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Drug Prices

Blame the FDA for This Fiasco

Back in 2013 and again in 2016, I wrote about Catalyst Pharmaceuticals, a South Florida company whose business plan I found repellant. That’s because said plan involved running an old generic compound (3,4-diaminopyridine) through the FDA modern approval process, which under the agency’s rules would grant them market exclusivity. I have railed about this process before; I think it’s too generous a reward for too little work and too little risk. In fact, there’s basically no risk whatsoever: a compound in this position is already being given to human patients and has been given to human patients for years (decades, in fact). You know it works. You know the liabilities and you know that they’re manageable. You already know everything that a clinical development program is supposed to tell you. So all you have to do is walk up to the tree, pluck off that sweet juicy low-hanging piece of fruit, and start enjoying yourself.

That’s what Catalyst is doing. 3,4-diaminopyridine has been given out for free by a company called Jacobus Pharmaceuticals under a compassionate use program, but that’s because Jacobus didn’t understand the modern world. The modern world is where people thought that Catalyst might charge $100,000 for a drug that they didn’t discover, that no one involved has taken any discovery risks for whatsoever, and that was already helping patients for free. But guess what? They’re listing it at $375,000. Because they can. We’ve all been watching this story as it has been coming slowly over the horizon, and here it is. So if for some reason you were hoping for some more bad press about evil, greedy drug companies, this is your lucky day. If you have the neuromuscular disease that 3,4-DAP treats, though, then not so much.

There is no reason that exploitation of a regulatory loophole should allow for this sort of thing. Rewards should be earned. But the FDA thinks so highly of its plan to take long-used generics and re-bless them that they make this possible. So although I have contempt for Catalyst Pharmaceuticals and all the other little fly-by-night outfits who are taking advantage of this same process, let’s put the blame where it belongs: on the FDA. I have defended the agency vigorously in the past, but I can’t defend this. This is stupid, this is costly, and this is wrong.

82 comments on “Blame the FDA for This Fiasco”

  1. enl says:

    When one examines the rules optimistically you get the impression that this is intended to bring consistency to the regulatory process and provide accountability for safety.

    When one looks at how the rules changes occurred, optimism begins to fade a bit.

    Looking at the current leadership does cause one to wonder if the intent was cleptocratic behaviour all along, or, at least, if it is the intent of the current leadership.

    1. Bagger Vance says:

      “…the intent of the current leadership.”

      Again, Derek evidently began posting about this in 2013, so maybe “current” leadership isn’t the fall guy here.

      However you may be onto something that the ‘loophole’ allowing this behavior may have been a feature, not a bug, in the original intent.

      btw i’m sympathetic to PharmaObserver’s points, I would just estimate from amount invested in clinical trials to term of exclusivity and try to find some regulatory mechanism that allows a profit but not a windfall profit. But strip-mining is, imho, the economic model of the times.

    2. loupgarous says:

      The posts here about this program go back to at least 2013. Before then, Barack Obama appointed an FDA agency commissioner whose husband was co-CEO of a hedge fund specializing in pharmaceuticals. That move showed more contempt for the principle of avoiding conflicts of interest at FDA than anything Trump’s done so far (including Right to Try, which has some potential for disaster). The program itself predates Obama, and so far has only succeeded in giving massive opportunities for unearned profit to savvy investors.

      Congress, if it cared, could fix this program fast. Guess who Big Pharma hires expensive lobbyists to dazzle, distract, and buy off? THEY are the “current administration” responsible for this mess. The Democratic Party, if it chooses, could use their control of the House to spearhead a correction for FDA’s bungling, and reap well-deserved recognition for a change. We’ll see if that happens.

      1. tangent says:

        Congress should certainly be getting their ass in gear, but it’s unproductive to point specifically at the Democrats for their not using their control of one chamber that they don’t actually have yet. Both chambers and the Presidency have been under one-party control if they want to do something. They’ve been sitting around doing zero on this, and I expect the new House will do zero on this and then they’re fair game too.

        This is not a D/R partisan problem, it’s a campaign finance problem. The two parties are “in bed with industry lobbyists” and “not”, and the former is in control.

        1. loupgarous says:

          I wasn’t being partisan, Tangent. I was pointing out that this is a golden opportunity for the Democrats to do something productive early on in their time as the party that controls the House, not blaming them for what’s clearly been inaction by both parties on this issue.

          Remember, from 2006-2011, the Democrats could have acted on it, while during the rest of recent Congressional history, the GOP could have done so – neither party did, to their mutual discredit. The FDA can only do what Congress allows them to do.

      2. Skeptic says:

        If the program predates Obama, why bring his FDA commissioner into it?

        1. loupgarous says:

          As an example of how nakedly conflicts of interest were ignored by someone who promised “unprecedented honesty and transparency in government”. Not that this excuses the other large party, or their people in Congress and the White House, but the closed-door meeting between PHRMA representatives and Mr. Obama in 2009 preceded eight years of utter inaction on this issue, just as no GOP president acted on it or asked Congress to act on it, before or after Obama.

