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Drug Prices

Catalyst Sues the FDA

So now we have another couple of twists in the Catalyst/Jacobus story (for background see these earlier posts). Jacobus, now that their version of amifampridine (3,4-diaminopyridine) has been approved by the FDA, has announced their price for the drug. And it’s definitely not the price they had before, which was free to the few people who needed it, but it’s still below what Catalyst has been proposing to charge. Jacobus is at $80 per 10mg tablet, which is less than half the Catalyst announced price. That’s what the FDA’s reward system is set up to deliver, whether they intended it or not.

But there are complications: no one is sure whether Jacobus actually has the infrastructure to deliver on the product now. One has the impression that the previous distribution was sort of a mom-and-pop operation, but hey, they’re a real drug company now with an FDA-approved drug, so everything has become much more complicated and expensive. Adding to the confusion is that Catalyst yesterday announced that they were suing the FDA for having approved the Jacobus drug at all.

Catalyst says that the agency is basically encouraging off-label use with that approval (Jacobus is approved for pediatric patients, and Catalyst is approved for adults), and that the approval was “arbitrary, capricious, and contrary to law”. My own take is that regulatory agencies can be arbitrary and capricious while remaining completely within their legal mandate – that’s what makes government so much fun – and that the FDA was within their authority to approve the Jacobus product in the way that they did. Should they have? That’s another question, but that’s not one that a court of law is going to be able to address.

Approving the same drug, from two different manufacturers, for different indications is indeed a bit odd. But I don’t see where it’s illegal. And US law most definitely allows for off-label prescriptions, at the discretion of physicians (and at the discretion of insurance companies, etc., to pay for them). So the biggest issue that Catalyst has to argue doesn’t (to me) look like something that they’re going to be able to make much headway on. Now, outside of the letter of the law, we have another argument: did the FDA approve the Jacobus submission in the way that they did in order to try to mitigate what they did by approving the Catalyst one under their incentive program to approve old compounds?

I think they probably did – but there’s certainly no way to prove that. And again, even if they did, the legal reply would probably be “Yep, and they can do that. Next!” But it’s true that it doesn’t increase anyone’s confidence in a government agency to see them acting like this, either, and I think that (in general and in the long term) it’s a bad thing for the FDA or any government agency to be seen as capricious and willing to bend accepted practice around when it suits them. No matter how satisfying one might find any individual decision. Eventually the rules become suggestions, and the laws all have an unspoken coda of “unless you don’t really feel like it”, and that’s no good, either. I don’t think this Jacobus approval does much harm, but (from that standpoint) it certainly doesn’t do any good, either. I felt the same way during the Pfizer/Allergan takeover fight, even though my sympathies for Pfizer otherwise are pretty minimal.

We already have a problem with having so many laws and regulations that compliance becomes a full-time occupation (see the IRS and OSHA for canonical examples, and there are plenty of others). Eventually you reach a point where everyone can be found to be in violation of *something*, and you live at the sufferance of the authorities, who might change their minds at any time. And this is a slow slide into an extortion racket: that’s a nice little business you have going there. . .wouldn’t want someone to come along and enforce Section 89(q) Part 14 all of a sudden, now would you? Real libertarians consider me a fair-weather friend, but this sort of thing really does get me going.

Of course, the cause of all this Jacobus/Catalyst brouhaha is the regulatory state that we have already. But here’s where I do part company with the radical-libertarian fashion, whose answer to this is “Well, ditch all that stuff”. I don’t want to ditch all that stuff. I think that doing so would be an invitation to even worse behavior, probably because my opinion of what people are capable of getting up to is a rather low one. What I want, instead, is for the law and the regulations to continue to improve as new issues challenge them. I think the FDA bungled things by rewarding companies too richly for being willing to take ancient compounds through a modern trial, and they’re coming close to bungling things again in a veiled attempt to make right the unintended consequences of that one.

23 comments on “Catalyst Sues the FDA”

  1. Vader says:

    “Real libertarians consider me a fair-weather friend”

    Pretty good description of where I’m at, though I suspect with significant differences in detail

  2. Philip says:

    As a left of center occasional poster at this site, I don’t always think that capitalism is the best solution to a problem. If the problem is running old drugs through modern trials, I say let the government* do it. The award to private enterprise is way to costly to those who need it.

    As for everyone being in violation of *something*, just look at some of our traffic laws. Driving through Atlanta on I-75, you will be in violation of ether speeding or holding up traffic.

    * OK, let the government contract to private enterprise to do the trials.

  3. Nick K says:

    I am so glad I have nothing whatever to do with Regulatory Affairs.

