Tests include some drugs that predate the agency itself, and prices skyrocket as a result
In an October 2015 article Bloomberg Business explores the controversy arising from the U.S. Food and Drug Administration’s plan encouraging testing of medicines that have been in wide use for many decades and thus have never gotten formal approval.
“Companies that do the tests are rewarded with licenses that can temporarily give them monopoly pricing power as most rivals are eased or kicked off the market,” according to the Bloomberg piece. A perhaps unintended consequence—but one that could have been foreseen by the FDA—has been a surge in the costs of drugs used in a wide variety of treatments.
Critics say the FDA plan lets entrepreneurs make huge profits on drugs that have never presented much safety or efficacy concern. Even presidential candidate Hillary Clinton weighed in on the issue, promising to address the “price gouging” if elected.
The Bloomberg article points out that, while mammoth drugmakers such as Asia’s Takeda Pharmaceutical Corp. cash in, “patients and hospitals are feeling the pinch.” In many cases, the program “almost had the opposite effect as intended,” said Joseph Biskupiak, a professor at the University of Utah College of Pharmacy. “The only drugs that got studied are the ones that don’t have a problem.”
Michael Levy, deputy director in the compliance office of the FDA’s drug evaluation unit, meanwhile, maintains the exact opposite is true. He told Bloomberg that the program “has been a success,” and that it has removed dangerous drugs from the market.
The FDA argues that they are striving to ensure these older drugs are up to modern safety standards, while it acknowledges that approving branded versions of old generic drugs may make them more expensive. An agency spokesman added that the “FDA does not regulate according to economic factors, nor do we have control over drug pricing.” This “It’s not my department” disclaimer would be easier to swallow, of course, if the department in question did not employ nearly 15,000 federal workers.
A price survey of more than 21,000 generic drugs for Bloomberg News by DRX, a unit of Connecture Inc. that tracks drug prices, found that more than 3,500 have doubled or more since late 2007, ranging from basic chemotherapy medicines to old antibiotics.
The news website also quotes the director of the critical care and surgical pharmacy at Johns Hopkins Hospital, who said in many cases there are no obvious benefits to offset the higher prices. “We’re not paying for innovation, we’re not paying for fewer side effects, and we’re not paying for better care,” he said. “We’re paying for somebody’s business model to make a profit.”
Bloomberg Business cites Takeda’s acquisition of an FDA license for the gout remedy colchicine as an example. The drug—so old that the ancient Greeks knew about its effects—used to cost about 25 cents per pill in the U.S. Then in 2010 its price suddenly jumped to five dollars per pill, a 2,000 percent increase.