FDA

The FDA Commissioner's Novel Plan for Cutting Drug Prices: Competition

Make pharmaceutical competition great again.

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Scott Gottlieb, the nation's new head of the Food and Drug Administration, wants to tame drug prices the old-fashioned way: by letting more companies compete.

Generic drugs are typically sold for far less than their chemically identical branded counterparts. Yet from 2010 to mid-2015, the prices of more than 300 of the 1,441 established generic drugs experienced at least one extraordinary price increase of 100 percent or more, according to a 2016 Government Accountability Office report. Lack of competition is one major reason why.

A stunning 2,640 generic drug applications are currently stuck in the FDA's approval process. (In 2006, by contrast, the agency's generic drug backlog stood at only 800 applications.) A 2016 article in the Journal of the American Medical Association pointedly noted that "none of the approximately 1500 generic drug submitted in fiscal year 2014 had been approved by the end of that year."

Lower-priced generic drugs saved the health care system an estimated $254 billion in 2014. An FDA study has found that as the number of competing manufacturers for a drug goes up, the price falls dramatically. When two companies compete, the price falls an average of just 6 percent; when there are nine competitors, the price drops by an average of 80 percent.

Gottlieb reportedly plans to prioritize the approval of additional generic competitors, and he hopes to eliminate the backlog of generic-drug applications within a year. It isn't surprising that he'd set such a goal: He wrote an op-ed last August arguing that excessive FDA regulation was stymieing the development and approval of generic drugs.

For example, the Obama administration abruptly imposed higher manufacturing standards on generic makers in 2009, forcing many to leave the market. Gottlieb's op-ed also noted that the average cost to file a generic drug application with the agency had risen from about $1 million in 2003 to $5 million in 2016—and that sometimes it was as high as $15 million. As a result, a company would have to expect to earn considerably more revenue from a generic product for it to be worth its while to consider competing against companies already in the market.

Last year Gottlieb called for changing that; this year he'll get a chance to try.

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19 responses to “The FDA Commissioner's Novel Plan for Cutting Drug Prices: Competition

  1. For example, the Obama administration abruptly imposed higher manufacturing standards on generic makers in 2009, forcing many to leave the market.

    The gift that keeps on giving. I am sure they had a good reason. Think of all the jobs that are created when the pharma CEOs spend all that bonus money.

    1. I thought Obama was one of those benevolent, self righteous socialists who is immune to corruption and against moneyed power?

      How many cronyists did he make filthy rich during his tenure do you think?

      1. “I thought Obama was one of those benevolent, self righteous socialists who is immune to corruption and against moneyed power?”

        No such thing exists, as you well know (even though you left pff the ‘sarc’ notice). There are only Socialists who believe that THEY should be the ones getting bribed, and THEIR FRIENDS should have all the moneyed power. They are Socialists, for the most part, because they are well aware that they have little talent for honest competition.

        1. Nah, there are lots of true believers out there. Of course such naive people rarely rise to leadership positions, which are grabbed by the more cynical and ambitious. They do make good foot soldiers, though. At least until “socialists” actually achieve real power. At that time, they tend to become inconvenient and embarrassing, always bleating about their principles instead of going along to get along. That’s why they’re typically the first to go up against the wall or get shipped off to the camps.

  2. I didn’t spend years of paying lobbyists to get politicians laid and high to have you go and let competition in.

    This is horseshit!

    1. No worries brah. “Gottlieb reportedly plans to prioritize the approval of additional generic competitors” So, keep you payments up and you will stay at the bottom of the priority list.

  3. As they say, it’s the first pill that costs beaucoup bucks. They don’t want to make it not worthwhile to develop new medicines.

    1. FoE: That’s why patent holders get to sell tens of millions of pills at monopoly prices – then come the generics at cents on the dollar. Or at least that’s the idea.

  4. RE: The FDA Commissioner’s Novel Plan for Cutting Drug Prices: Competition
    Make pharmaceutical competition great again.

    No, no, no!
    This can never happen for a host of reasons.
    First, it invites the nefarious idea of competition which would only end a wonderful monopoly that keeps drug prices hight.
    Secondly, competition is a capitalist tool that should never be re-introduced into our wonderful socialist slave state.
    Thirdly, competition will allow more choice for the unenlightened masses that infect our beautiful proletariat paradise. The little people should never have anything as dangerous as choice.
    Lastly, competition opens the floodgates of a free market, and we all know all the evils that go with it.
    Horrors!

  5. We’ve had MAGA, now MPCGA? I vote for MEGA (Make Everything Great Again).

    1. Calm down .com

  6. An FDA study has found that as the number of competing manufacturers for a drug goes up, the price falls dramatically

    Nonsense.

    All righthinking people understand that, logically, the more companies you have offering a service, the more you are unnecessarily duplicating overhead expenses, therefore while it may seem cheaper, it isn’t.

    Only a government-owned monopoly can reduce costs. I mean, think about it.

    1. Nobody needs more than 23 brands of generics when children are hungry for drugs in this country.

  7. I am telling you, Trump will go down as one of the best Presidents for having cabinet agency heads that actually want to shrink government and/or costs.

    To some, everything Trump does is random.

    1. I don’t think much of Trump, as a person. He strikes me as a blowhard with strong tendencies toward jackassery. That said, he was head and shoulders, and much of the torso, above Shrillary. Shrillary is condescending, arrogant, shrill, criminal, and ostentatiously stupid. Trump’s cabinet picks have been better, on average, than any President I can recall (I liked Reagan, but his cabinet struck me as somewhat creepy). It’s a pity that this administration seems bent on bucking the tide of marijuana legalization. There are other things about Trump’s policies I don’t like. But he’s doing one hell of a lot better than I expected, and makes Shrillary look like the unmitigated disaster she undoubtedly would have been.

      1. So, Trump is basically Teddy Roosevelt? It’s hard to be a bigger dick than Ted, but Trump sure is giving it the ol’ college try. If he survives the inevitable impeachment, he may very well go down in history like our previous blowhard, asshole presidents that we have a long and storied tradition of electing.

  8. Competition is good.

    Freedom would be much better. Freedom for Americans to self treat, and purchase their medications from where ever they want.

  9. Wait. What? 15 million to FILE an APPLICATION???
    Makes the $75.00 hammer a real bargain.

  10. Come on down to Mexico and get your drugs….I once saved so much that it paid for the entire week vacation, and I came back with a year’s worth of pills, stuck in an old “vitamin” bottle.

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