The government does a lot of things that we approve and disapprove of, but the FDA is not responsible for high drug prices.
Not that drug companies don’t charge more so they can recoup the costs of proving a drug safe and effective. Or that some don’t believe that a medication should be made available after it’s been shown to cause a lab test—a “marker” of disease–to improve. Not that U.S. President Donald Trump’s didn’t “vow to roll back government regulations at least 75%” (Reuters March 13, 2017)
If the critics were correct, if it once took too long for new drugs to be evaluated and approved, that’s no longer the case. If anything, the FDA is tilted in the other direction. Drugs are often approved when their long term effect won’t be known for years. Cancer drugs that may or may not make people live longer are marketed. There’s a mechanism that allows physicians to legally use an experimental medication. Called the IND, it started in 1987. If a therapy is needed urgently and a manufacturer has an experimental product that might help, a doctor can apply. Over 100,000 IND’s have been granted.
The TV is full of ads for diabetic drugs that lower the A1C. That’s a marker for how good a person’s average blood sugar is. Tight control may or may not lead to a better outcome. In a study of the frail elderly, an emphasis on lowering the blood sugar led to more deaths. Hypoglycemia, a blood sugar that’s very low, can cause irrational behavior, falls, and even death. N Engl J Med June 12, 2008; 358:2545-2559
The FDA protects us from harm and misrepresentation. That’s what they’re there for. And they like to illustrate how important this can be by retelling the story of Thalidomide.
When it was introduced in 1958, thalidomide was hailed as the tranquilizer of the future. It put you to sleep without the expectation of a hangover, could be used for “over tired” children, and wasn’t fatal, even in a massive overdose. Chemie-Gruenenthal, the manufacturer quickly found acceptance for its product thorough out the world. Three countries held out against approval: France cited “technical reasons”; Israel kept delaying without giving a reason. And in the United States there was Dr Frances O. Kelsey.
The FDA at that time was required to pass on a drug within 60 days or it would automatically be approved. By chance, a new medical officer, Dr. Kelsey was assigned to the thalidomide case. It would be marketed by Merrell under the name Kevadon. As the sixty-day period came up Dr. Kelsey routinely rejected Merrell’s application as “incomplete. She had suspicions. A side effect, tingling of the nerves, brought back memories of research she had done 15 years earlier when neuritis of this kind in pregnant animals was often accompanied by an unusual result when they gave birth: the newborn was deformed. Yet the German company’s tests on experimental animals showed nothing of the kind.
Within a year of the introduction of Thalidomide a very rare deformity in newborn babies began to appear in Germany. It was called phycomelia. In the place of arms and legs babies were born with something like fins. From 12 cases in 1959 the number grew to 83 in 1960 and 302 in 1961. Near the end of 1961 a Hamburg pediatrician made a statistical connection between this ominous health problem and mothers who had taken Thalidomide while pregnant. The manufacturer was sufficiently concerned, and just as Israel was about to approve the drug it was withdrawn from the Market. According to the FDA 10,000 people in 20 countries were victims of the simple sedative.
Senator Estes Kefauver was, at the time, investigating “the escalating expense of lifesaving prescription drugs “pharmaceutical executives were openly berated for profiteering and doctors were portrayed as dupes of pharmaceutical companies. He unsuccessfully tried to require newly approved drugs to “generate competitive markets after 3 years.” He also failed to eliminate the promotion of “me-too drugs” and “molecular modifications”. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4101807/
But, thanks to thalidomide, the Kefauver-Harris amendments to the Food, Drug, and Cosmetic act of 1938 became law in 1962. Proving a drug was safe in mice and a rat was no longer enough. A drug had now, to be shown effective as well as relatively safe.
The drug companies fought back in the courts. The Supreme Court, in 1974, allowed the FDA to rule that drugs in use before 1962 were no longer protected by a “grandfather clause.” It gave the FDA full authority to demand double-blind studies.”
A federal agency with more than 22,000 employees, the modern FDA does much more than give marketing approval to drugs and monitor their side effects in humans. Among other tasks, it ensures “the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices.” It’s also responsible for the safety of our food supply.
It was created in 1906 when Congress passed the original Pure Food and Drugs Act. The law “prohibited misbranded and adulterated foods, drinks and drugs in interstate commerce.” After spending time as a subdivision of the department of agriculture, the FDA emerged in 1930.
