The CEOs of Amgen and Genentech—Robert Bradway and Alexander Hardy, respectively—blasted the Inflation Reduction Act as a drag on biotech innovation. Their comments came during a CEO fireside chat to close the first day of the 7th Stanford Drug Discovery Symposium (SDDS), moderated by Lloyd Minor, MD, dean at Stanford School of Medicine.

Bradway and Hardy were joined on the panel by Michelle McMurry-Heath, MD, PhD, former president and CEO of the Biotechnology Innovation Organization (BIO). All agreed that the legislation is going to be particularly disadvantageous to some patients most in need of innovation.

Amgen’s Bradway argued that the Inflation Reduction Act (to lower prescription drug cost and prevent increases in drug prices from surpassing inflation) will reduce the level of innovation in the industry in the United States, derisively labeling it the “Innovation Reduction Act” before diving into how it affects drug development in cancer.

“The legislation completely undermines the way in which cancer drug development is done in this country, particularly by stripping molecules of the period of patent protection during which ongoing R&D can be done to try to advance new medicines to earlier and earlier lines of patients, therefore advance to reach more and more patients who might benefit from that innovation,” Bradway said.

Bradway believes that these effects will reverberate throughout the industry and for patients over the next 10–20 years. “From the perspective of the industry, it’s very unfortunate,” he said. “It does very little to address the affordability issue in this country for patients and to help patients get the benefit of the rebates.” Bradway believes the legislation was a missed chance to address the issues of access to and the price of new drugs.

Genentech’s Hardy harped on the issue of patent protection and singled out the discrepancy in the time allotted—nine years for small molecules, 13 years for large molecules—as nonsensical.

“There are many important small molecule therapeutics, particularly in cancer, and nine years isn’t enough for the amount of time it takes to get from a metastatic setting into the curative setting,” said Hardy. As an example, he cited Genentech’s Rituximab, which was first approved in 1997. “We were still doing studies and getting FDA approvals 21 years later in rare immunological disorders, and we’ve got to make sure that there are incentives.”

Hardy echoed the need for drug pricing reform. “We need to get [regulators] to recognize that not all drugs are the same,” he said. “There are some drugs that have unique contributions in terms of unmet need and the clinical difference they make. [Regulators need to] take into account the R&D lifecycle of medicines, which are a part of discovering the true value of those drugs for society.”

McMurry-Heath, who didn’t reveal what she’s been up to since departing from BIO, said that the legislation’s likely impact on drug pricing will have a devastating impact on health disparities. “It’s the drugs that cost the most in total to Medicare that make it across the negotiation hurdle,” she said. “That sweeps up oncology drugs that have a high cost individually, but it also means that drugs to treat stroke and diabetes drugs that almost every Medicare patient may need or want can also go over that line. So, the incentive to work in those areas is going to get further reduced.”

Invoking another piece of legislation, McMurry-Heath said that the Orphan Drug Act and breakthrough designation and accelerated approval have really given an advantage to diseases that target small patient populations with first-in-class treatments.

“That means incremental improvement in diabetes, hypertension, and stroke fall below that cutoff and so [these conditions] don’t get the special attention from regulators and payers that we really need them to have if we’re going to have an impact on healthcare disparities,” said McMurry-Heath. “The Inflation Reduction Act is just going to exacerbate that.”

Stressing diversity

The panel also took a dim view of legislation on clinical diversity. At Genentech, Hardy said his teams are required to have inclusive research plans on every molecule from R&D onwards. Bradway pointed to Amgen’s recent announcement on their collaboration with Nashville Biosciences. “We will sequence [the genomes of] 35,000 African Americans, which should be the largest study that’s typed on people of African ancestry, to try and understand that the level of research at the level of the origin of disease—whether we can find any variations there that help explain disease in that population,” said Bradway.

While McMurry-Heath believes that innovators will develop clinical diversity plans, it is just a baby step in the right direction. “One of the pushbacks we got in trying to strengthen those types of provisions is that we don’t even know the incidence level in many diseases,” said McMurry-Heath. “The CDC doesn’t capture the epidemiological incidence data by and many of the diseases that FDA has to consider.”

For McMurry-Heath, clinical diversity could benefit from putting in places incentives for that work. “We have breakthrough designations and patent protections and all sorts of tools and armament to spur people to do something that might be on the surface against their business interests and their responsibilities to their shareholders and employees,” she said. “Once we do that, it levels the playing field and makes it easier for all of the companies to do what they’re already striving to do.”

All in on AI

By contrast, the panel rallied enthusiastically in favor of the role of artificial intelligence (AI) in drug discovery. Hardy said AI is transforming Genentech’s R&D activities. “We’re at 300 computational scientists at Genentech in a research organization of 2,400—it’s a very large proportion of our workforce that’s comparable in size to our teams of organic chemists,” he said. “We see this as unlocking tremendous amounts of innovation in the future, and we are just starting to realize new types of partnerships that we can have to take advantage of this.”

Amgen’s Bradway sang a similar tune. “The protein folding work, starting with AlphaFold in 2021, was a really big moment for us as an organization and has already led to a number of exciting insights that otherwise might have taken a lot longer,” said Bradway. “In the last few weeks, we’re beginning to recognize how large language models can help us be more productive efficiently.”

McMurry-Heath focused on AI’s role in improving precision in patient selection in clinical trials. “AI is going to help us with one of our biggest barriers—cost,” she said. “AI is going to shrink clinical trials, allowing us to really pinpoint which patients are needed to prove the new drug or compound is safe and effective and hopefully cut out a lot of the noise. I’ve met CEOs that say 90% of their costs and time going to market is clinical trials. Clinical trials are not without risk to the patients involved, whether they’re in a placebo arm or the treatment.

“Whatever knowledge we can use to make sure that we are only testing the smallest number of patients needed to get an answer that’s reproducible and reliable, [that’s what] we should be striving for.”

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