  4. Thoryke says:

    Would looking at the arrangement that existed for epoetin alfa be instructive? Ortho Biotech had authorization to sell the drug (as “Procrit”) for cancer, chronic kidney disease, and addressing the anemia caused by protease inhibitors; but the identical chemical entity was sold by Amgen (as “Epogen”) for the renal failure/patients on dialysis market.

  5. Mike says:

    I’m surprised Jacobus is getting a free pass on their price. Sure, it’s half of what Catalyst is charging, but the same arguments stand – there was minimal money spent on getting this approved by either company. Catalyst was greedy with their $350K annual price, so is Jacobus “kind of” greedy with their ~$175K price?

    Cleaver strategy though – everyone is pissed on Catalyst, so just price “less” and come out looking squeaky clean!

    1. Anonymous says:

      The link in my handle has some of the story of Jacobus’ involvement with DAP. Jacobus is a small manufacturer of APIs. They were making and providing DAP for free under compassionate use sine the 1990s. I assume that their facility is in full compliance with all relevant drug related regs and has been for decades.

      My guess is that they are charging “only” $175k but setting aside around $170k of that for their Legal Defense Fund.

      Derek also wrote: “We already have a problem with having so many laws and regulations that compliance becomes a full-time occupation … Eventually you reach a point where everyone can be found to be in violation of *something*”
      Coming at that from two different directions: (a) Common sense has been replaced with micro-codified rules and regs. The custodian comes in to replace a burned out fluorescent bulb over someone’s desk. Another person, 3 desks over asks, “Hay! Can you fix mine, too? It’s been burned out for 6 months.” NO! He can’t! That 3 minute fix would be unfair preferential treatment. The RULE is to fill out the on-line form, wait 2 weeks and maybe get your bulb replaced. There are 47 people in the bulb repair queue. The custodian is not allowed to make use of the ladders and boxes right there to fix both bulbs because 46 of those 47 people would file a grievance. Another example is the increasing use of mandatory sentencing rules. The stats showed that certain people or groups received harsher penalties than other groups convicted of the same types of crimes. Eliminate such discrimination with mandatory sentencing. (B) Harvey Silverglate (Harvard Law) wrote a book, “Three Felonies A Day: How the Feds Target the Innocent” about how our complicated, conflicting codes make it impossible to live a crime-free existence (as already mentioned by others in the replies). “Silverglate reveals how federal criminal laws have become dangerously disconnected from the English common law tradition.”

  6. Magrinho says:

    Meanwhile, Sigma-Aldrich sells 3,4-diaminopyridine (amiframpridine) sells for $116 for 5 grams.

    1. KevinG says:

      Sigma-Aldrich does not even list a USP grade. If you look at the spec sheet for D7148, you get: titration, appearance, TLC and IR. Would you ingest something made by an unknown process by unknown manufacturers that is pure by TLC?

      Setting aside the costs of R&D and business considerations, the costs of compliance are significant. The relevant question is: do those costs justify the prices? Do the added benefits of a controlled process justify the cost?

      1. Some idiot says:

        Absolutely correct. But now I am curious. Does anyone know of a study that has quantified (or tried to, at any rate) the cost of proper compliance?

      2. myma says:

        I don’t believe the comment means that the patients should or would go make their own capsules. Its more that the underlying stuff is cheap and readily available.
        If it is about $120/5 grams in small quantity from Aldrich, it is probably $60/5g from Aldrich’s suppliers, and $30/5g to the actual synthesizers, so a couple bucks per gram cogs. The kilo scale would be even cheaper. GMP and tableting would increase cogs but not by multi-thousands-fold.

      3. Ted says:

        I don’t know why not. Add in >98% AUC @ 254nm by HPLC and you have the release specs for hydrocortisone in 1997. There was a minor panic at the labs when DAD came on board and we started looking at released lots at multiple wavelengths….


        1. MagickChicken says:

          Ah, but the real question is, “What are those impurities?” Are they ones that have been identified, and we have pre-established limits for? Or are they just “unidentified,” with unknown activity? Catalyst has identified at least 5 impurities in their API that they test for and have established limits, not to mention the grab-bag of “Unidentified at RRT blah blah blah.”

          For all we know, the 2% in that Aldrich sample is ammonia.

          1. reagent peddler says:

            buy a kilo of it and recrystallize it 4 or 5 times, it will be clean enough.

  7. loupgarous says:

    There’s still another way to gouge patients through their insurance companies and still look good.