The agency’s next boost in responsibility came after Bayer developed, but was unable to patent mankind’s first antibiotic, Sulfanilamide. It was made and sold in pill form by manufacturers throughout the world, and it was widely used. Then a company in Tennessee created an elixir. Their chemist dissolved the medication in diethylene glycol, a compound normally used as antifreeze. It turned out to be toxic, causing kidney failure and death. Following a public outcry over the death of 107 men, women and children from the “wonder drug”, congress passed, and President Franklin Roosevelt signed the Federal Food, Drug, and Cosmetic (FD&C) Act of 1938. “For the first time, manufacturers were required to show a drug was safe before it could be marketed.”
In 1980 congress passed the Bayh-Dole act. At the time when research was paid for with government (tax payer) moneys, discoveries were available to all comers. They were in the “public domain.”
The legislation changed the rules. After 1980 universities and the NIH were allowed to patent their discoveries, and they could sell licenses to drug companies. With the license in hand the drug companies could use the “taxpayer funded research” as a basis for pharmaceuticals.
In 1984 the Hatch-Waxman act provided additional exclusivity to brand name drugs whose patents had not expired. Called the drug price competition and patent term restoration act, it made it easier for generic drugs to come to market. Companies making these medications had been forced to repeat clinical controlled trials, to start from scratch even though the drugs had been used for years and were relatively safe. The law ended that requirement. Now the people who made generic drugs just had to show the FDA they were using the same active ingredients.
The law also said that when a drug lost its FDA exclusivity, generic drugs couldn’t be marketed if the medication was still covered by a valid patent. And that didn’t happen very often. Patents were usually filed early in the drug development process, and they often expired shortly after the drug was approved.
Companies had to factor in the new generic rules when they were calculating the potential future value of a product they were working on. The rule that extended patent protection shouldn’t have changed the numbers much. But it did. Sometimes long after a drug was on the market companies submitted additional patents that dealt with non essential ingredients, like the color of the pill or the starches used as filler. These minor filings were usually granted (in part because the patent office didn’t have the resources to check out the plethora of applications, and probably, in part, because no one seemed to care.) When a drug’s years of exclusivity ended, the additional patents allowed a company to allege its product was “patent protected”.
After 1984, when a drug’s FDA granted exclusivity ended, a generic company could ask for permission to produce the medicine. The first appropriate applicant was, by law, supposed to get a 180 day restricted head start on the competition…unless the product was covered by a “valid patent”. If the drug was “protected,” the original manufacturer could file suit and allege violations. And they did.
The legal filings were often capricious. But that didn’t matter. The law said that once the suit was filed, the FDA had to automatically delay the approval of the generic drug for 30 months “to permit litigation.”
At this point both manufacturers knew the generic drug maker would probably win; but lawyers know how to drag things out. Court battles could be lengthy and expensive. As a result lawyers got together before or sometimes in the midst of the costly litigation. The original company typically made a proposal to the generic manufacturer. They sometimes offered the new company millions of dollars a month. All a generic drug maker had to do was delay producing and marketing their version of the drug for a number of years. The practice, which is called pay-for-delay, became more and more common. There were 33 such settlements in 2010. In 2013 the Supreme Court by 5 to 3, ruled that pay-to-delay deals are subject to antitrust laws. Two years later the government alleged the drug company, Teva, made a pay-to-delay agreement. The company chose to avoid court and settled the case for $1.2 billion. In 2012, 40 pay-for-delay law suits were filed. The number dropped to 29 in 2013 and 21 in 2012.
After Congress passed the Prescription Drug User Fee Act (PDUFA) in 1992.), Two thirds of drug approval expenses were paid by big Pharma. The fox was paying the regulators who were guarding the hen house.
Another well meaning law was added to the mix in 1997. Drugs that had only been tested on adults were sometimes given to children. That didn’t sound right and congress decided to incentivize drug companies. A new law said that before a drug was given to kids, the medicine had to be proven safe and effective. As compensation for the additional testing drug makers got another 6 months of exclusivity.
If a drug that brought in more than a billion dollars a year was about to expire, the company could give it to a few kids, write up a study, and shut generic drug makers out of the market for an additional 6 months.
