would have minimal negative effects on patient access or late-stage biopharmaceutical R&D. We hope this study reinvigorates debate about the law's unintended consequences and encourages thoughtful policy solutions, as the IRA manifestly creates disincentives that negatively impact patients seeking needed new medicines, particularly those requiring cures addressing metastatic late-stage cancers.