Incubate Releases Statement on President Trump's Executive Order to Undo the Pill Penalty

WASHINGTON (April 16) -- Yesterday, President Trump issued an executive order calling on Secretary of Health and Human Services Robert F. Kennedy Jr. to work with Congress to "modify the Medicare Price Negotiation Program to align the treatment of small molecule prescription drugs with that of biological products, ending the distortion that undermines relative investment in small molecule prescription drugs."

Incubate executive director John Stanford issued the following statement:

 "While we continue to review President Trump's executive order, we're heartened to see the inclusion of Incubate's top priority: ending the pill penalty. That alone would make a meaningful difference to patients by allowing scientists to pioneer the next generation of breakthrough American medicines based on their medical promise, rather than Washington politics. 

"Companies large and small have turned away from small molecule research and development in light of the pill penalty. This tracks with what we've heard from the venture capital community: a recent Incubate survey found that 87% of investors are less interested in financing small molecule research specifically because of the pill penalty.

"Since the IRA was enacted, at least 49 research programs and 24 drugs have been discontinued. That number is likely an undercount. We look forward to HHS Secretary Kennedy working with lawmakers to advance the bipartisan Ensuring Pathways to Innovative Cures (EPIC) Act, which would undo the pill penalty by granting small molecule drugs and biologics the same 13-year timeline after FDA approval before they're eligible for Medicare price setting. 

"The EPIC Act would ensure investors and companies can direct investment into the most promising treatments based on their scientific potential -- instead of something as arbitrary as their molecular weight."

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About Incubate

Incubate is a 501(c)(4) organization of venture capital firms representing the patient, corporate, and investment communities. Our primary aim is to educate policymakers on the role of venture capital in bringing promising treatments to patients in need.