EDITORIAL: A regulatory drug shortage – Washington Times

EDITORIAL: A regulatory drug shortage – Washington Times.

FDA’s marketplace intervention endangers cancer patients

The last thing a sick person wants to hear is that ample supplies of a life-saving medicine have been replaced by a surplus of red tape. That’s precisely what’s happening nationwide, with 82 percent of hospitals reporting shortages so severe that treatment must be put on hold, according to the American Hospital Association. Since 2010, 210 drugs, many of them critical components of cancer treatment and anesthesia, have been at dangerously low stock levels.

On June 15, the House Oversight committee issued a report implicating the Food and Drug Administration (FDA) and a badly drafted law for the current state of affairs. Many of the hard-to-find drugs are now off-patent, produced as generics with very narrow profit margins. The Medicare Modernization Act changed the way manufacturers were reimbursed for older generic drugs, particularly when administered in a nonhospital setting. The price of three chemotherapy drugs, as the report details, fell 90 percent in the first year they went off-patent.

The price drops were steep enough that manufacturers began to give up. In a free market, the price for the drugs would rise until supply could meet demand. It didn’t happen here because the government plays such a major role in Medicare that the law effectively imposed price controls. Only a few big manufacturers who could exploit economies of scale and turn a modest profit on the low-margin generics continued making these medicines.

Even this would not be a problem under normal circumstances, but the FDA began getting more involved. In 2009, the FDA sent out 474 warning letters to manufacturers, 673 in 2010 and an astounding 1,720 in 2011. As the congressional report noted, there’s no evidence anyone has been injured from medication manufactured in the United States, but the federal busybodies forced four out of the five largest American injectable drug manufacturers to undertake remediation efforts. As a result, there was a 30 percent drop in drug-production capacity.

The FDA’s ham-fisted approach suspended entire facilities or major plant renovations instead of using targeted inspections. The agency didn’t consider the impact of its actions on the nation’s drug supply or on cancer patients. For the last two years, hospitals and doctors have been forced to make decisions about which patients get the drugs that are available, and which ones go without, or whether to substitute a drug that might not work as well.

In true bureaucratic fashion, the FDA is tackling the crisis it created by expanding its Office of Drug Shortage. The idea is to get information ahead of time about which drugs will be in short supply. This leaves in place the root cause of the problem: government intervention in the market. The supply of generics will not grow, and the concentration of the market will not decrease unless the production of these drugs becomes more profitable. That requires lifting the government-imposed cap on prices. There are enough big players on the other side, in the form of the group purchasing organization, to keep prices in check. The FDA needs to step back and try to do no further harm.

The Washington Times

The FDA Kills – John Stossel – Townhall Conservative

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The FDA Kills – John Stossel – Townhall Conservative.

It would be nice if politicians and regulators left us alone. But they don’t. They always want to do more. Recently, there have been shortages of some medicines. Cancer patients can’t get drugs they need. Why not?

One reason is that a big drugmaker shut down for a year in part to meet Food and Drug Administration rules. The FDA makes it so expensive and difficult to sell drugs that there isn’t an eager pack of companies rushing to the fill the gap. The free market would provide that, but government intervention, such as low Medicare reimbursement, strangles it. So people suffer.

Does the FDA say it’s sorry for its part and back off? Of course not. Regulators almost never do that. In fact, the FDA wants more power.

It wants to regulate how your doctor uses his smartphone. I’m not kidding! The FDA wants the power to approve mobile medical apps that let doctors monitor patients’ vital signs over their phones. As one doctor put it, “Even though I’m away from the hospital, I can still look at … real-time wave form data just as if I were at the patient’s bedside.”

Sounds great. It makes doctors more efficient. But the FDA basically says, “No, you just can’t put something on your phone if it’s a medical device. What if it doesn’t work right? We have to approve it first.”

That caution makes sense to people. Our first instinct is to say, “I don’t want someone getting rich off a device that might not work right. It might kill me. I want the FDA to make sure everything is safe and effective.”

But lawyer Jonathan Emord says our instinct is wrong.

“It is wrong because these regulations are costly, burdensome, and they prevent essential medical apps from getting into the marketplace,” Emord said.

But an app might kill me.

Emord said that although many medical apps are available, there is “not a single complaint that someone has died or been seriously injured by a single one.”

But what’s the harm in running apps past the regulators?

“There is so much corruption at the Food and Drug Administration … so much anticompetitive bias.”

The FDA takes bribes?

“Almost,” Emord explained. “If you feather the right nest, you will do well for yourself after you leave. This is well known.”

This is known as “regulatory capture.” A regulator makes it tough for some company’s competitor and then gets a job with the first company when he leaves his government job.

There’s a big cost to the public when companies submit applications and then wait years for FDA approval.

“We’re losing time, precious time that lives are dependent upon,” Emord said. “MIM Software developed a simple mobile device that would combine MRI images, PET scans, CAT scans all together and produce a super image that was better for diagnosis … right on your phone. To get that through the agency, it took two and a half years and cost some hundreds of thousands of dollars. All the while it could have been in use, and ultimately it was approved.”

