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September 2 2016

Why the FDA Needs a Dose of Common Sense

Patrice L. Onwuka

Congress didn’t waste time in slamming Mylan, the pharmaceutical company that makes the EpiPen, following the recent firestorm over the spiking cost of this product. But while they come down hard on Mylan, they allow the Food and Drug Administration (FDA) to skate by almost scotch-free when the FDA is as much – if not more- to blame.

A gang of 19 progressive senators (and independent Senator Bernie Sanders) sent a letter to Heather Bresch, CEO of Mylan, blasting her company for the sky-high prices of EpiPen and feigning concern over a lack of competition. They call Mylan’s discount program to help those who can’t afford the retail prices, a joke:

Mylan’s near monopoly on the epinephrine auto-injector has allowed you to increase prices well beyond those that are justified by any increase in the cost of manufacturing EpiPen.

Your company has responded to concern about the high cost of the EpiPen by arguing that its three EpiPen accessibility programs ensure consumer access to the product, despite the high cost.

Your discount programs, however, represent a well-defined industry tactic to keep costs high through a complex shell game.

They contend that Mylan’s discount programs still leave insurance companies, government, and employers bearing “the burden of these excessive prices” because higher costs are passed on to consumers through higher premiums.

Isn’t this the kettle calling the pot black? This sounds a lot like what happened because of ObamaCare.

Where is their ire though for the reasons Mylan developed a monopoly that allows it to charge what it does? As we reported, Mylan worked with Congress and the Obama Administration to create a program to channel EpiPen in schools and the incentives for only using EpiPens there. The demand and supply for EpiPens starts and ends with government working with big business (i.e. cronyism).

And where is their ire against the FDA’s slowness to approve alternatives? A few of their Republican colleagues in House sent a letter to the FDA asking where in the application process competitors to EpiPen are and whether they would be prioritized.

Congress knows quite well that the delays in getting alternatives approved is why there is no competition to keep prices from rising and to even drive them lower.

Apparently, some 4,036 generic drug applications are waiting for the FDA to approve them. The median approval time is 47 months! Four years a lot of time for a family to struggle with buying a pricey medication that lacks a generic version and sadly, more than enough time for a patient to expire as they await a more reasonably priced medicine to help their condition.

The FDA has a severe backlog in approving generic medicines according to NPR:

The FDA's generic backlog isn't a new problem. In 2012, it was so large that it prompted the government to start charging user fees to generic manufacturers to provide the funds for the FDA to speed the process. The fees built on the 20-year-old Prescription Drug User Fee Act, which required brand-name drugmakers to pay fees to expand FDA's capacity to review applications for those medicines. In the first three years, the FDA collected $1 billion from generic drug manufacturers.

The fees were used to hire an additional 1,000 employees, and put the Office of Generic Drugs on par with the Office of New Drugs by reorganizing it and moving it from four outlying buildings to the FDA's main campus in Silver Spring, Md.

Only 1,551 generics have been approved since the fees on drugmakers were initiated, and that total includes some extra applications that weren't considered part of the official backlog. So, all told, the agency has only approved about half of the backlogged generics that were awaiting approval in 2012.

In addition, the inability for international drug options limits competition. The European Medicines Agency (aka Europe’s FDA) is able to approve generic drugs in about a year on average. They have generic alternatives to the EpiPen for $34-$67. Why can’t we gain access to them?

As a Wall Street Journal piece the “Cure for Swelling Drug Prices” explains, the FDA approvals process and we can guess how they feel about it:

Indeed, the Generic Pharmaceutical Association and its European equivalent, Medicines for Europe, have proposed a “single development pathway” under which approval in one jurisdiction would automatically confer approval in the other.

The FDA has long insisted, for safety reasons, that it approve all drugs regardless of whether they have been approved overseas. But if the FDA was once a better regulator than its overseas peers, it isn’t now. Ken Kaitin, a professor of medicine at Tufts University who has studied drug regulation around the world, says there is “absolutely no evidence” the U.S. drug supply is safer than in Britain, Canada or Europe.

Thus, the FDA wouldn’t be compromising safety by harmonizing its approvals with foreign regulators. Indeed, by making more drugs available at lower cost, it could ultimately make Americans healthier.

As the initial anger subsides, reason and common sense are beginning to prevail – even if not among some on Capitol Hill. Those on the right and left are beginning to see that Mylan is able to maximize profit because of a lack of competition.

In a freely competitive system, even if Mylan was first to the market and charged what they felt consumers would pay, the high profits would be attractive to new competitors with their own similar products – both here and overseas. New choices would drive Mylan to become more competitive on price. In addition, if Washington had not set up a program to get -almost exclusively- EpiPens in schools, they wouldn’t have such demand for their product only.

We don’t have a freely competitive market precisely because of government regulations and cronyism.

Regular Americans are the ones who are hurt – suffering with higher costs that add more pressure on family budgets for medicines that they need.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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