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Trump FDA Nominee Wants Lower Drug Costs With More Generics

Image: Trump FDA Nominee Wants Lower Drug Costs With More Generics
Since 2007, the price of the life-saving Epipen has increased sixfold, to more than $600 for a two-pack. (AP Photo/Rich Pedroncelli, File)

Wednesday, 29 Mar 2017 01:13 PM

(Bloomberg) -- President Donald Trump's pick to head the U.S. Food and Drug Administration is among the most vigorous advocates of lowering drug costs by approving cheap generics faster, an initiative aimed directly at the profit centers of major companies.

Scott Gottlieb, a former FDA deputy commissioner, would make streamlining approvals his top priority, according to a person familiar with the administration's thinking. He's particularly focused on complex medications that combine old drugs with newer delivery devices, as well as those with unusually complicated formulations.

The administration could make the changes without Congress passing a law. That would allow the administration a badly needed win in the wake of its scuttled attempt to repeal the Affordable Care Act, a centerpiece of the Trump's campaign and the Republican agenda. But it also risks angering companies that have considerable legal firepower to defend their money-makers.

"It is an opportunity for a new administration to make a mark, to do something on an issue where there's a substantial amount of public interest," said Jack Hoadley, an analyst and professor at Georgetown University's Health Policy Institute in Washington.

While the FDA commissioner has wide latitude, "the proof is in the action. You need to show there's something real behind it."

President's Pledge

Getting more generics to market faster could save Americans billions of dollars a year, and a more aggressive FDA approach would fit in with Trump's promise to provide relief. At a White House meeting Jan. 31, the president called prices "astronomical" and said competition would lower them.

The main generic drug law, 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," Gottlieb wrote in an Oct. 24 Forbes.com column.

In a March 6 speech in Orlando, Fla., before his nomination was announced, Gottlieb talked about overhauling rules that have let brand-name companies create "monopolies in perpetuity."

"The market isn't working," said Gottlieb, whose Senate confirmation hearings haven't been scheduled yet. 

Gottlieb has agreed to temporarily recuse himself from decisions on more than 20 companies where he has financial interests, according to ethics and financial disclosure documents filed with the government. The documents detail several millions of dollars worth of consulting fees, retainers, financial interests and other payments from the companies and other firms.

According to an ethics agreement dated March 28, Gottlieb has agreed to recuse himself from decisions involving companies including GlaxoSmithKline Plc, Bristol-Myers Squibb Co., and Vertex Pharmaceuticals Inc., for which he has done consulting work. He'll also avoid decisions related to financial interests he holds through the venture firm New Enterprise Associates and the banking and brokerage firm T.R. Winston & Co. He agreed to resign his positions with both firms and divest his financial interests in their client companies upon confirmation.

Most of the recusals will last for a year after ending the relationships, Gottlieb said in the ethics filing.

Absent a new law, the FDA could do much to speed approval of generics. It could devise broad guidelines for copies. And the agency could become swifter in approving drug-device combos, finding ways to allow slight differences so long as they wouldn't confuse patients.

Already, the agency has agreed to offer more guidance on complex generics as part of the renewal of a program in which companies pay for the review. The agreement is subject to congressional approval this year.

Complicated Cures

Complex drugs, a loosely defined category, include devices like EpiPen from Mylan NV and asthma inhalers, as well as injected medicines like Copaxone from Teva Pharmaceutical Industries Ltd. that have more complicated structures than simple pills. They fall into a regulatory gray area because standard tests aren't enough to prove equivalence, or because patents make it hard to devise identical gadgets.

"It has been a huge battle" to get complex generic drugs approved, said Richard Evans, an analyst at SSR Health in Montclair, New Jersey. "It is just not something the agency has been configured to deal with." But Gottlieb is "as capable as they come in getting the agency to act in a more efficient manner."

In his Orlando speech and other testimony, Gottlieb has discussed fostering competition when older niche medicines are provided by a single supplier, allowing speculators to buy the drug and jack up the price. In the most infamous example, Turing Pharmaceuticals AG, then led by Martin Shkreli, got the rights to the decades-old antiparasitic Daraprim and raised its price more than 5,000 percent.

Pricey Pens

The FDA referred questions about its plans for speeding generic approvals to the White House.

The administration "plans to reform the drug industry through streamlining the current years-long drug approval process, cutting regulations to encourage drug companies to bring back operations and jobs back to the United States, and lowering drug prices," said White House spokesman Ninio Fetalvo.

Speeding generics is a rare issue that could have bipartisan support.

Greg Walden, an Oregon Republican who is chairman of the House Energy and Commerce Committee, has said he backs a bill to require the FDA to prioritize reviews of generic versions of rare drugs or those that have little competition. The FDA says it already puts at the front of the line applications for generics that would copy single-source treatments.

EpiPen Dispute

The difficulty of creating generic versions of drug-device combinations was highlighted during recent controversy over EpiPen, used in allergy emergencies. Since 2007, Mylan has raised the price sixfold, to more than $600 for a two-pack, though it recently introduced a $300 authorized generic version.

A low-cost substitute has been elusive primarily because of a dispute between drugmakers over a plastic cap. Mylan's EpiPen has one capped end, Teva Pharmaceutical Industries Ltd.'s proposed generic version had two.

Mylan cited that difference as the key reason the agency should reject Teva's generic. That's exactly what happened in February 2016.

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President Donald Trump's pick to head the U.S. Food and Drug Administration is among the most vigorous advocates of lowering drug costs by approving cheap generics faster, an initiative aimed directly at the profit centers of major companies.
fda, scott gottlieb, generic, drugs, price
Wednesday, 29 Mar 2017 01:13 PM
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