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Reciprocal Approval of Drugs, According to Ted Cruz and Mike Lee

How many useful drugs are approved in the other industrialized countries, but not in the US? The answer to that question has changed over the years, as this Council on Foreign Relations article notes. It’s from 2001, so it’s not about recent history, but its points about the 1960s and 1970s are that the US regulatory authorities were definitely more cautious than Europe’s during that period. Some of this was surely due to the late-1950s thalidomide disaster, where several European countries had approved a drug that the FDA rejected. The latter agency’s caution (as personified by Frances Kelsey) was terribly confirmed, but it’s quite possible that the agency erred on that side for some time afterwards for fear of something similar.

These days, the differences are (fortunately) not so stark. But there have been calls for reciprocity – automatic approval of drugs that have been approved by other well-regarded regulatory agencies – as a way to save both time and effort in the US regulatory process. A bill has been introduced in the US Senate to this effect by Ted Cruz and Mike Lee, the RESULT act. It would require that the FDA approve any drug, device, or biologic that (1) is approved by one of the countries on its list (the EU, Canada, Japan, Israel, Australia, etc.), (2) addresses a medical need, and (3) is not already banned by the FDA for other reasons. There are other provisions that I’ll return to, but first, some comments on reciprocity itself. (Similar bills have been introduced before in the House).

The idea has some well-regarded backers – economist Alex Tabarrok of George Mason has been an advocate for many years (and is name-checked by Cruz in his comments on the bill). Here’s another brief for the idea, and its title sums up the argument: “If a Drug is Good Enough for Europeans, It’s Good Enough For Us”. The first objection is usually a worry about a “race to the bottom”, as companies try to pile into the least strict agency on the list as a lever to get all the others to accept it.

I do have a concern about this, though (see below), but even before that comes Japan. There are a number of drugs that are available in Japan that are not available here, and that, to a very good approximation, is because they don’t really do much of anything. The Japanese authorities are strict on safety, but not so much on efficacy, so there are putative Alzheimer’s drugs on the market there that don’t actually do anything for Alzheimer’s, but primum non nocere, they at least don’t make things any worse. Unfortunately, a lot of things fall into that category; you might as well give people a potato to chew on. Won’t help – won’t hurt. Potatoes do tend to be cheaper than prescription drugs, though. (I should note that it’s not like the Alzheimer’s drugs approved here, all of which are also available in Japan, do all that much good, either).

So Japan is one potential problem with this idea, but even stipulating that we find a way to deal with this, the question has to be asked from back in the first paragraph: how many effective drugs are there that haven’t yet been approved in the US? I think that some people have more of a 1970 mental picture here, that there are all sorts of great therapies that our slow, cautious FDA has not stirred itself to deal with yet. But the main ones I can think of are mifamurtide, for osteosarcoma and the EU’s willingness to consider biosimilars more readily than the FDA. That last one, though, falls more into the cost-saving category than the new-lifesaving-drug one, since the whole idea is to come up with mimics of existing biologic agents. I’d welcome examples in the comments, but overall, I’m having trouble coming up with any dramatic examples of a high-impact drug that’s available in Europe right now but not in the US. (Novartis’ Bexsero meningitis vaccine should still count as an example, though – it was approved in January of this year, two years after its European approval. Novartis didn’t even file for US approval until the previous June, although that delay in filing probably represents their estimate of the FDA’s willingness to approve).

There have, though, been a number of recent studies comparing speeds of regulatory approval in different regions. Here’s one looking at 100 recent “priority review” drugs (so designated at the FDA) that have eventually been approved both by them and by the European Medicines Agency. 87 of those 100 were approved by the FDA first, and the FDA review time was, on average, shorter than the EMA’s. In recent years, the great majority of FDA approvals each year are for drugs that have been approved first in the US. (Medical devices are another area entirely, though – the US and the EU diverge more there, which is why I’m covering only drug substances in this post). Here’s a comprehensive look at drug approvals in the US, EU, and Japan in the 2004-2013 period. What’s clear is that the FDA’s median time to approval is the shortest of the the three, likely due to the priority review processes, although it’s also the most variable. Of the five new active substances approved by all three agencies in 2012-2013, three of the five were first submitted to the FDA, and all five were first approved by the FDA.