Lawyers and reporters encourage bureaucrats to move slowly. If something goes wrong, the media make a huge fuss about it, and the class-action parasites pounce. But when the FDA delays a device for years and people die, we don’t report that. We don’t even know who the victims are.

Useful HIV drugs were available in Europe for years before the FDA approved them for use here.

A doctor at the Cleveland Clinic invented a medical app that helped physicians calibrate the amount of radiation to give to women with breast cancer. The FDA demanded so much extra and expensive proof of its safety that he abandoned it.

The FDA’s caution leads many companies to just give up on potentially lifesaving ideas.

Yet I don’t hear companies complaining.

“If you raise your head above the parapet and you become vocal in your criticism, the FDA remembers like an elephant and will stamp you out of existence. They’ll punish you. It’s so much discretion in their hands. They sit like emperors reigning over this stuff.”

Obama’s Drug Shortage Demagoguery – Michelle Malkin – Townhall Conservative

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Obama’s Drug Shortage Demagoguery – Michelle Malkin – Townhall Conservative.

President Obama couldn’t wait to trample over the legislative process again. This week, he issued his 98th executive order on an irresistibly exploitatable policy issue: prescription drug shortages. Soon, “One a Day” won’t just be a multivitamin. It’ll be the rate of White House administrative fiats.

Federal officials darkly suggest that selfish industry “stockpiling” is endangering Americans’ lives. “If we find out that prices are being driven up because shortages are being made worse by manipulations of companies or distributors,” the White House further threatened, “agencies will be empowered to stop those practices. And the FDA and the Department of Justice will be investigating any kinds of abuses that would lead to drug shortages.”

As usual, the underlying reasons for these marketplace conditions are gobsmackingly complicated. As usual, a significant portion of the fault lies with the government — not evil corporate “abuses.” And as usual, Obama’s unilaterally imposed “solutions” promise to do more harm than good.

There’s no question that drug shortages exist and that they have been on the rise. According to the U.S. Food and Drug Administration, 246 drugs are now scarce. It’s a record. Why? I’ve rounded up just a few of the reasons:

— DEA rules. In some cases, manufacturers have been ensnared by federal Drug Enforcement Administration regulations. Take Adderall, the attention-deficit hyperactivity disorder medication. As ABC News reported earlier this year, Shire Pharmaceuticals makes Adderall “and is under contract to provide the generic form of the drug to Teva Pharmaceuticals and Impax Laboratories, which mass produce the generic.” According to Shire, their supplies have been hampered by DEA restrictions on the amphetamine-based medications, which are tightly monitored controlled substances.

— FDA rules. According to the American Society of Health-System Pharmacists and other professional organizations, “several drug shortages (e.g., concentrated morphine sulfate solution, levothyroxine injection) have been precipitated by actual or anticipated action by the FDA as part of the Unapproved Drugs Initiative, which is designed to increase enforcement against drugs that lack FDA approval to be marketed in the United States.” These industry experts point to additional new drug manufacturing approval processes that are “lengthy and unpredictable, which limits their ability to develop reliable production schedules.”

— Manufacturing problems and generic drug status. Sterile injectables such as Propofol, a widely used anesthesia drug, are notoriously difficult to make. The timeline is long; interruptions in manufacturing one drug can affect multiple products. Sterile injectables can be contaminated easily. Several batches have been recalled in recent years because of dirty particulate matter found in vials.

Recall and liability headaches have led manufacturers to get out of the business. Moreover, as low-priced generic drugs, sterile injectables just aren’t as attractive to pharma companies already weathering tough economic times. When drugs go off patent, the prices decrease. The rest is elementary.

“If the costs associated with making a drug begin to outweigh the profits,” the New England Journal of Medicine explained, “companies may wish to discontinue production of the drug in favor of a newer, more profitable product. If the number of companies making an older drug decreases, and there is a delay or problem in manufacturing, shortages can and do occur.”

— Bush-era Medicare price controls and Obamacare price controls. Everyone from the free-market Wall Street Journal editorial board to renowned death panelist Ezekiel Emanuel agrees that low prices yield inevitable shortages. President Bush and Republicans imposed a 6 percent cap on cancer drug price increases that took effect six years ago. Health care analyst John Goodman adds that Obamacare exacerbated a separate federal price distortion, which requires drug companies to provide rebates to certain hospitals and clinics “of 23.1 percent for brand drugs; and 13 percent for generic drugs off of their average manufacturer’s price on qualifying outpatient drug use.”

Emanuel, the controversial former Obama health care guru, provided an unexpected shot in the Democrats’ market-bashing arm in a recent New York Times op-ed: “You don’t have to be a cynical capitalist to see that the long-term solution is to make the production of generic cancer drugs more profitable.”

But instead of a sober debate about the wildly divergent reasons for some of these shortfalls, Obama’s perpetual campaign machine gave us taxpayer-funded videos that yank the heartstrings and smear pharmaceutical companies. Instead of an honest assessment of the proposed government “fixes,” Washington bureaucrats are using patients as human shields to disguise new power grabs.

Unfortunately, the only cure for Team Obama’s overdose of toxic demagoguery lies at the ballot box. We can’t wait.