Food and Drug Administration (FDA) Commissioner Scott Gottlieb recently outlined the two major aims of his agency. Gottlieb wants the FDA to focus on bringing down high drug prices through increased competition, and to make the FDA more transparent. At the “Pro Policy Summit” hosted by Politico, Gottlieb said that the agency is “trying to facilitate competition,” when it comes to the drug market.
High drug prices have been in the news extensively over the past few years. The most visible drug pricing scandal involved the “EpiPen,” the autoinjector device used to treat anaphylactic shock, which results from severe allergic reactions. EpiPens reached $600 for a two pack, up from the $100 for one injector that they cost when EpiPen distributor Mylan acquired the rights in 2007. One reason that Mylan was able to raise the price of the EpiPen so high was because the EpiPen had no real competition for a number of years. One competitor, the Auvi-Q, was recalled in 2015 because of “potential inaccurate dosage delivery.” Another, known as Adrenaclick, has been on the market since 2003 (Adrenaclick also has a generic competitor). However, there are barriers to a serious competitor to the EpiPen. However, FDA regulations restrict pharmacists in 29 states from making recommendations for a generic alternative to what has been prescribed.
Competition can have a tangible impact on generic drug prices. A study published in the Annals of Internal Medicine in July 2017 looked at prescription drug claims from commercial health insurance plans between 2008 and 2013 to examine the relationship between competition and generic drug prices. Researchers identified 1,120 generic drugs, with the following categories of competition: high, duopoly, near-monopoly, and monopoly. The study found that drugs with high levels of competition saw an average decrease in price of 31.7 percent over the period studied. Drugs that were considered a “monopoly,” meanwhile, saw their prices go up by 47.4 percent over the same period. Duopolistic generic drugs saw a price decline of 11.8 percent and near-monopolies experienced 20.1 percent increases in price, according to the study.
The Brookings Institution points out some of the issues that the FDA has had with transparency and rapid action, that may contribute directly to a lack of generic drug competition. A May 2017 Brookings report titled “Enabling Competition in Pharmaceutical Markets” outlined that in 2010, Congress passed a law called the Biologics Price Competition and Innovation Act (BPCIA). This law was meant to encourage competition among biologic drug by giving drugs similar to biologics already on the market (dubbed “biosimilar”) a quicker path to market adoption. However, final guidelines for drugmakers to demonstrate their drugs were in fact biosimilar were not made available until 2015. A draft guidance for showing interchangeability of drugs was not made available until 2017, with final guidance not expected until 2019 – nine years after the passage of the BPCIA law.
The Brookings paper alleged that FDA opaqueness was to blame for a lack of interchangeable drugs: “Due to lack of guidance from the FDA, none of the biosimilars approved thus far have obtained interchangeable status, which would further promote price competition among biologics by allowing for automatic pharmacist substitution toward cheaper biologics.”
There are other examples of the FDA’s lack of transparency, particularly concerning the drug approvals process. At the September 2016 Congressional hearing, “Reviewing the Rising Price of EpiPens,” held by the House Committee on Oversight and Government Reform, Dr. Douglas Throckmorton, the deputy director for regulatory programs at the Center for Drug Evaluation and Research in the FDA, declined to tell lawmakers how many epinephrine auto-injector products currently had pending applications with the FDA.
Slate writer Charles Seife alleged in February 2015 that the FDA concealed evidence of malfeasance in medical trials. An article published on the Regulatory Affairs Professionals Society (RAPS) website in March 2017 stated that the FDA regularly declines to reveal the number of biosimilar applications the agency is reviewing, as well as the details of Complete Response Letters (CRLs) that the FDA sends to drug companies in response to an Abbreviated New Drug Application (ANDA).
The Brookings Institution reported that Gottlieb previously proposed that the FDA could publish a list of the 180 brand-name drugs that no longer have patent protection but don’t yet have any generic competitors, and that the agency would work to get through their backlog of 2,640 generic drug applications within a year.