I should say something about generics here, since I would assume that this bill applies to their approval as well. What most people don’t realize is that while prescription drugs are more expensive in the US, generic medications have actually tended to be much cheaper than in Europe. Recent years, though, have seen a number of cracks in this system, but most of these are due to FDA regulations or incentives themselves, not so much, I believe, to generics being approved in other countries and not in the US. If we want to address climbing generic drug prices, and I think that we do, this is probably not the place to start in with the hammer.

So overall, I don’t see a big wave of non-FDA-approved drugs out there that will finally wash over us if a reciprocity bill is passed. Other countries, in fact, would benefit more from deciding to follow the lead of the FDA instead. That doesn’t mean the reciprocity is a bad idea per se – it just means that if someone is selling it as a way to break through to a world of lifesaving drugs that are being held back, they’re (at the very least) not well informed. There are, though, other provisions of the Cruz/Lee bill that I’m not so sure about.

The FDA would be given a thirty-day time frame to approve or deny all reciprocity requests. The agency is no doubt going to have a fit about this, sensing (as is likely) that they would not get the funds necessary to actually do that. And it would cost more – one reason that the agency has been moving faster in recent years is that they are able to collect fees from the companies that are putting in the applications (PDUFA). As mentioned above, I’m not sure just how many drugs would be coming in under these provisions, but if there really are quite a few, it’s going to bog things down under current conditions.

And here’s another one: “If a promising application for a life-saving drug is declined Congress is granted the authority to disapprove of a denied application and override an FDA decision with a majority vote via a joint resolution”. Now that’s a first. And it’s a really bad idea. I really, really, do not want the legislative bodies deciding these things. You can argue about the FDA’s decisions, but this would instantly make things worse, because it invites – encourages – political grandstanding to reverse drug rejections. Any Senator or Representative who votes against such a resolution, well, they just want people to die, right? Won’t that be the campaign ad that their opponents will run in the next election cycle? And if you worry about industry lobbying now, wait until you give Congress a veto over the FDA. No, this provision is a flat-out moral hazard, even applying just to reciprocity requests. Why doesn’t the legislature just make cancer and Alzheimer’s disease illegal, while they’re at it?

I think that it’s the “life-saving” part of the language that tries to give everyone an out here. If the patients involved are going to die anyway, then you don’t have quite as many safety worries. That’s been the argument in several therapeutic areas for accelerated approval, and there’s something to it. (And even as things stand, safety concerns are, in fact, much less of a factor in oncology as opposed to, say, diabetes drug approvals). But the language of the bill isn’t just for “life-saving” therapies. It just says that it applies to drugs or devices approved in the other countries on the list, for which there is an unmet medical need.

And there’s one more potential problem with the whole reciprocity idea. The country list is that found in section 802(b)(1) of the FDA Export Reform and Enhancement Act:

. . .Australia, Canada, Israel, Japan, New Zealand, Switzerland, South Africa, or any member nation in the European Union or the European Economic Area. As of July, 2007, the EU countries are: Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. The EEA countries are the EU countries, Iceland, Liechtenstein, and Norway. The number of “listed countries” expands automatically as countries become members of the EU or the EEA.

One can imagine the regulatory authorities of one or more countries on this list being (or becoming) a weak link – thus the “race to the bottom” worries. I’m not saying that this is likely, but it is possible, if one of the smaller or more impoverished ones suddenly finds itself as a potential window for access to the largest drug market in the world. The Secretary of HHS has the discretion to add countries to the list, as I read things, but I’m not sure what the process is for taking one off, or how long that might require.

So, to sum up: I don’t have any overarching objections to drug approval reciprocity. But some of the arguments made for it (such as it speeding up drug approvals in the US, and leading to new drugs showing up here in general) don’t seem to me to be accurate. And there are some potential unintended consequences that need to be thought about as well. The Cruz/Lee bill in particular has that Congressional override provision in it, which to me is by far the worst idea in the whole thing.