The FDA uses a number of advisory boards, groups of physicians who are experts in the field. The FDA officer makes the final decision, but, in tough situations, it must be nice and at the same time awful to have a group of M.D.’s who serve as a sounding board and buffer.
The 2007 decision about Avandia—a glitazone used to treat diabetes– is an example of how wrong these boards can go. The first glitazone was approved by the FDA in 1997. A few of the people who tried it developed liver failure, and it was pulled from the market in 2000.
The second, Rosiglitazone (Avandia) raised the level of cholesterol in the blood. Since people with diabetes have an increased risk of heart attacks, reviewers at the FDA were appropriately worried. An elevated cholesterol increases the risk of a heart attack, and Avandia caused the cholesterol level to rise. To the casual observer the drug should have seemed to be risky. Avandia was made by the British firm SmithKline Beecham.
The third, Pioglitazone (Actos) was produced by the Japanese pharmaceutical company Takeda. It didn’t worsen blood lipids and therefore should not have increased the risk of a heart attack or stroke.
The FDA had advisory panels of physicians who were experts in treating diabetes. They wanted to be able to use glitazones on patients who were no longer responsive to metformin. .
In 1999 the FDA approved both rosiglitazone (Avandia) and pioglitazone (Actos), but they insisted that the companies monitor the drugs for problems.
In 2000 each of the drugs had sales of $500 to $600 million, and by 2006 they both grossed more than 1.5 billion dollars a year.
Pioglitazone (Actos) did not increase the risk of coronary disease.
Rosiglitazone did. It also, sometimes caused heart failure, fluid in the lungs and legs. FDA panels were convened. The experts voted to keep the drug on the market, but black box warnings were added to the packaging. Physicians on the panels hoped doctors would read them and use the drug sparingly.
They didn’t, and a 2007 a medical paper convincingly showed that Avandia caused heart disease. After it came out the drug’s sales dropped dramatically, but a million prescriptions a year were still being written.
The panels of experts convened by the FDA agreed that Rosiglitazone “posed significant cardiovascular risk”. Then they voted. Twelve of the 33 doctors thought the drug should be removed from the market.
The chairman and 9 others voted for much stricter controls. The doctor in charge explained his position in a piece that appeared in the New England Journal of Medicine. He wrote that “several meta-analyses revealed a significant increase in the risk of myocardial ischemic events among patients taking rosiglitazone… But a second analysis, failed to demonstrate a similar risk.” Then he added a little gibberish: “the results regarding the safety of rosiglitazone raised new questions about relative and absolute risks.”
Smith Kline Beecham was allowed to market and profit from a questionable drug. The risk was unnecessary. At the same time doctors could prescribe a glitazone that was as effective and known to be safe.
In July 2010 the manufacturer of Avandia settled a lawsuit for the harm the medication did for $460 million. Compared to revenue of $1.1 billion dollars the prior year and much more in the years before the 2007 hearings, the monies paid did relatively little harm to the company’s bottom line. Pioglitazone– Actos, is still being widely used.
In the early morning hours of June 27, 2003– (thirteen years after congress had granted Medicaid “most-favored customer” status, and required drug manufacturers to sell their meds to Medicaid at the “best price” available to any other purchaser)– the leader of the House of Representatives managed to get a few reluctant congressmen to change their votes. The chamber passed the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.
The bill was touted as a means of providing cheap or free drugs for people on Medicare. No new taxes were enacted. The entitlement was not funded, though part of the cost was paid by enrollees. Seniors paid $265 to receive the benefit, and then kicked in $25 + a month. When the cost of a person’s drug exceeded $2400 a year the government stopped paying. Enrollees had to shell out for the next $4000 worth. If the drug cost more than $6400 a year, the government started paying. The $4000 was called the donut hole, and it was eliminated by Obamacare.
The U.S. government which paid for more than 60% of the nation’s health care expenses is still not allowed to negotiate price with drug companies.
After the bill was passed the government accounting office claimed that American prescription drug prices rose 6.6% a year between 2006 and 2010. By contrast the price of generic pharmaceuticals increased by 2.6 percent annually and overall medical costs rose 3.8% a year.
“Representative Billy Tauzin (R-La.), coauthored the bill while negotiating a $2-million-per-year job as a lobbyist for the drug industry’s trade organization.” And Thomas Scully, a Bush Medicare official who misstated the program’s cost became a health industry lobbyist.”
