Writing in The Hill, Mercatus Senior Research Scholar Robert Graboyes discussed ways to boost the U.S. Food and Drug Administration’s productivity. He and coauthor Jordan Reimschisel discussed seven things the FDA could do to speed approval of drugs and medical devices.
The Food and Drug Administration has reported it approved only 19 innovative new medicines last year, versus 51 in 2015. To be sure, 2015 was a high-water mark. Nevertheless, such a dramatic drop signals a problem for patients eager for new treatments. These new drugs, though few, represent advances in the treatment of ovarian cancer, Hepatitis C, and multiple sclerosis, among other diseases.
The FDA excuses itself for the slowdown, claiming it is receiving fewer applications from drug makers. However, this is symptomatic of a vicious circle. The regulatory burden of approval has increased so much, it is contributing to a significant reduction in the rate of return on capital invested in pharmaceutical development. According to new research by Deloitte, the rate of return has collapsed from 10.1 percent in 2010 to 3.7 percent last year.
Would a starting salary of over $160,000 turn you off? Well, maybe if you had a scientific PhD and had to wait four months before the employer could decide whether to hire you or not, you would find a spot elsewhere.
This is the situation the Food and Drug Administration finds itself in, according to the Washington Post:
The Food and Drug Administration has more than 700 job vacancies in its division that approves new drugs, and top officials say the agency is struggling to hire and retain staff because pharmaceutical companies lure them away.
“They can pay them roughly twice as much as we can,” Janet Woodcock, who directs the FDA’s Center for Drug Evaluation and Research (CDER), said at a rare-diseases summit recently in Arlington, Va.
(Sidney Lupkin & Sarah Jane Tribble, “Despite ramped-up hiring, FDA continues to grapple with hundreds of vacancies,” Washington Post, November 1, 2016.)
A response to expensive patented medicines is generic competitors. The U.S. has struck a pretty good balance between innovation and low prices through the Hatch-Waxman (1984) Act, which specified patent terms for newly invented medicines, and a pathway for generic competitors to enter the market after a period.
One obstacle to generic entry in recent years was a very slow approval process at the Food and Drug Administration. This led to a backlog, which was unexpected because one important benefit of Hatch-Waxman was that generic competitors did not have to replicate the expensive clinical trials innovative drug-makers had to carry out to receive the FDA’s approval.
The FDA’s Office of Generic Drugs (OGD) considers approving generic copies of drugs upon receipt of an Abbreviated New Drug Application (ANDA) from the manufacturer. The system changed under a law passed in 2012, the Generic Drug User Fee Act (GDUFA). Recent data show improvement:
The Goldwater Institute has had great success getting states to pass “Right to Try” laws. Right to Try allows a desperately sick patient to take an experimental new medicine before the FDA has approved it.
Since I last wrote about this policy in November 2014, 31 states have passed Right to Try. Further, U.S. Senator Ron Johnson (R-WI) has tried to get a federal Right to Try law through the U.S. Senate.
However, there has been push-back. According to Allison Bateman-House of NYU Langone Medical Center, “there is no confirmed instance of anyone getting a drug through Right to Try.” Jonathan Friedlaender, a survivor of advanced metastatic melanoma, has written a compelling essay in Health Affairs, which concludes Johnson’s proposed federal law would not improve access to experimental medicines.
Doctors Examining X-Rays ca. 1980s-1990s
(A version of this Health Alert was published by Forbes.)
In July, the Food and Drug Administration issued guidance on three topics important to the future of medical innovation. These welcome guidelines demonstrate the FDA is doing the best it can to ensure it does not interfere inappropriately with advances in medical technology that rely on processing information.
However, the guidelines also show the FDA will be limited in its ability to respond effectively to future innovations. Current law does not really define the FDA’s powers to regulate devices that depend on advances in artificial intelligence and machine learning, as applied to health care. Guidelines give medical entrepreneurs some comfort the FDA will not impose an undue regulatory burden on them, but they are no substitute for legislation precisely defining the FDA’s powers in the digital age.
Fortunately, new legislation that moves in the right direction – the 21st Century Cures Act – has passed the House of Representatives and will hopefully finish its passage through the Senate quickly enough that reconciliation between the two chambers can take place, and a good bill will pass before the 114th Congress adjourns.
The Trans-Pacific Partnership (TPP) trade agreement is in deep trouble. It has taken nine years to finalize this extremely important multilateral deal among the United States and 11 other countries committed to overcoming domestic political obstacles to expand the benefits of free trade.
The final text was released publicly November 5, 2015, starting a legally required 90-day countdown before the president could sign it. This waiting period ended with the U.S. delegation joining representatives of the other countries in New Zealand on February 4 to ink the deal.
The deal had bipartisan (but not unanimous) support in Congress. Unfortunately, President Obama did not insist on adequate protection of intellectual property in biologic medicines, alienating Congressional allies and likely dooming the deal to failure, according to an analysis published today by NCPA.
Read the two-page Brief Analysis here.
Senators Ted Cruz (R-TX) and Mike Lee (R-UT) recently introduced the RESULT Act, which would allow drugs and medical devices approved in certain other countries to be allowed in the U.S. as well. The countries included are European Union members, Israel, Canada, Japan, and Australia.
The benefits of this act would be significant. Professor Daniel Klein of the Mercatus Institute at George Mason University and Professor William L. Davis of the University of Tennessee at Martin have surveyed economists on this policy, and a majority agree it would improve patients’ access to safe and effective drugs.
(A version of this Health Alert was published by The Hill.)
By avoiding sound bites and respecting voters’ ability to understand issues, Governor Jeb Bush’s health-reform proposal demonstrates strong leadership. Repeal and replace Obamacare? Sure, Bush is for that, but no Republican politician should win points simply by regurgitating what many citizens fear has become little more than a slogan.
(A version of this Health Alert was published by the Washington Examiner.)
With perfect timing, Hillary Clinton’s presidential campaign announced a proposal to impose federal price controls on prescription drugs the day after Turing Pharmaceuticals declared it was raising the price of Daraprim, a medicine to combat the “toxoplasmosis” parasite, from $13.50 to $750 per pill.