35 comments on “Reciprocal Approval of Drugs, According to Ted Cruz and Mike Lee”

  1. Colin

    One additional hiccough I could see is the FDA’s need/desire to have drugs tested in a population representative of that of the USA – the EMA doesn’t have this requirement, so I’m not sure how that would pan out. Case in point are the ethnic differences in the response to cardiovascular medications – an insufficient population of Hispanics and African Americans in the trial population is likely to raise a question about how well results from an EU-focussed dossier can be extrapolated to the USA

    Another question I’d have is how to deal with the different pathways to approval possible in the EU, e.g. central vs. mutual recognition, the latter taking longer, but generally (to my understanding) viewed as being a lower hurdle than the former – already a “race to the bottom”

    1. Diver dude in reply to Colin

      Any clinical project team worth it’s salt would design it’s clinical trial program to satisfy all the major regulators, particularly in an area where there was subpopulation variability in clinical response. If they didn’t, the global dev team would invite the clinical team to redesign the trial package. If they chose not to, they’d fire the team leader and get someone who knew how to do his damn job.

  2. biotechtoreador

    If Congress where truly worried about faster approval of drugs it would better fund the FDA to allow the agency to increase staffing to review applications faster. Unfortunately, Congress is too busy worrying about what albums Martin Shkreli buys and prefers cheap sound-bites to get their faces on the news.

    Good to see a fellow Canadian, Ted Cruz, in the mix though. A second Canadian President would be really something!

    1. Emjeff in reply to biotechtoreador

      Yes,more funding is always the answer to government failure. It is ridiculous to say that the FDA does not have sufficient funding. What they are terrible at is prioritization- applications for the 10,257th morphine extended-release tablet nearly the same attention as a truly novel drug. That is over-regulation, and if this bill helps in that regard, then great.

  3. dskmd

    Very good article. Do we really want to outsource our regulatory authority?

  4. DrugA

    Would someone please tell Senator Cruz’s supporters he is trying to force France’s early approval of RU-486 on them?

  5. Chrispy

    Well, right now we have a system where one can scoop up drugs that have been shown to work for decades, do whatever minimal trial is required to get them through the FDA, then price gouge and collect priority review vouchers for your non-innovative work. The massive rewards are not justified by the minor risk. (You’ve written a lot about this, Derek, so I won’t go into it here.) We need a system that does not allow dirtbags like Shkreli to game the system. He’s the poster child now because he’s dumb enough to be obnoxious about it, but the practice is widespread.

  6. Rule (of 5) Breaker

    I find this idea unnecessary. As Derek points out, how many drugs are we talking about here? Also, I agree with biotechtoreador, if drug approval speed is an issue, then increase FDA funding. This whole thing just looks like political grandstanding. Yawn.

  7. Jeff

    I cannot really come up with any ‘high’ impact drugs that are available in the EU but not the US. In my experience the EU has a more general review process where they look at the breadth of the data, where the US is more centered on a strict statistical test with two adequate, well controlled confirmatory efficacy trials. Consequently there are a number of EU drugs with what the FDA would consider questionable or unproven efficacy.

    However I think the major area of impact here is due to the different labeling between the EU and US. Particularly in recent years, the FDA appears to be approving drugs with more limited and directed labels than the EU. Since insurance companies are getting fairly strict about limiting use of expensive medications to labelled indications, a bill like this would likely have an enormous impact and increase drug utilization and spending in the US. A boon for patients and drug companies, but not so much for the government balance sheet.

  8. Mark Thorson

    Holy cats! Congress could override the FDA on potentially life-saving drugs? Alzheimer’s is a terminal disease, so my jellyfish protein could be forced into the U.S. pharmacopeia by a sufficiently large advertising campaign. Call your Congressman to tell him to vote for the jellyfish protein rider on the budget bill!

  9. Sam Adams the Dog

    I just want to point out a missing part of the argument, without presuming to argue on the overall merits, Such an agreement would reduce the cost of filing by pharmaceutical companies for future drugs. This could be significant. They would only have to file in one country covered by reciprocity (assuming the agreement is reciprocal on all N(N-1)/2 links).

    Of course, this could also lead to distortion, in that pharma would then file in the cheapest or most lax country, and quite possibly this could lead to a competition for laxity.