          For all the rhetoric over the cost of pharmaceuticals and its impact on the public health, neither large party has done as much as convene hearings on the abuse of the program Derek mentioned in this article, that I’m aware. Several people in this comment space have commented on why that probably is, if you follow the money and lobbying effort.

          1. loupgarous says:

            I take it back. Congress did have hearings almost three years ago, looking into Turing, Valeant, Gilead and other price-gouging Pharma firms.

            Which makes it all the more remarkable that, having looked into the situation, they did nothing to alleviate the problem posed when the market exclusivity FDA grants firms that do safety and efficacy studies on grandfathered drugs allows price-gouging.

      3. chemist says:

        The Democratic party will use their control of the house to introduce virtue-signalling legislation that will never pass, and launch numerous frivolous investigations into the President and anyone tangentially associated with him. Don’t fool yourself.

      4. Bretta says:

        True dat

  2. Barry says:

    In 2005, Roy Vagelos (retired head of Research, Merck) predicted at a GRC that maneuvers like this (and mere high prices for actual novel drugs) would provoke federal intervention on drug prices. He’s no fan of government regulation in general, but he flatly blamed an industry that’s now run by marketers and lawyers, rather than by scientists.

  3. anon II says:

    Can anyone here comment how much putting this compound through the FDA approval process might cost? If the cost of the approval is the cost of all the product sold, amortized over the exclusivity period, with some overhead for administration, I’m relatively ok with this.

    1. CB says:

      I don’t have real figures, but I assume the filling costs are minimal to the clinical costs. My complete guess would be 10s-100 million combined. I have no problem to recover that administrative and clinical cost, but the excessive profit over that on a drug that was invented by someone else 30+ years ago. It’s legal though, and will continue until the law is changed. It’s like Mylan and the Epipen price hike. They had a legal monopoly because their competitor was recalled, and they took advantage of the situation.

      1. Hap says:

        Someone (who I assume owns Catalyst stock or is financially vested in them) claimed on Twitter that they spent $100M; I’m not really disposed to believe them, but I don’t have enough (any) data to disprove that number.

        1. Thomas says:

          I can spend as much as I need to – via my partner company. Perhaps this partner company will even finance this transaction via a royalty on sales so I do not even have to make up the amounts.
          I just state: MyBrother Inc. ran the tests @ $100M. Here is my debt.

        2. Shari says:

          So, with 200 people needing this, and 100 mil to recoup, at 375k each person, each month…. they will recoup their investment in less than 2 months. Even given administrative and production costs it’s not going to take more than 6 months… giving them more than 6 years of more than half a million PURE profit a month. At the expense of a few lives.
          This makes me feel ill. I’m glad I’m not an investor in this company.

    2. Retired from both Industry and FDA says:

      I once saw a slide deck from GPhA (before they changed their name to Affordable Medicines or something like that). Not long ago. They claimed a cost of $5-15 million to launch a generic. I assumed the 15 million was when they had to hire a crew of slimy lawyers to break the patent.

    3. loupgarous says:

      The figure I heard 20 years ago when I was working in the business was that the clinical trials process averaged $300,000/day for all costs.

      So, if a clinical trial runs a year, $300,000/day times a year comes to just under $110,000,000.
      Some of the studies I’ve worked with ran more like 18 months.

  4. Bob Seevers says:

    If the FDA wanted to do something about this, it could dispatch a small army of inspectors to Catalyst and it’s contract manufacturing and research organizations, letting them know that the regulatory colonoscopy would continue until the price came down. If they wanted to do something about this.
    While you are blaming FDA, how about some rotten tomatoes for Congress? They are the ones who created the legal setup for this.
    “America has the best politicians money can buy.” Will Rogers

    1. Pedro Arrechea says:

      While I may be sympathetic to that viewpoint, that is also an abuse. The “inspection apparatus” is not there to be used as a means for which to punish actors which you do not like.

      1. BK says:

        While I agree with you, the FDA absolutely used this tactic against Ben Venue Labs. I forget what the official claim was, but a few insiders told me that the local inspector felt like he was treated poorly by Ben Venue, so he went to DC to complain and that’s when the national regulators came in and essentially closed the place down with 483s, but oddly, the place was still allowed to manufacture Doxil for quite some time after the consent decree.

    2. Emjeff says:

      Did you read what you just wrote? You actually think that’s a solution? That is a scary, scary belief.

  5. CB says:

    And people wonder why their health insurance premiums go up, because of this profiteering scheme through legal but immoral reasons to capitalize on a rare condition treated by a undeniable generic drug. The only up-side to this is the access to 3,4-DAP will be better without needing to appeal to FDA compassionate use or finding the right compounding pharmacy. However, I do think the FDA can tighten up the policy to grant approval to generics of rare/orphan diseases.

