The two leading candidates to head the Food and Drug Administration under Donald Trump are Jim O’Neill and Dr. Scott Gottlieb. O’Neill has an impressive background, having served as an investment advisor in a number of Peter Thiel’s businesses and previously worked at the Dept. of Health and Human Services. But if Trump is serious about hiring “the best people”–and most of his appointments so far show that he is–then he’ll choose Dr. Gottlieb.
Not only is Gottlieb a medical doctor, his writing shows he often views medicine from the perspective of an economist (probably due to his undergraduate degree in economics.) He understands how government laws and regulations needlessly raise the cost of health care.
His time as a senior advisor and deputy commissioner at the FDA from 2003-2007 has given him considerable insight into how that agency makes prescription drugs more expensive. Here is Gottlieb back in March 2016 on what Trump should do to fix drug prices:
When it comes to drug prices, we have two challenges. The first are older generic drugs that should be sold cheaply, but are sometimes very costly. This is often a result of failures in the way that FDA is regulating generic medicines. The agency’s long and costly approach to regulating generic drugs is reducing competition in the generic market and increasing the cost of manufacturing generic medicines.
The second problem is the way that drugs get priced in the market. Government regulations force companies to launch drugs at a single price. Drug makers are prevented from charging different prices for the same drug, depending on how a medicine is being used, or the benefits that it’s actually delivering to a patient.
To make the market for new and innovative drugs more affordable, we need to make it more competitive. For all the talk of our “free market” for prescription drugs, there are a lot of regulatory layers that suppress the sort of competition that can enable medicines to be sold more cheaply, while still preserving the incentives that have fueled our exceptional level of domestic drug innovation.
For those of you who are interested, I’ve include a long quote from an article Gottlieb wrote about the recent price hike of EpiPen and how FDA regulations make it very difficult for alternatives to EpiPen–i.e., competition that brings prices down–to make it to market. Suffice to say, the FDA needs a commissioner who is committed to reducing the role of government in prescription drugs. Trump could do no better than to appoint Dr. Scott Gottlieb.
Those looking to develop alternatives to EpiPen can get caught in a regulatory Catch 22.
One issue relates to the existing generic drug law, and FDA regulations that govern the generic approval process and the Abbreviated New Drug Application (ANDA) that a generic drug maker must file with FDA. Under the Agency’s interpretation of those rules, if a patient has to be re-trained to use a generic alternative to a branded product, then the alternative product cannot bear the same labeling as the drug it seeks to copy. As a result, it can’t meet the burden of the ANDA process and be approved as a generic equivalent.
In other words, the generic drug can’t be considered the “same” as the branded version that it seeks to copy, and serve as a fully substitutable alternative.
This means that an alternative to a complex drug or a complex drug and device combination like EpiPen would have to function in the precise manner as EpiPen. To the extent that EpiPen’s manufacturer, Mylan, maintains some intellectual property around some of the functions of its device that also correlate to some of the unique instructions on how to use the product, this can be an impediment to the entry of generic competitors to EpiPen — even if most of the fundamental IP on the drug and the device has lapsed.
At the same time, it could be difficult under FDA’s existing rules, for a competitor to EpiPen to seek approval under the longer and costlier new drug approval process, as a branded alternative to EpiPen. This is the Catch 22. A competitor to EpiPen might not be able to get through the generic drug route. But it also might not qualify as a new drug.
EpiPen is not unique. It falls into a category of old drugs, many of which should have long been subject to generic competition. Only the generic drug law, which was crafted more than 30 years ago, didn’t contemplate these “complex” drugs, and so it doesn’t provide for an efficient and predictable path for enabling generic entrants to them.