  10. Ex-Brit

    Might not be considered high impact, but I believe that Tafamidis, a drug to treat transthyretin-related hereditary amyloidosis, was approved in the EU and Japan but was turned down by the FDA.

  11. Not high-impact, but ebastine (Almirall’s Ebastel(R)) is a non-sedating H1-blocker approved in the EU but not in the US. Its sedating dose/antihistamine dose ratio is roughly 20 or so, compared to loratidine’s ratio of 1.5 or so.

    1. metaphysician in reply to Robert R. Fenichel

      So, is there a known reason why its not approved in the US?

  12. Kyle Jansen

    Would there be any benefit to making automatic approval contingent on *multiple* approvals, rather than a single approval? If you require, say, three of the countries on the list to have approved it, and none to have specifically banned it, that would make it harder for weak links to open the entire system up.

    I imagine you would still see shopping around, to find the three least-restrictive countries on the list, but I expect this would raise the bar a bit, and prevent any one regulatory agency’s error from spreading too far.

    1. J Tyson in reply to Kyle Jansen

      Another compromise measure might be limit the exo-approval process to lifesaving drugs.

      It doesn’t make much sense to keep a stage-4 cancer granny from getting a European drug.

  13. Daniel T

    Is there a easily accessible list of all drugs approved by all each jurisdiction that we could do a diff on to see what is being missed out in each market?

  14. Daniel T

    Is the a list available in text form off all the drugs approved in the USA and the EU? There is the Orange book data on the FDA, but I have not been able to find an equivalent for the EU.

  15. The problem I see is that this would automatically equal all other counterpart regulatory agencies with FDA – a good thing maybe to break FDA monopoly, but bad thing if you include all loopholes specific to each country approval process. As you remember with Shkreli, he was able to exploit unintended consequences of FDA approval process, and I worry that unscrupulous operators with find this a great opportunity to introduce sub-standard medications in US. Also, Israel regulatory process does not fill me with confidence, just by judging by long-going GMP violations by Teva. If Israel, then why not India too?

  16. Mr. Drug

    Thalidomide was approved for morning sickness in Germany and the UK – and was even OTC in Germany, so obviously it should have been approved in the US, right?

  17. a. nonymaus

    The “race to the bottom” forum-shopping is an intended consequence of this bill. It is designed to weaken regulatory protections by people who fundamentally disagree with the idea of regulating commerce (except when it protects rents flowing to moneyed interests). What you are seeing as possible problems are what this bill is designed to do.

    1. Erebus in reply to a. nonymaus

      The performance of the FDA is, on the whole, utterly dismal. Costs keep rising, timescales to approval keep getting longer, and their regulatory decision-making process is opaque at best. (When it isn’t downright mercurial, or nakedly corrupt.)

      …There is no reason for them to be policing drug efficacy anyway. It has proven an impossible task — and fraught with various pitfalls. As a consumer safety organization, they should focus on safety & leave efficacy to industry, academia, professional medical organizations, and actuaries and statisticians in their millions.

      I think that this bill is a good idea, and a step in the right direction. Alternatives to the current regulatory approval system must be explored.

      1. Oblarg in reply to Erebus

        In what way has it proven to be an “impossible task?”

        As far as I can tell, the day we throw out efficacy requirements for drug approval is the day we cede the market to snake-oil salesmen and charlatans. Perhaps that pleases certain ultra-libertarian sensibilities (“if you buy a drug that doesn’t work, it’s your fault for not doing the research!”), but to my ethical sensibilities it’s an absolute nightmare and shouldn’t be on the table at all. How on earth can one expect consumers to be able to effectively judge efficacy when it’s difficult even for experts in the field?

        For many people, there’s already no obvious difference in trustworthiness between bogus dietary supplements and actual medicine – and this is not necessarily because they are stupid people, it’s because figuring out whom to believe unless you are fortunate enough to have the right intellectual background is actually very fucking difficult. Knowing this, do you *really* believe the market would do a better job of sorting out what works than the FDA, however imperfect the latter is?