    I get pestered by family and friends about drug pricing all the time. They don’t understand that billions of research dollars go into many projects that fail throughout the development cycle. I explain the cost of that pill you take, is covering not only the cost to make it, but all the years of research to develop it and about a dozen failed projects that could have made a difference in your health. The Turing’s, Valeant, and Catalyst’s buy old cheap generic drugs and rebrand it because it is still in use by a handful of people that get it nearly free. It’s capitalism run amok.

    1. Bagger Vance says:

      Does anyone know if these repurposed drug trials have success rates similar to novel pharmaceuticals or are the results virtually guaranteed ?

      Perhaps i just never hear about the ones that fail and the Turings et al take a bath?

    2. Skeptic says:

      “And people wonder why their health insurance premiums go up”
      Drug prices *are* a problem, but most healthcare dollars go elsewhere, right?

  6. PharmaObserver says:

    It is interesting that you and other media outlets (STAT) so blatantly ignore the facts of the situation or twist them in contorted ways. For all your years in Pharma, you have clearly never understood regulatory or even the basic approval process. Let’s dive through your very poorly written article which deserves a retraction.

    1- Jacobus didnt take their role seriously and that’s what happened. They were profiting for years by selling thru EAPs/CUPs and not abiding by the responsibility associated with doing so, which is your intention should be to seek FDA approval. Jacobus should’ve have sought approval and taken that responsibility seriously. They were distributing drug thru EAPs/CUPs but and charging for the product (albeit small $). These programs are designed where the sponsor is seeking approval of the product. They failed in doing so. You of all people should know this well given your employer history (Vertex/Novartis).

    If everything is so well characterized as you say, why didn’t FDA bless Jacobus’ with approval at some earlier date????? They ran a study and clearly met with FDA. They just try and wiggle out of doing the work necessary for approval but still want to sell the product.

    2- Don’t give me this mom & pop spiel either. Jacobus sold Dapsone for years (sales ~10M for some years). They had the cashflow to take it seriously.

    3- “That’s because said plan involved running an old *generic* compound (3,4-diaminopyridine) through the FDA modern approval process, which under the agency’s rules would grant them market exclusivity. I have railed about this process before; I think it’s too generous a reward for **too little work and too little risk.** ”

    Point A– It is a not a *generic* medicine in the US, since it has never been approved here. It is only generic in Europe after Biomarin sought approval. As you will know very well, regulators need a consistent label(dosing/safety/efficacy) and product characterization. Sorry regulators dont trust academics and their claims of efficacy/safety. (Also, who demonstrated the nonclinical profile was safe??)

    “I have railed about this process before; I think it’s too generous a reward for too little work and too little risk. In fact, there’s basically no risk whatsoever: a compound in this position is already being given to human patients and has been given to human patients for years (decades, in fact). You know it works. You know the liabilities and you know that they’re manageable. You already know everything that a clinical development program is supposed to tell you. So all you have to do is walk up to the tree, pluck off that sweet juicy low-hanging piece of fruit, and start enjoying yourself.”

    Point B– The FDA made Catalyst run not only 1 Phase 3 study , but an *additional* Phase 3 study! This is on top of the all the work that Biomarin had done previously.

    Your assertions about everything is there and so easy are ludicrous and BS. If it were so obvious, FDA would have approved based just on the work that Biomarin had done and spared patients/doctors the time of the Phase 3’s.

    4- They are actually running studies to broaden approval to other disorders (CMS as an example) that Jacobus was just trying to sell product thru (again abusing EAPs/CUPs) and not further the science to help out patients.

    5- I would only agree that the pricing is very surprising with today’s current climate. I had thought it would be in the 100-150K range.

    6- FDA does deserve some blame, but maybe goes back to Congress. If as you say, this was so easy and we could rely on 3rd party reports of its wonderful efficacy, maybe we should re-write the laws to make it easier for approval……

    You should stick to science commentary, not regulatory since you clearly have never listened to your regulatory colleagues or even public policy on the matters.

    1. hmmm says:

      Nice try Catalyst Pharma CEO, nice try

    2. Jim Hartley says:

      Insulting Derek will not get you very far here, partner.

    3. Anonymous says:

      I like how even the Catalyst Pharma plant agrees the price is kinda high.

    4. even more anonymous says:

      Maybe PharmaObserver should stick to observing, and not attempting to engage in civil discourse since their self-sabotaging vitriol undermines credibility.

      1. PharmaObserver says:

        I agree with you and apologies for some of the rudeness. It’s just incredibly frustrating to see such lack of objectivity in his and others posts on the matter but they want to be taken seriously and as an authority on the subject matter. Some people try and work from the facts, that hyperbole to make a point.

        Disclosure – No affiliation with Catalyst. Hilarious that someone pointing out easily looked up facts is accused of working there.

