Scott Gottlieb testifies at a Senate FDA nomination hearing earlier this year
Newly-minted FDA Commissioner Scott Gottlieb is ready to disrupt the agency status quo — before others do it for him.
On Thursday, Gottlieb testified before the House appropriations subcommittee, outlining some ideas for fixing the agency’s most pressing issues. It capped off a busy week for FDA, as longstanding debates on drug pricing collided with fresh concerns over its 2018 budget.
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Gottlieb on generics
It seems one of Gottlieb’s early priorities will be to shut down opportunities to exploit a lack of generic competition, a practice known as price gouging.
For many old but critical drugs, there is only one product on the market. The drug manufacturers are therefore not subject to any competition. As long as they keep the out-of-pocket costs manageable for the end-user, they can feasibly jack up the list price by hundreds or thousands of percent (see Martin Shkreli’s Turing Pharmaceuticals).
Gottlieb outlined for the appropriations subcommittee three possible steps the agency could take to curtail this market exploitation.
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The first is to crack down on tactics for extending market monopoly periods, helping usher in generic drug competition sooner rather than later.
He also wants to streamline the approval process for generic versions of complex drugs, which are increasingly the norm.
Finally, Gottlieb wants to improve the overall efficiency of the generic drug review process to eliminate the current backlog of generic applications.
The hiring freeze has thawed
It remains to be seen whether he’ll have the (wo)manpower to execute those plans.
On the one hand, President Trump’s hiring freeze on the FDA is now over, according to RAPS. The bad news: It’s unclear how the agency will pay for new staffers — or any staffers for that matter.
In Trump’s fiscal year 2018 budget plans, FDA funding will be slashed by approximately 30 percent. To compensate, the administration would increase user fees for drug and device companies working with the agency — theoretically offsetting the government’s cuts.
However, FDA fees have already been discussed at length as part of a bill to reauthorize the Prescription Drug User Fee Act (PDUFA). On Wednesday, U.S. Senate Republican Leader Mitch McConnell told Reuters that he expects the bill to pass with deep bipartisan support, locking in the existing pricing structure for the next five years.
If user fees remain the same and the agency’s budget is slashed, an already cash-strapped FDA will have to dial back its work significantly. The industry currently pays around 60 percent of the costs; taxpayer subsidies pick up the rest.
Don’t bite the hand that feeds you
Drug pricing is also a big issue for newly-approved drugs, as highlighted by an op-ed in the New England Journal of Medicine (NEJM) on Thursday. It calls for a cap on the price of therapies that take advantage of FDA’s accelerated approval pathway.
The article was drafted by Walid Gellad, codirector of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh; and Aaron S. Kesselheim, associate professor of medicine at Harvard Medical School/Brigham and Women’s Hospital.
FDA’s accelerated approval pathway is not new, but it has expanded broadly since it was applied in the 1990s to help foster therapies for diseases such as AIDs. Along with fast-tracking the process, it allows companies to prove efficacy using surrogate endpoints. For example, a cancer drug might be provisionally approved based on its ability to shrink tumors. Because it’s not yet known if that will lead to increased lifespans, confirmatory studies are required once the drug is on the market.
It’s a slippery slope, the authors note, because the drugs can be extremely expensive — despite not having proven efficacy.
Thus, at a time when medications can cost hundreds of thousands of dollars per year, accelerated approval can lead to situations in which private payers may choose not to cover a drug because of high cost and lack of evidence of clinical efficacy, thereby thwarting the pathway’s goal of getting potentially important therapies to patients earlier, while major government payers are forced to cover the product, directing substantial tax dollars to drugs not yet shown to have clinical benefit
Gellad and Kesselheim outline three ways to improve the situation:
- FDA could mandate discounts on accelerated approval therapies until the confirmatory trials are completed and efficacy is proven
- A time limit should be put on the completion of post-approval confirmatory trials to minimize the time an unproven therapy spends on the market
- All drugs that use the accelerated approval pathway and cost over $100,000/year (or some other agreed-on threshold), should be subjected to an economic impact analysis after 1-2 years on the market
Photo: Zach Gibson, Getty Images