        1. Erebus in reply to Oblarg

          The FDA’s efficacy requirements:

          -Are amorphous and vague at best, which makes drug discovery more difficult and risky than it needs to be.
          -Have (famously, and recently,) buckled under lobbying and political pressure. So what are they worth?
          -Make drug approval a much longer and more expensive process than it needs to be. This hurts patients, payers, and industry professionals alike. It can also, for obvious reasons, stifle innovation in the field.
          -Lead to the prioritization of certain indications over others. This is sometimes warranted and positive (looser efficacy requirements for terminal cancer treatments), is sometimes a happy accident (efficacy trials for acute diseases can on occasion be relatively short and easy), but is sometimes a sort of de facto de-prioritization that can make clinical trials for long-term, chronic, and degenerative indications excessively onerous. (It’s well known that Alzheimer’s, for instance, is a “tough” indication for clinical trials. Aging is, I think, impossible outright — without multiple multi-year trials, it would make a mockery of “efficacy” trials.)

          One could, further, argue that even at the great cost we’re now paying, trials do a poor and uncertain job of actually testing for efficacy. To do a truly good job — especially where chronic and degenerative conditions are concerned — we’d need broader trials, longer trials, and, particularly, trials where the drug candidate is used in combination with a wide number of other pharmaceutical agents. There’s no reasonable way to do this under any existing regulatory framework; the only possible way is to open up access to patients and doctors, and run rigorous post-market analyses.

          As to the “snake-oil salesmen and charlatans” claim… I think that what you’re describing should not be taken for granted, for several reasons:

          -Insurance companies will run their own efficacy analyses, and will not reimburse for drugs that provide no benefit.
          -Many professional organizations offer standard treatment recommendations. For instance, the National Cancer Institute (part of the NIH) offers hundreds of detailed treatment recommendations to doctors, based on cancer type, stage, patient age, and so forth. These stock recommendations are based on rigorous analyses of patient outcomes, and they are generally followed. I think it’s safe to say that “snake oil” would not warrant a recommendation.
          -Physicians are, on the whole, neither stupid nor very easily fooled. Specialist physicians typically understand, at least insofar as is possible, the molecular and physiological mechanisms behind the diseases they spend their lives facing. They are generally well-equipped to assess treatment options.

          So what’s the harm? That some people may talk their way into prescriptions which do them no good? (But, also, which can’t really hurt them — and which they may be forced to pay for out-of-pocket.) If, in return, we’re given a more favorable atmosphere for drug development, for innovation in the field, for the opportunity to more easily attack diseases like aging and Alzheimer’s… I’d take that bargain in a heartbeat.

          1. Oblarg in reply to Erebus

            I don’t buy the “insurance companies will sort it out” argument, for several reasons:

            1) Where’s the actual financial motivation for ensuring that covered treatments work, as opposed to simply raising premiums? I don’t see it – whatever feedback forces the market might provide to push consumers towards more effective insurance companies are almost certainly going to be sluggish and fraught with exactly the same type of issues that cause this problem in the first place (if it’s so hard to determine what works and what doesn’t on a drug-by-drug basis, one can only imagine how hard it’d be to determine which insurance company covers the treatments that work best in aggregate). Right now, insurance companies certainly don’t look all that discerning to me even when they’re *not* directly paying for efficacy tests. What makes you think they’ll find it in their financial interest to front the cost for something which, by your own admission, is cripplingly expensive and often yields vague and conflicting results? Much easier to just sell people what they want to buy, even if it doesn’t work.
            2) Along those lines, who is going to pay for the studies if drug companies don’t need to do them to get their drugs to market? The economic point of selling drugs is to make money, not to cure patients. I’m not convinced there’s so much of a natural link between the two without any form of regulation to keep the incentives in line.
            3) I don’t think private insurance companies really add value to a healthcare system to begin with and would certainly hope that in a few decades they’ll no longer be part of the picture, which would render the whole thing moot.

            As much as I’d like to share your view on physicians, too, I simply cannot. It is not in line with my experience.