      2. CMCguy says:

        Actually PharmaObservers point all seem to be fairly valid in terms of satisfying FDA in regards to products that have been approved and long used outside the US. The FDA Reg system claims to be science based however the FDA bureaucracy will ignore well conducted studies and info if the current “extreme” standards were not applied without due consideration of the real and reasonable value therefore demanding extensive duplication of efforts (and drug development with a couple Phase 3s would easily reach $100M for most indications). I do agree much fault should be directed toward Congress with inconsistent direction and support.
        I do not wish to insult Derek, whom seems somewhat more aware than most, but the majority in Discovery have little concept of what is truly involved in the subsequent Drug Development/Clinical Trails then dealing with FDA and other Agencies where Logic and Science and even published Guidances do frequently take a back seat removing any certainty on actions

        1. Derek Lowe says:

          Takes more than this stuff to insult me! I definitely understand your point about the difficulty of running good clinical trials. My “low-hanging fruit” comment didn’t refer to an easy collection of clinical data, but more to the almost-completely-derisked-before-some-of-these-guys-were-born nature of trial process itself in this case.

    5. Barry says:

      The power to grant market exclusivity is a proper power of the USPTO. It cannot be delegated. Regulatory agencies (e.g. the FDA) can recommend extensions to patent life for time lost in regulatory matters, but the power and the decision rest with the USPTO.

      1. Mike says:

        The FDA can grant market exclusivity for unpatented compounds but not approving any other products for a given time period.

        For example, the orphan drug act gives 7 years of market exclusivity.

        That’s separate from patent protection.

    6. loupgarous says:

      Actually, Derek’s spot on here. We have a program we’ve known could be used to milk the consumer (through their insurance companies and any tax-supported procurement of generics which are sheep-dipped through FDA’s approval process and become $100,000-$500,000/dose “miracle drugs”).

      THREE different administrations saw this slow-motion train wreck in progress and the only action anyone took was because Martin Shkreli was careless enough to commit securities fraud, thus proving bad karma is effective.

      Your only truly good point here is that Congress could have done something about this years ago, and did not – because Big Pharma lobbies the crap out of them. Or perhaps into them.

    7. Canafa says:

      Look at the proposed outcome: a drug that worked reasonably well for decades has become either unaffordable for some who it would undoubtably help, or has blown out US healthcare costs. You can blame the author of the article, or the FDA, or congress for that matter. In all cases, the outcome is sick in every case. Blaming everyone but the current FDA/profiteering drug company/congress (who’s left??) as an aggregate is a big failure for the ultimate recipients: patients. Sorry, but we need to allocate blame a bit more thoughtfully than this – and then at least attempt to fix the situation rather than whinge about everyone else’s problem. Can’t you see this? It’s the only aspect of this sorry state you don’t seem to address, which makes it very odd indeed.

    8. Ginny Boynton says:

      I received my DAP totally free from Jacobus for almost 18 years. It didn’t want to spend the money to get FDA approval because there were so few of us, and they preferred to help rather than burden us or themselves with the added cost.

  7. cynical1 says:

    I think the situation could be easily rectified by the FDA (or Congress) putting a price cap over manufacturing costs for the drugs in this category. That way, there would not be the price gouging that is occurring but still incentive for legitimate players. Alternatively, you could just limit the market exclusivity to a certain price range for the drug. (If generics could sell for the same price as branded patented drugs, they would. It’s competition that brings down the price.) This is something that Congress or the FDA could/should rectify with bipartisan support in short order.

    IMHO, it’s not a bad idea to have well controlled trials for old generics that were never approved by the FDA to assess safety and efficacy. I probably won’t get much argument about that, I would hope. You have to incentivize it somehow. But you should also anticipate that someone is going to game the system if they can.

    It is also my humble opinion that politicians need talking points that all their constituents (sorry, I meant to say “base”) can rally around and that they can point fingers at but never do anything about either. This is one of those examples that exemplify how our political system is so broken. Elect clowns, expect a circus.

    One other point, I don’t understand why any of the major Pharma companies have not taken advantage of this loophole. It’s not like any of them really have much of a reputation to tarnish at this point. They always bemoan the cost of R&D failure, why don’t they take advantage of the low hanging fruit? Are they all just that dumb? There’s nothing to keep them in any way from participating in this approach and use the money to fund their “innovative” drugs.

    1. Anonymous says:

      cynical1: (1) manufacturing costs are a MINOR component of the cost of most (small molecule) drugs. A price cap would have little impact, IMO.

      (2) Other companies / loophole: I don’t know if this fits your question, and DallasBuyersClub comment about the low cost of non-Rx grade DAP, but Biogen got FDA approval to sell dimethyl fumarate (as Tecfidera; see wikipedia) for MS. A year’s supply of dimethyl fumarate from a lab supply company would cost less than $300 [not for human use!!!]; as a drug, it costs (before discounts) $55,000/year. See In the Pipeline “Tecfidera’s Price” from 2 April, 2013. Dallas: compounding pharmacies had better not be putting research only grade drugs from alibaba or Aldrich into pills for people.