At the time the law was passed “most European countries directly regulated the prices of prescription drugs”. Canada had an “agency” that prevented excessive drug prices. For some drugs people in those countries were paying as little as half as much as Americans.
Prior to 2003 there were situations where doctors would buy drugs, infuse or inject them, and charge Medicare and/or the patient. The system was called buy and bill; and doctors sometimes charged a hefty amount for their services.
A 2003 law abolished that practice. Doctors could still purchase the medication, but they could only bill the patient for the average selling price. The doctor’s Medicare fee for administering the chemical was, by law, capped at 6% of the drug cost. That meant that more expensive drugs generated a greater physician’s fee.
Enter “wet” age related macular degeneration, a disease that afflicts more than a million people in the country. It can be controlled by the injection of a drug, Avastin, into the eye. (The medication is an antibody. It blocks a protein that stimulates angiogenesis– the development of new blood vessels.) FDA approved to help fight cancer, the remedy can be purchased and administered by a skilled ophthalmologist.
Before using it the doctor evaluates the patient. He or she discusses the risks of injecting the drug, and explains downsides like bleeding and retinal detachment. On the appointed day the patient is brought to the procedure room and checked. The edge of the eye is injected with a numbing agent. A second needle is then passed into the inner cavity of the eye, a chamber full of a gelatinous material known as the vitreous. The medication is injected. It raises the pressure in the eye for a brief period of time. Vision is temporarily blurry. After a period of observation the patient can go home. For his or her efforts the doctor was paid 6% of the drug’s price. The small amount needed to treat an eye had a cost of $50, so the fee Medicare paid for the injection and observation was capped at $3.
When the FDA approves a drug for one indication, the company can produce and market it. Their representatives and ads are allowed to promote the drug for the approved indication, but they are not allowed to talk about other possible ways the drug can make a difference. When a doctor reads the medical literature and learns a drug helps an additional, different condition, he or she doesn’t have to wait for the drug company or the FDA to act. If the drug is available, the doctor has the legal right to use it. Avastin is not FDA approved for age related macular degeneration, and the company does not want approval.
A second drug was developed by the same company. This time they used a smaller protein, but vis-a-vis safety and efficacy the new medication is virtually identical. It has FDA approval and sells for $2000 a shot. Using it an ophthalmologist can charge $180 for his or her time. Not surprisingly the expensive medication is outselling its inexpensive counterpart by a lot.
At the height of the AIDs epidemic, activists protested the delay between a new drug’s submission and approval. About that time the agency started making unapproved drugs available to people who had AIDS and were unable to enroll in clinical trials. In 1988, the FDA created fast-track rules that sped up the development, assessment, and sales of new treatments– for life threatening conditions. In the process phase three trials were sometimes eliminated. In 1970 a strong demand for experimental cancer drugs led the FDA to adapt an early-access policy.
In 1992, the FDA started allowing speedy approval on the basis of end points that were seen as “reasonably likely to predict patient benefit.”
That year Congress passed the prescription drug user act. It authorized the FDA to collect money from pharmaceutical manufacturers, and told the FDA to review special drug applications within 6 months. Ordinary applications had to be assessed within a year.
When they need them doctors have long been able to get experimental medications. Using the IND process, over 100,000 people have received investigational drugs for serious or life-threatening conditions. As therapies were developed and authorized more quickly, the FDA started wondering how often they were endorsing drugs whose risks outweighed the benefits. And they started “requesting” post approval studies. Under the 2007 FDA amendments act, congress said the FDA could now “require” studies after a drug was approved. Milestones could be specified, and companies could be fined.
In spite of the law only half of the post approval studies were completed within 5 years. 20% had not been started and 25% were delayed or ongoing.
The head of the FDA is chosen by the president of the U.S. Some of our leaders are philosophically soft on regulation and want to loosen the rules. They think the government doesn’t work, and the market place should be trusted. (Until the market gets in trouble and needs the government to bail them out.)
But the regulations do more than protect people. They sometimes, also protect our pocket book. Like when the FDA didn’t approve Solanezumab. They thought the evidence was too flimsy. And they were right. In 2016 Eli Lilly announced that Solanezumab was a failure. It did not slow the progress of Alzheimer’s.
