FDA, Pricing

The Shkreli rule? FDA is exploring whether selected reimportation could cripple the drug profiteers

Martin Shkreli was hauled in front of lawmakers, jailed on fraud convictions and subjected to every known form of legal pressure after hiking the price of Daraprim by more than 5000%. But none of it worked to force him to back off a perfectly legal strategy to gouge payers on a narrowly controlled generic drug — where the sky is the limit on the price.

So now the FDA is exploring a new option, which involves a tactic that the drug industry — and many others in the government — have long abhorred.

In a statement out this morning, the FDA says that it is assembling a working group to consider whether reimporting drugs from abroad may be the answer to the drug profiteers. 

We want to examine whether—under these narrow conditions—the additional market competition from the short-term importation of foreign versions of the drug may complement the FDA’s current efforts, and help meet near-term patient need in the U.S. until new competition is able to enter the domestic market.

Reimportation is nothing new. Many Democrats have long suggested that patients in the US be allowed to buy drugs in foreign markets where single-payer systems have forced down the price. The Trump administration and others, particularly in the industry, have kicked back, saying it wouldn’t provide a safe supply of therapies. And drug manufacturers, critics add, wouldn’t allow it anyway, cutting off any suppliers who might try.

FDA commissioner Scott Gottlieb, though, is prepared to consider using reimportation for any other Shkrelis that come along. 

Any policy that involves the importation of drugs would be temporary until adequate competition enters these categories. Furthermore, any resulting policy would also be narrowly tailored in order not to create the same risks of counterfeits or other unsafe drugs getting into the U.S. supply chain as a broader importation policy would present. Our ultimate goal is to seek multiple FDA-approved and marketed versions of each medically important drug for which there are no blocking patents or other exclusivities.

That could prove interesting.

Shkreli, the old Valeant, Mallinckrodt and others have been known to spur dramatically higher prices. Where would the agency draw the line?

Would they go after PTC Therapeutics?

PTC bought an old, cheap steroid called deflazacort from Marathon Pharmaceuticals after Marathon rolled it out for a stunning $89,000 annual price tag. PTC bagged it for $140 million up front, then set a vague net price of $35,000 based on the patient’s weight — which could take some patients past what Marathon wanted to charge.

Marathon was excoriated for price gouging, but PTC has largely escaped notice. Meanwhile, there’s been growing criticism of annual price hikes that are standard in the industry — but that will almost certainly be off limits to regulators.

If the FDA does go forward against the profiteers, though, it will be interesting to see where it draws the line.


Image: Scott Gottlieb. AP IMAGES


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