      1. cynical1 says:

        Anonymous – I realize that manufacturing costs with these types of old drugs are negligible. With small molecules, that is usually the case. But at $375,000 yr., I think they are going to recoup their ~$100,000,000 clinical development costs with less than 300 patients in a year. Everything beyond that is pure profit for the rest of the exclusivity period. The price cap should reflect development costs and manufacturing costs if they were to be excess for a particular drug (which in these situations with very old drugs is usually very small to negligible).

        The dimethylfumarate case with Biogen is not relevant to these cases. Biogen took on the risk of clinical development and they own the “use” patent for the compound (through acquisition I believe). I think dimethylfumarate was originally used as a mold retardant in furniture. It was used topically in psoriasis for awhile but never approved in the US. It wasn’t being used as an (oral) pharmaceutical until Biogen showed that it had efficacy in MS. The cost, ostensibly – and I will not debate drug pricing -, is due to taking on the clinical risk of failure as with any new drug in a new indication. The lack of substance of matter novelty is immaterial. The efficacy of these old generic drugs have been pretty much established. These companies are not coming up with new indications at risk.

    2. FDA has no authority to regulate prices.

      1. Anonymous says:

        Robert is absolutely correct on this point.
        Congress has purposefully blocked all possibility of price negotiation between the FDA and sponsors for one very simple reason – When you have complete control over the market access of a product and the ability to negotiate its price, you are not really “negotiating” – You are imposing the terms of the sale.
        When Congress finally decides to put a cap on the financial shenanigans of our beloved sponsors, it will have to be done by another federal or private entity. On should not judge programs designed to provide access to unapproved and mainly neglected chemicals solely by the abuses of a few select individuals (Hi, Martin shkreli).
        It is often more practical to simply have state attorneys start looking into their general business practices since greed and unethical behaviors do not appear to be exclusively limited to drug pricing in the pharmaceutical industry.

  8. Earl Boebert says:

    Well, with all due respect and as an outsider (albeit a member of the general Pharma “your money or your life” target market), I would submit that a relatively small percentage of the blame accrues to the FDA for making predatory behavior possible. One could conjure up many more or less inflammatory analogies but simply stated my view is that the blame for predatory behavior rests on the predators. I would be interested in having industry insiders estimate the cost of whatever hoops Catalyst and its predecessors jumped through, the market size, and the consequent ROI.

    1. a. nonymaus says:

      The simplest thing to do would be to ask them. Behind every discovery, there are people who we must praise. Behind every business decision, there are also people. Let’s not talk about Catalyst Pharmaceuticals, but about the fine people who want to transform the treatment of LEMS and CMS.
      The Board of Directors:
      The C-level management:
      The Scientific Advisory Board (Academic MDs who treat LEMS, check for any of your colleagues you might want to have a talk with):
      Let’s see how well McEnany, of Coral Gables, likes being as well-recognized for his contributions to medicine as Shkreli.

      1. dearieme says:

        When I first saw the expression “C-level management” I gasped, because I knew Americans are prudish about foul language. Then I discovered that the “C” stood for Chief.

  9. Harrison says:

    An e-mail from Jane Goodall to Scott Gottlieb got the FDA to shutdown addiction research in non-human primates at their Arkansas facility. I wonder who needs to e-mail Scott to get this taken care of?

  10. complexgenerics says:

    The “reblessing ancient generics” loophole, and its cousin the “complex generics” loophole, give a bad name to the whole industry and enable the worst kind of predatory behavior. Everyone loses — patients, physicians, families, and the industry — except the execs of the offending companies. Without these loopholes, you don’t have Martin Shkreli, you don’t have Epipen, you don’t have Marathon / Catalyst / Questcor. I applaud Derek for taking such a strong stand here. It ultimately falls on FDA’s shoulders to address this, and there are definitely things that can be done to fix this.

    I was close to a few projects trying to develop a “generic” version of another ancient drug that a “modern” company bought for a pittance and then increased the price from $300 / year to $300K / year — without doing any original scientific or clinical work. It was a very complex regulatory area with no real precedent — there were several chemically similar compounds approved decades ago with the same label as the offending drug, but those products had been withdrawn from the market because they were money losers (the offending product was withdrawn from the market as well, but it was the last one to leave, and it was the only good drug for a serious disease, so physicians made a stir and the company kept selling it at a loss). There were no batch records / DMFs / useful data available on the products, so the pathway to reviving the products was unclear.

    Because these potential “complex generic” drugs would be much cheaper, and would have no patent protection, they wouldn’t make much money. The investment case relied on getting these drugs approved through a process that cost basically as much as an ANDA. Anything more costly and no investor would fund this.

    From what I heard, FDA had several opportunities to work with these companies to bring some of these products back to market and give patients more options (ie lower the cost of the drug by 90%+). Some of these drugs were actually probably safer (highly pure synthetic vs poorly characterized mammalian product) and certainly would have been better characterized. Most of these drugs were approved but withdrawn for commercial reasons. However FDA made it difficult for these companies. For example one company even offered to do a controlled clinical study of their drug (which was more than the offending company did). But from what I heard they were told it would have to be a placebo controlled study instead of using the approved drug as a comparator and doing a non-inferiority study. For a severe pediatric disease it was not ethical to do a placebo controlled study and it would never enroll. Another company was told that FDA could not engage until a citizen’s petition was responded to. The CP was outstanding for years, well past the 180 day statutory deadline. After the company pressed for a response to the CP, FDA ultimately withdrew the original approval of the product in question basically saying the product was not approvable based on modern standards — by that logic the offending product would not be approvable either, but for some reason FDA decided to work with the offending company to create a way to retain the approval but not any other.

