Tag: "FDA"

What’s Wrong with the Market for Asthma Drugs?

The problem:

Pulmicort, a steroid inhaler, generally retails for over $175 in the United States, while pharmacists in Britain buy the identical product for about $20 and dispense it free of charge to asthma patients. Albuterol, one of the oldest asthma medicines, typically costs $50 to $100 per inhaler in the United States, but it was less than $15 a decade ago, before it was repatented…

Rhinocort Aqua, a prescription drug that [sells] for more than $250 a month in Oakland pharmacies last year but costs under $7 in Europe, where it is available over the counter.

The role of government:

[T]here are no generic asthma inhalers available in the United States. But they are available in Europe, where health regulators have been more flexible about mixing drugs and devices and where courts have been quicker to overturn drug-patent protection.

“The high prices in the U.S. are because the F.D.A. has set the bar so high that there is no clear pathway for generics,” said Lisa Urquhart of EvaluatePharma, a consulting firm based in London that provides drug and biotech analysis. “I’m sure the brands are thrilled.”

Source: The New York Times.

Oct 15, 2013 | 15 comments | by John Goodman

Drug Shortages Have Gotten Worse

[T]he FDA’s new powers have not relieved cancer patients from these shortages of necessary medicines. In 2012 and 2013, the number of drugs in short supply has hovered around 300, a deterioration of about 20 percent…

The federal government established 340B in 1992 as a way to reduce prices of drugs for inner-city hospitals that serve a disproportionate volume of indigent patients.

Eligible hospitals enjoy a government-dictated discount of 25 percent to 50 percent off the regular price. As described by Forbes contributor Scott Gottlieb, MD, of the American Enterprise Institute, one third of the nation’s hospitals now profit from the scheme, including rich ones like Cedars-Sinai in Los Angeles and Duke University in North Carolina.

Further, according to Dr. Gottlieb, hospitals do not pass this windfall on to patients or the government. Rather, they use the excess profits to acquire oncology practices. As a result, there has been a dramatic increase in the proportion of chemotherapy administered in hospitals rather than more convenient and less expensive oncologists’ offices.

Source: John Graham.

Sep 04, 2013 | 15 comments | by John Goodman

Why Aren’t There More Cancer Vaccines?

Because of the way drug patents work:

The duration of patent protection in the U.S. is 20 years. All drug innovations get patented at the time of discovery, but late-stage cancer treatments will work their way through the clinical trials required for FDA approval much more quickly, since the effect on patient survival will be apparent within a couple of years. That means fewer years of the patent clock ticking without revenues coming in. For a preventive treatment like the HPV vaccine, the 20 years of patent protection will be long expired before any clinical trial can show whether lives are being saved, which in turn makes vaccines far less alluring investments for biotech companies. It’s yet another indication of America’s patent system’s desperate need for a makeover…

Generally, to get approval for a new cancer drug you need to show that patients live longer. It doesn’t take long to determine whether a new treatment adds months of life in the case of metastatic cancers (those that have spread throughout the body): 90 percent of patients with such cancers are dead in less than five years. But it can take more than a decade to see whether survival is affected for localized cancers that remain confined to a single organ. And for treatments aimed at cancer prevention — the holy grail of cancer research — it could take multiple decades to prove a treatment’s efficacy.

Full Ray Fisman post worth reading.

Aug 28, 2013 | 14 comments | by John Goodman

The FDA Cannot Handle Personalized Medicine

The current regime was built during a time of pervasive ignorance when the best we could do was throw a drug and a placebo against a randomized population and then count noses. Randomized controlled trials are critical, of course, but in a world of limited resources they fail when confronted by the curse of dimensionality. Patients are heterogeneous and so are diseases. Each patient is a unique, dynamic system and at the molecular level diseases are heterogeneous even when symptoms are not. In just the last few years we have expanded breast cancer into first four and now ten different types of cancer and the subdivision is likely to continue as knowledge expands. Match heterogeneous patients against heterogeneous diseases and the result is a high dimension system that cannot be well navigated with expensive, randomized controlled trials. As a result, the FDA ends up throwing out many drugs that could do good.

Alex Tabarrok on Peter Huber. See our previous posts on personalized medicine here and here.

Jun 12, 2013 | 11 comments | by John Goodman

Why Don’t We Have Drug Approval Reciprocity?

If the United States and, say, Great Britain had drug-approval reciprocity, then drugs approved in Britain would gain immediate approval in the United States, and drugs approved in the United States would gain immediate approval in Great Britain. Some countries such as Australia and New Zealand already take into account U.S. approvals when making their own approval decisions. The U.S. government should establish reciprocity with countries that have a proven record of approving safe drugs — including most west European countries, Canada, Japan, and Australia. Such an arrangement would reduce delay and eliminate duplication and wasted resources. By relieving itself of having to review drugs already approved in partner countries, the FDA could review and investigate NDAs more quickly and thoroughly.

Dan Klein and Alex Tabarrok here and more here.

Jun 05, 2013 | 15 comments | by John Goodman

How Medicare Wastes Money

Genentech…makes an anti-cancer drug called Avastin. It also makes Lucentis, a closely related drug that is used to treat macular degeneration. Both drugs work equally well for macular degeneration, but Lucentis, which is FDA approved for this condition, costs $2,000 a dose compared with $50 for the same amount of Avastin. The FDA can’t approve Avastin for macular degeneration unless the company requests it, and Genentech has no financial interest in doing so. This leaves Medicare with no choice but to pay top dollar for Lucentis. Other than to save their patients money, doctors have no incentive to prescribe Avastin, even though they can do so “off label.” The difference in price costs Medicare, and taxpayers, hundreds of millions of dollars a year.

And because Medicare beneficiaries must absorb one-fifth of the cost of each treatment, Lucentis costs the patient $400 a dose, compared with $11 for Avastin. Medicare can do nothing about it…

Medicare can’t require proof that an expensive new product is any better than the one it’s replacing; it’s explicitly prevented from doing so by law. Medicare can’t even encourage patients and doctors to select a less-expensive option that works just as well. With few exceptions, neither CMS nor the Food and Drug Administration can take a new product’s price or its performance into consideration when making coverage decisions. And once Medicare starts writing checks, private health plans generally fall into line.

Why Cancer Care Costs So Much

Oncologists typically make more money if they use newly approved drugs and the latest radiation treatments than if they use cheaper, older alternatives that work just as well. (This is because they get paid back the cost of the drug, in addition to an extra 6 percent of that cost — the more expensive the drug, the higher the compensation.)

Some of these new therapies are rightly heralded as substantial advances, but others provide only marginal benefit. Of the 13 anticancer drugs the Food and Drug Administration approved in 2012, only one may extend life by more than a median of six months. Two extended life for only four to six weeks. All cost more than $5,900 per month of treatment.

Source: The New York Times.

Apr 04, 2013 | 11 comments | by John Goodman

Pay for Delay

The big pharmaceutical with a blockbuster drug gets to have the only product on the market for a little longer. It also doesn’t have to deal with price competition. The FDA estimates generics usually cost 80 to 85 percent less than brand-name drugs — not great news for the maker of the brand-name medication.

As for the generic drug maker, it has to hold off on coming into a given market — but it also gets a settlement from a pharmaceutical, often in the millions. Not a shabby deal either.

The Federal Trade Commission, which brought the suit, has a completely different take. It argues that this is horrible for consumers, who end up with higher drug prices as generics stay off the market longer than they otherwise would. With more than a dozen pay-for-delay deals struck annually, the FTC estimates that these settlements will cost consumers $35 billion.