It’s The FDA Stupid – Bernie Sanders Ponders Free Drug Costing $375,000

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A general and useful rule is that when something is wrong with the American health care system we should blame the bureaucracy – something Bernie Sanders should recall when pondering the formerly free drug which now costs $375,000 for a year’s treatment.

Sure, people are taking advantage, but they’re taking advantage of the system as it has been set up by Congress and the Food and Drug Administration. Blaming people for acting by the rules you yourself have written isn’t a good look.

The actual problem here is off label uses and on label. Once a drug has been approved by the FDA to treat one or more diseases then it can be prescribed to treat any others. OK. But it’s also possible to take a drug which was licenced for some other disease and go through the system again to get it licenced for some other. Something that used to be an off label treatment and get it checked off as an on label one that is.

Well, ‘K. Except it costs a billion dollars – yes, billion with a b – to get a drug approved by the FDA in the first place. Perhaps not so much to get in on label for some other disease but still a grand sum of money. So, if someone does this then they’ve got to be able to make their money back. Which, with rare diseases and the limited time span of patents means a high price per person treated. Which is exactly what is happening here:

Sen. Bernie Sanders sent a blistering letter to a pharmaceutical company on Monday, demanding answers about its decision to charge $375,000 for a formerly low-cost drug and calling it corporate greed at its worst. “Catalyst’s decision to set the annual list price at $375,000 is not only a blatant fleecing of American taxpayers, but is also an immoral exploitation of patients who need this medication,” the independent senator from Vermont wrote. “Simply put, it is corporate greed.
“I am profoundly concerned that Catalyst’s actions will cause patients to suffer or die.”

It could indeed be all of those things. But it’s the FDA and the rules the Senate approved that make it not just possible but essential. If drugs are to be tested for on label uses that is it’s necessary. The important word in that letter from Bernie is “unapproved”. It was unapproved to treat this disease. Then the company spent the money to get it approved by the FDA. That’s a cost of their doing business, obviously.

The disease itself affects some 3 or 4 people per million. Call that perhaps some 1,000 people. So, how much should you charge for a drug that perhaps 1,000 people will use? Which cost you anything from $100 million to $1 billion to get through the bureaucracy. And which you’ve only got a roughly 10 year patent and thus exclusivity upon?

The drug had been available at no cost for two decades under the name 3,4-DAP from Jacobus Pharmaceutical as part of the Food and Drug Administration’s compassionate use program. The drug, though unapproved specifically for Lambert-Eaton myasthenic syndrome, often was prescribed by doctors for the condition. Catalyst in November won expedited FDA approval to sell Fidapse as the first treatment for Lambert-Eaton myasthenic syndrome. A month later, the company announced the list price for a year’s treatment: $375,000.

This really is what has happened here. Someone has spent the money to get the FDA licence to use it to treat this specific disease. How much should they charge for it?

Now, we could say that it should have remained free. Which would mean that we didn’t want the specific FDA approval for this disease. Leave it just as a drug approved for use on humans and doctors can prescribe as they want. OK, what’s the implication of that? That we don’t want the FDA issuing licences for drugs to treat specific diseases. We want just, instead and only, a general licence of “You can use this on humans”.

Equally, why is it so damn expensive? Because the tests demanded by the FDA are damned expensive. Because you’ve not only got to prove that the drug is safe but also that it’s better at treating the specific disease aimed at than the current treatments. There is no licence for “You can use this on humans”. Even when it’s possible to use something off label, as this was for decades, it still had to have been proved once, one time, for one particular disease. Otherwise it can’t be used at all.

So, how do we stop this happening? Well, we change the FDA licencing system. Firstly, we make it much cheaper, secondly we stop insisting upon proof of value for a specific disease. Introduce just a “You can use this on humans” licence. And let the medical profession get on with it from there.

Oh, and what’s the one medical reform that Bernie Sanders and the like won’t countenance? Reform of the FDA licencing process to consider only safety. All of which is a bit of a bugger really but still, it produces endless possibilities for grandstanding, doesn’t it? Which is of great value to politicians of course, the real reason we’ve got the health care and drug licencing system we do.