  11. RandomWok says:

    Can anyone pinpoint the time in popular culture when Big Pharma took over the role of evil villain from Big Tobacco? In my opinion it was when the Harrison Ford movie “The Fugitive” was released in 1993, with unscrupulous, murderous executives. Ever since, the Shkreli’s and Mulye’s have only added fuel to the fire. In Rx retail, we’ve put up with price-gouging complaints way back when guiafenesin and colchicine went “exclusive” after their grandfathered status was hijacked.

    1. Ted says:


      Direct to consumer marketing in 1997. I was at Upjohn at the time, and even within our big pharma ranks, there was a sense that this was a bad idea. It was, and still is.


      1. Anonymous says:

        A minor historical point: I go back the Eli Lilly’s “DTC” marketing of Oraflex in 1982. DTC was not legal, at the time, so Lilly used “news” and “press kits” to create product demand. Lilly-paid celebrities were being “interviewed” (from the Lilly supplied press kits) on all the morning TV news shows (by the trusted news hosts of the day) and elsewhere: not ads; interviews! “My arthritis was incapacitating but then I took Oraflex!” (I think there were Oraflex success stories, not ads, in places like Reader’s Digest magazine but I can’t search for them now.)

        Oraflex had the fastest product launch ever up to that time, d(prescriptions)/dt was huge. Patients were asking their doctors for Oraflex before the doctors even knew what Oraflex was.

        Oraflex went on sale in May 1982. By August 1982 it was off the market due to too many side effects, including multiple deaths. There was a Congressional investigation. There were criminal indictments of Eli Lilly employees who failed to provide the FDA will relevant data prior to approval (e.g., numerous adverse reactions AND DEATHS in other markets where Oraflex was already approved and on the market).

        So Oraflex was pre-DTC. DTC became officially legal in 1985 and then expanded with lesser controls in 1997 and made even easier in 2004.

        1. Barry Haskell Levine says:

          DTC was never illegal in this country. It was widely assumed that forbidding marketing to the public would violate 1st amendment free speech rights (that was never tested in court; I think the analysis is wrong). The “ban” on DTC was merely a “gentlemen’s agreement” among the Drug makers that it would be a bad ideas (it was). But after minoxidil, the genie’s out of the bottle.

          1. Minoxidil went OTC Feb 1996 – not the focus of the 96-97 lobbying efforts.
            The 1997 FDA change was just in time for Viagra’s March 1998 launch:
            Historic article:

        2. loupgarous says:

          My grandmother died from Oraflex-related multiple system organ failure. When, 14 years later, I worked at (but not for) Lilly, I’d hear guys I worked with who were around for Oraflex say “Well, the patients would figure ‘this much works, I’ll take more and it’ll work better’.”

          Unless that involved using Oraflex on your toast as a really nasty spread, that was largely self-serving bullshit, but at the time my wife and kids needed the money I was making there, so I kept my mouth shut. It didn’t take much to get a bad name at Lilly if you were a contract consultant.

    2. Opinionated says:

      I agree. Merck hired former Olympians Bruce Jenner and Dorothy Hamill to push Vioxx in 2000. The company’s reputation (and many of my stock options) were irreparably harmed a few years later with collateral damage to the whole industry.

      1. Nick K says:

        Look what Vioxx did to Bruce Jenner. He has never been the same since.

    3. loupgarous says:

      Unscrupulous is how much of Big Pharma rolls, from what I’ve been able to see. The days of Burroughs-Wellcome selling medications to finance tropical medicine research (which is how we got Daraprim to begin with) and Colonel Eli Lilly introducing the concept of “ethical drugs” are long gone.

      Now, the cost of clinical studies and other work to support new drug applications and the ~90% failure rate of drugs in the final stages thereof means that prices for the drugs clear the NDA hurdles must support the cost of risk-taking with drugs that turn out to be less-than-acceptably safe or effective. But it’s still worth us asking Congress to step in and fix the situation Derek’s describing.

      I wonder if we’re looking at this upside-down. Here, we’ve discussed price caps, caps on compensation for studies, even Federalizing the business of clinical studies to remove the justification for sky-high pricing on orphan and grandfathered drugs. Some of those solutions, possibly in combinations, might work.

      But it’s also worth pricing out each of the proposed solutions and studying other alternatives.

      How about allowing the Federal government first refusal on rights to grandfathered or orphan drugs, and allowing the government to buy those rights for the audited cost of the studies plus a reasonable mark-up, with the understanding that NO market exclusivity would exist for that drug. Manufacturers wishing to make and sell these drugs would pay a royalty to FDA to fund future clinical studies.