“The drug binds the amyloid-B peptides that form plaques in the brain”. Many believe amyloid plaques are the cause of Alzheimer’s dementia, and that the Solanezumab monoclonal antibody could help clear amyloid from the brain.
The company’s original placebo study, performed 4 years earlier, had shown Solanezumab didn’t work—“didn’t improve cognitive function in people with mild to moderate Alzheimer’s.”
At the same time “there appeared to be a statistically significant benefit for the subgroup of patients with mild dementia–a 34% reduction in cognitive deterioration” Maybe Lilly had something. The company went to the FDA and sought tentative approval, and the FDA turned them down. They demanded further testing.
In recent years, the FDA’s testing requirements have been under attack. One section of a new law “allows the secretary of health and human services to rely more heavily on surrogate measures, or “drug development tools,” Using these softer criteria, FDA leaders could theoretically have approved the drug. It seemed safe enough. The agency could have then required post marketing testing–studies that take years to perform. But why would anyone with mild dementia risk getting a placebo rather than the real thing?
Lilly enrolled 2100 people with mild dementia and followed them for 18 months. They learned their drug didn’t slow the disease.
The money saved by waiting was substantial. People are desperate for something that can stop, prevent, or reverse Alzheimer’s. 2.5 million Americans would have been able to access the medication. Drugs like this almost always cost more than $10,000 per patient per year. So, using surrogate criteria, we would have paid billions for a useless drug.
FDA Regulation of Prescription Drugs: Edward Campion, M.D., N Engl J Med Feb 16, 2017
The U.S. made one-small-step towards lower drug prices when they passed the Biologics Price Competition and Innovation Act (BPCI Act) of 2009. (The Europeans took similar action in 2006). Our country now allows companies to market “interchangeables”– medications that are “different chemically” but work as well and are just as safe as a currently marketed drug.
In fact, industry had been marketing biosimilars for years. But– in the past they didn’t “price compete.” Companies marketed biosimilars so they could charge higher prices. Prilosec, a drug that stops the stomach from making acid, is chemically the mirror image of Nexium. Their actions are the same and they are similarly safe and effective. The milligram dose is a little different. 40 mg of Nexium has the same acid lowering effect as 20 mg of Prilosec. The new drug was introduced at a time that Prilosec was losing its hold on the market. The owner, AstraZeneca, funded a study that showed that in people with severe erosive esophagitis, 80 mg of Nexium was more effective than 20 mg of Prilosec. In other words doubling the dose of the drug decreased the amount of acid a stomach makes a bit more. (The idea wasn’t new. We doctors had long been using double doses of Prilosec for severe esophagitis.) The company marketed Nexium as a new drug, and they used clever marketing to gross over $5 billion a year for a few years. For starters they sold their old drug, Prilosec over the counter for 75 cents to a dollar a pill. That can be $30 a month. Nexium was a prescription and was covered by most drug plans. So it could be purchased with a low co-pay. For people with good drug insurance Nexium was cheaper than Prilosec.
(People who take the Prilosec or Nexium for a period of time can’t stop easily. The medications prevent parietal cells from making acid. (That’s what the cells do—they make hydrochloric acid.) Over time stomachs react to the absence of the normally produced acid by growing more and bigger parietal cells. These cells are inactive as long as a person keeps ingesting a pill a day. When or if a chronic user stops the drug for a day or two, the parietal cells wake up and go to work. The stomach starts producing huge quantities of acid, and many people develop chest pain or severe heartburn. Digestive Diseases and Sciences, Vol. 41, No. IO (October 1996), pp. 2039-2047.)
The biosimilar approval law promoted price competition. Drug companies could still charge a lot but in return for being able to market their drug they were expected to compete—to be a little cheaper than the established medication. Novartis played the game. The Swiss company discounted Zarxio, a neupogen biosimilar, by 15 percent. Amgen, makers of Neupogen –the existing drug—wasn’t happy, and they sued. Neupogen had been approved by the FDA in 1998. Its exclusivity ended in April of 2003. Amgen, its owner, had been selling more than a billion dollars worth of the medication a year. But their competition, Novartis wasn’t playing by the old unwritten rules. They were competing pricewise. So AstraZeneca sued. That slowed the process down. Eventually the courts ruled against AstraZeneca. Congress is still allowed to pass a law that aims to lower the price a little.