In a significant move, the Food and Drug Administration late last week made a policy change that may prevent companies from pulling a Martin Shkreli.
The agency plans to expedite reviews of applications for generic drugs where only one treatment is currently sold. The shift was prompted by public outrage that erupted last fall when Turing Pharmaceuticals, which Shkreli ran before he was indicted for securities fraud, bought a life-saving drug called Daraprim and promptly jacked up the price by 5,000 percent, from $13.50 a tablet to $750.
“We identified a gap and were able to identify a path forward,” an FDA spokeswoman wrote us. “The change being made (allows the agency) to capture circumstances when the only approved product on the market is a generic drug.”
Even though Turing does not hold a patent on the medicine, used to treat a rare parasitic infection known as toxoplasmosis, the company was able to increase the price as it did because there was no generic competition. The drug maker runs a closed distribution system, and as a result, Turing has a monopoly on Daraprim. Even if a generic drug maker wanted to enter what was suddenly a more lucrative market, any company would encounter a delay winning FDA approval since the agency faces a huge backlog of applications.
“This is a big deal,” said John Rother, who heads the National Coalition on Healthcare, a collection of insurers, employers, and unions, among others, that have objected to rising prices. “This should provide a faster way to inject competition in the marketplace, so that the price gougers can’t get away with what they’re doing.”
The FDA spokeswoman added that the policy change is retroactive, which means the agency will review pending applications to see if any merit an expedited review. Nonetheless, she explained that the FDA expects expedited reviews will occur “infrequently.” Ultimately, the agency believes the move could potentially speed up to 125 more generic drug applications than before the policy was revised.
Generic drug approvals, in general, are gaining more attention thanks to the national debate over the cost of prescription medicines. Although prices have also climbed for some generics, these copycat medicines — by and large — are still lower-cost alternatives to brand-name drugs. And generics now account for 88 percent of all prescriptions written in the United States, according to IMS Health.
But historically, the FDA has been unable to keep up with the pace of marketing applications filed by generic drug makers. The agency currently faces a backlog of about 4,000 applications, according to Robert Pollock, a former acting deputy director of the FDA Office of Generic Drugs, who now works at Lachman Consultants, which advises generic drug makers on regulatory matters.
During testimony last January before the US Senate Committee on Health, Education, Labor, and Pensions, Janet Woodcock, who heads the FDA division that reviews drugs, said the agency was already expediting reviews when a drug was potentially a “first generic” in a particular class or type of medicines, or when doing so could mitigate a shortage. But she demurred when asked whether the FDA would consider speeding review for situations where prices spiked.