  12. Dallas Buyers Club says:

    It’s $1 to $100 per gram on alibaba. Is there anything preventing compounding pharmacies from stepping in here?

    1. ScientistSailor says:

      Quality Control

    2. loupgarous says:

      Good Manufacturing Practices regulations.

      Correct me if I’m wrong, but do many compounding pharmacies even have the analytical equipment to verify AliBaba-sourced chemicals’ safety and purity?

  13. Billings says:

    Enjoyed greatly reading the comments…most appreciated is the point that 3,4-diaminopyridine was never an approved generic in the US. It is the “generic” name of the molecule, but not FDA-approved as a generic. Confusion/conflation in the media and among some lawmakers over true generics (FDA-approved ANDAs) vs. old, off-patent brands, such as Turing’s Daraprim, has been plaguing the generic industry for the past few years.

    1. Tnr says:

      This is the key point. Since it was never approved in the US, FDA has to require a full regulatory package, which is extremely costly, as the basis for approval. Novelty or lack thereof is not relevant.

      Whether FDA should have more freedom and flexibility in approval of drugs for rare diseases is a separate issue.

      1. loupgarous says:

        And a matter for reasoned debate in Congress.

        Yeah, right.

  14. AlloG says:

    You should be allowed to partake in drugs of MW less than 180.16 for free, with no Bobbys watching. Take dat you Caplist Dogs!

    There. Problem Solved.

  15. Bruce Quinn says:

    I’m not sure the headline “Blame the FDA” is entirely right. FDA has to apply laws they are given by Congress, when a company comes up and has a series of circumstances and evidence that meets those laws. If you have situation A,B,C, and laws D,E,F apply, and you have evidence G, H, I, I’m not sure that FDA can control either the approval process or pricing later.

  16. Patrick Sweetman says:

    It I needed it, or my family needed it I would buy 500g of it from China.

    1. loupgarous says:

      And trust the Chinese supplier to sell you what you paid for? Whose lab instruments will you use to verify its purity, and especially its absence of toxic contaminants?

      If you work in the industry or at an academic lab and trust your analytical skills with a loved one’s health, fine, you can do that, but it’s an option that’ll get shut down in a hurry for a number of reasons, including potential institutional liability and the misuse of facilities.

      And most families of people who can’t afford $375,000 for treatment of Lambert-Eaton Myasthenic Syndrome (or other “orphan diseases”) don’t have that option at all.

  17. Sxa says:

    I use dimethyl fumarate for psoriasis and can’t even get the German formulations here.

    Coal tar for the same condition went from otc @ any pharmacy $7 a pint to over 1000 if you could find it. I get the same Humco labs product online now for 70

  18. knowentrestoisafraud says:

    But when Novartis does it with diovan (valsartan) with lots of marketing hooplah and a magic additional compound (Lets call it Entresto) in the mix……’s ok?

    1. simpl51 says:

      Well, Knowent: I worked for Novartis till I retired, and had the same sceptical feeling when I first heard of the project. The magic additive had been researched and FDA finally said the single compound had too serious side effects as a class, and put a clinical stop on them. However, first results were showing that it’s side effects were mitigated by the combination, so it then looked unlikely, but worth a shot. After convincing the FDA to be open-minded, the results were good, even very good, enough cardiologists were convinced, and the product was approved. The initial launch underperformed, and family doctors weren’t convinced that a changeover was a significant step forward for their patients on existing treatments, hence the marketing hooplah.
      So in my eyes, Entresto is more than ok, it revitalised a new class of chemicals. And our collective scepticism is perhaps deserved, but adds to the cost of development.

      1. Genericrepatenter says:

        A lot of people beg to differ, the trials themselves are considered suspect by many, even laughable, the head to head against valsartan alone appears rigged.
        The marketing comparing an arb to an ace inhibitor is blatantly misleading, something already widely known to say nothing of the effects of not putting those with COPD and CHF on ace inhibitors.
        Those benefiting would find it so from switching to just an arb period, any old arb.
        This is a discussion thread about why the cost of meds is so high and this company re packaging and re patenting a generic they recently lost patent protection on is a prime example.
        If you burn your insurance company getting them to pay for such a thing they will only cut you off later for something else.

        1. loupgarous says:

          “This is a discussion thread about why the cost of meds is so high and this company re packaging and re patenting a generic they recently lost patent protection on is a prime example.”

          As Senator Richard Lugar (R, IN) tried to help do with Prozac (fluoxetine), trying to extend Lilly’s market exclusivity legislatively, while a six-year battle raged between Lilly and generic manufacturers in the courts over market exclusivity on fluoxetine. Lilly wound up re-marketing fluoxetine for PMS (“Sara-Fem”) and in a weekly dosage option.