            The problem, as I see it, is that determining treatment efficacy is an extremely costly thing to do, and people on the whole don’t seem willing to pay for it. I am not convinced that throwing it to the free market will result in an optimal (or even remotely acceptable) solution – the situation is bad now, but it’s bad due to forces that won’t magically disappear in the absence of regulation, because they are innate to the problem of developing treatments that are better than the ones we have. Perhaps it’s time to come to terms with that and realize that if we’re going to keep improving our standards of treatment it is going to require a *lot* of investment?

          2. DanielT in reply to Erebus

            Why should the FDA even be policing safety? It is not like there is any such thing as a safe drug – at best we get to know what the common side effects are and nothing more. Anyway the level of safety a drug requires is going to depend on the needs of the patient and their appetite for risk.

            A better approach would be to remove the requirement to prove “safety” and just make it that to sell a drug you are required to list all the known side effect and their frequency. The patient and their doctor can then make the informed decision to use the drug or not.

  18. michael

    Metformin was shown to lower blood glucose in 1929, became part of the British National Formulary in 1958, and was even approved for diabetes in Canada in 1972. Was first marketed in 1995 in the US, and is now the most widely used anti-diabetes drug in the world. Probably emblematic of how risk adverse and slow the FDA is.

  19. J Tyson

    Perhaps reciprocality would be especially helpful in regulator-shopping when completely new classes of therapy are in question.

    For example, it isn’t clear whether the existing regulatory/payer system will make it commercially feasible for BIND Therapeutics to advance their BIND-014 targeted nanoparticle docetaxel if it alleviates side effects (which already appears to be the case) without improving efficacy (which might be the case).

  20. JB

    I thought Bexsero was irrelevant to the US market because the B strain of the bacterium has really low prevalence that side of the Atlantic?

  21. John Thacker

    For people who travel, lack of reciprocity can be very annoying if you’re trying to actually follow the CDC advice on travel vaccinations. There are a number of diseases where the cheapest and most effective (or easiest regimen) isn’t approved by the FDA simply because the market isn’t large enough in the US. Need to travel to somewhere where cholera is epidemic? Too bad, cholera vaccination isn’t approved by the FDA though two are approved by WHO on their List of Essential Medicines. Tick-borne encephalitis, a disease endemic to Central and Eastern Europe? Also on the List of Essential Medicines, available for 30 years. No FDA approval. Japanese encephalitis? There are vaccines, but they aren’t as effective as ones available in, yes, Japan as well as other Asian countries.

    Yeah, people can travel to Canada or other countries to get the vaccines, but there’s at least a couple of examples right there where it’s not even legal, unlike yellow fever where only certain approved clinics can give them in the US, but at least it’s available without leaving the country.

    Sunscreens, of course, are another famous example where the FDA has failed to approve products available in other countries, and there does seem to be evidence that that costs lives.

    Hard to imagine that there wouldn’t be some benefit from this in a world where certificates granting expedited review sell for hundreds of millions of dollars. Merely pointing out that the FDA is often, but not always, first doesn’t really seem to be to be addressing the potential benefits and costs of this approach at all.

  22. Anon

    It appears that Pfizer was willing design (and spend the $$ for what the FDA wanted) for their MenB vaccine (Trumenba) for better coverage in the US and Europe. Bexsero (developed by Novartis, and now owned by GSK) probably did not reach accord with the FDA on either coverage or assays. However, there was a timely outbreak of MenB on the Princeton campus and at that time the only licensed MenB vaccine anywhere in the world was Bexsero. When Biff and Muffy get sick, you can guess the rest.

  23. John Doe

    There are a number of antidepressants and other psychopharma that are approved in foreign jurisdictions but not in the US. Stablon/Tianeptine comes to mind, which is available in France but not in the US or Japan. Debatable how “high impact” it is, but people are always scrambling for atypical ADs, and this one certainly fits the bill pretty well.

  24. Sili

    Why doesn’t the legislature just make cancer and Alzheimer’s disease illegal, while they’re at it?

    Why not? It worked for pregnancy.

  25. Brian

    There are other drugs. These come to mind off the top. This is not a complete list.
    – Domperidone
    – All the racetam nootropics.
    – While hydergine is FDA approved, in much of Europe it’s over the counter.
    – There are effective vaccine adjuvants approved in Europe but not here.

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