    According to an article in Politico, “GILEAD’s BIG GIFT TO TRUMP’s HIV CAMPAIGN”:

    “The drugmaker said it would provide CDC up to 2.4 million bottles annually of Truvada — the pre-exposure prophylaxis medication used to prevent HIV — to direct to communities with high-risk populations, POLITICO’s Brianna Ehley reports.

    The donation — a joint effort with the Trump administration — means that Gilead is giving CDC enough HIV prevention medication to treat 200,000 at-risk people each year for 11 years.

    — What ALEX AZAR said: The HHS secretary called the donation a “major step” toward achieving the administration’s goal of effectively ending the HIV epidemic by 2030.

    “The majority of Americans who are at risk and who could protect themselves with PrEP are still not receiving the medication,” Azar said in a statement. “This agreement will help close that gap substantially and deliver on President Trump’s promise to end the HIV epidemic in America.”

    — Key question: How big a difference will this make in the HIV/AIDS fight? Jen Kates, who leads HIV policy work for the Kaiser Family Foundation, called the move a “significant step” in efforts to reduce infections — at least in America.

    “While this is something pharmaceutical companies have done to help combat HIV globally, it hasn’t really been done domestically,” Kates told PULSE. She also offered a caveat: while Gilead’s donation should help boost access to treatment, “it doesn’t address the underlying price issues at play.”

    That last sentence is the take-away – Big Pharma are still sticking their guns in our ribs with drug prices. While most uninsured or under-insured folks may get a badly-needed prophylactic for HIV infection this way, everyone else in the country pays full ticket, whether through their insurance premiums or at tax time.

  8. myma says:

    Alright so now there are two in the same space.
    Dont they knock each other out when it comes to reimbursement from insurance companies? I mean, sure the sticker price is $$$$ for one and merely $$$ for the other, but what will the two companies actually get paid after the inevitable channel and reimbursement war.

  9. M says:

    Arbitrary and capricious is the term of art for the legal standard to overturn a type of regulatory action and apparently one of the hardest to meet. Like most legal terms it doesn’t match the everyday usage of those words.

    I’m not a lawyer but the talk I was at where it first came up (people complaining about Part 11 back in the ’90s) made it clear it is definitely *not* as simple as “you cited me for this violation, but not these other companies for the same thing” which is just enforcement discretion or something.

  10. Thomas Lumley says:


    That was also my impression after encountering the term in air pollution regulation. They might be hoping for emails saying basically “this is totally against our policy on orphan drugs, but we’ll do it to screw Catalyst”

    1. Yvar says:

      After reading your comment it seems that this move by Catalyst may purely be a way to get access to all FDA commentary about this through discovery (I’m not a lawyer so I have no idea how successful they would be). If that gets them good ammunition in the form of incriminating emails they can fight this out in the political arena and quietly drop the lawsuit. Not a game I’m fond of, but playing the political game seems to be required in this space.

  11. Duncan Bayne says:

    > Eventually you reach a point where everyone can be found to be in
    > violation of *something*, and you live at the sufferance of the
    > authorities, who might change their minds at any time.

    That is a feature, not a bug, from the perspective of those authorities.

    > Eventually you reach a point where everyone can be found to be in
    > violation of *something*, and you live at the sufferance of the
    > authorities, who might change their minds at any time.

    That is a feature, not a bug, from the perspective of those authorities.

    > “Did you really think that we want those laws to be observed?” said
    > Dr. Ferris. “We want them broken. … We’re after power and we mean
    > it. … There’s no way to rule innocent men. The only power any
    > government has is the power to crack down on criminals. Well, when
    > there aren’t enough criminals, one makes them. One declares so many
    > things to be a crime that it becomes impossible for men to live
    > without breaking laws. Who wants a nation of law-abiding citizens?
    > What’s there in that for anyone? But just pass the kind of laws that
    > can neither be observed nor enforced nor objectively interpreted –
    > and you create a nation of law-breakers – and then you cash in on
    > guilt. Now, that’s the system, Mr. Rearden, that’s the game, and
    > once you understand it, you’ll be much easier to deal with.”

    1. AQR says:

      What is the source of the second quote? Thanks.

      1. Anonymous says:

        “Atlas Shrugged” by Ayn Rand: link in handle

        1. reagent peddler says:

          when the authorities protect the corrupt from the citizens instead of the citizens from the corrupt you know your society has entered a steep decline.

          dimethylfumarate, another reagent, is available by a large pharmaceutical company at an outrageous price.

  12. reagent peddler says:

    40 bucks a gram from Aldrich…
    Dimethyl fumarate….same situation, available as a reagent for but a fraction that some drug company charges for it.
    And they call it “science”

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