  19. MALLAM says:

    If this type of price gauging isn’t able to be dealt with fairly by FDA in watching out for the interests of both patients and companies, then this is the type of chicanery that Congress should take action to limit the price gauging. Yet, while individual members tend to spout, puff, snort and blow, nothing still has been attempted as a remedy or resolution (except to take away access of health care from millions, withdraw support to protect from preexisting conditions, and continuing the decades old battle of trying to regulate birth control). Shameful.

  20. Chris Phoenix says:

    OK, so there’s a chemical that isn’t recognized as a drug in the U.S., and people are eating it to improve health. Sounds like a nutritional supplement to me.

    And then the government gets interested in whether it’s safe and effective. Why can’t the government just run its own study, funded according to the urgency of the question (the plausible likely harm done and number of people involved), designed however it wants within the available funding?

    And then publish the results (assuming the study was actually worth doing at all) and let doctors decide what to do about them? And if the doctors (and/or chiropractors etc.) want to keep advising people to take this chemical, then vitamin/supplement companies can decide to manufacture reliable dosages – to pharmaceutical standards, even – charging enough to recoup their manufacturing costs and then some.

    I’m not a lawyer or an economist, so maybe I’m missing some harm or inefficiency or illegality that would doom this proposal…?

    1. loupgarous says:

      If the system works as advertised, it might be an improvement over the current system to have FDA conduct safety and efficacy trials. The expansion of FDA’s payroll to include the current workforce of data analysts, statisticians, medical experts and project managers, if it were transparent and not used as a jobs program (as DoD procurement and basing too often is), might be a good thing.

      But I don’t believe it’d work that way. Big Pharma would just be able to tweak safety and efficacy reporting at that level by getting friends in Congress to defund the program, the way the meat industry had the Republican Congress of the 1990s-early 2000s reduce and in some cases defund meat plant inspection entirely. Even leaving Snidely Whiplash out of the picture, there’s no guarantee that Federally-performed safety and efficacy trials would be cheaper or better than what’s done now.

    2. JI says:

      There is a reason to pull the line between drugs and food supplements.
      However, it makes sense to have some regulated, organised way to exclude predatory pharmaceutical companies, not necessary by direct governmental involvement.
      It would make sense that some public-private initiative would take care to do modern approval process, bring “generic” drug on the market and open the space for real generic companies to provide drugs. Price for generic version would be market determined in the process how generic drugs are usually priced.
      With private public initiative I have in mind public (governmental) funders, private funders and pharmaceutical industry.
      Having in mind that there are relatively few oder drugs which would need such support, how much money is around in this field, it might be feasible.
      Always, since outcome of the procedure is clear, scientifically sound confirm what is already known, it would be just solid exercise in the registration of a drug (non-trivial, still costly, but not comparable to a first in class registration, I mean only registration, not even thinking about development)

  21. Emjeff says:

    ” In fact, there’s basically no risk whatsoever: a compound in this position is already being given to human patients and has been given to human patients for years (decades, in fact). You know it works. You know the liabilities and you know that they’re manageable. You already know everything that a clinical development program is supposed to tell you. So all you have to do is walk up to the tree, pluck off that sweet juicy low-hanging piece of fruit, and start enjoying yourself.”

    Oh yeah? Let’s talk about estrogens for the treatment of menopausal symptoms. Everyone also “knew” that estrogens were cardioprotective, and they were given to every menopausal and post-menopausal woman for years. What happened when it was finally studied? Oops, no cardioprotective effect , and estrogens may increase the risk of breast CA. Don’t like that example? Let’s talk about the CAST trial – everyone “knew ” that if you controlled PVCs you would reduce the risk of sudden cardiac death. Guess what? Controlling PVcs in the CAST trial was associated with increased death. Oops.

    Do you understand now why you do these studies? It’s not what you don’t know, it’s what you think you know that ain’t so…

    1. Derek Lowe says:

      You make a good point, one that’s worth another blog post on its own. . .

  22. Gary Levine says:

    This type of criminal behavior no matter how justified make me ill.

  23. cmstop says:

    that is really weird!!!

  24. randall l thornton says:

    Good discussion. The hidden cost of medical care through insurance allows distorted pricing in outpatient and inpatient care. When we have to take our wallet out do we question cost. Few would suggest that a patient take out thousands for a drug for care. Yet with insurance the copayment is all that is questioned.

    Drug importation will help. International drug price discovery will help. And approval of international studies by the FDA when a product has been safely used for years will help.

    I like the idea of a FDA drug study arm.

    And maybe Congress will do some good work next year in this area. You guys with a solid background will hopefully give good ideas and advise.

  25. Susan Stuart says:

    We have known for a long time the FDA is in the pocket in Big Pharma. The companies pay for FDA research so is it really suprising. It happened with marijuana during AIDS epidemic. The reason, it was banned. So big Pharma could produce a synthetic, not because it was a danger to Society. Just like they are trying to do with CBD oil. Just like they did when Midrin lost it’s patten. Took it off the market, because efficacy was in question, after years and years of use. Then put it back on under new brand name. As a pharmacist for 40 years, FDA is a joke!

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