Access Before Evidence and the Price of the FDA’s New Drug Authorities

Erika Lietzan *

Sometimes drug innovation seems to happen in reverse. Patients enjoy a treatment for years even though the treatment has not been approved by the FDA or proven safe and effective to the FDA’s standards. (Sometimes this happens because the FDA has declined to take enforcement action.) The agency encourages companies to perform the work necessary to satisfy the United States “gold standard” for new drug approval, however, by promising exclusivity in the marketplace. When a company does this work, at considerable expense, the results are predictable. The new drug is expensive, and patients and payers (and sometimes policymakers) are outraged. To them, it seems like nothing more than a sudden and significant price increase in a drug that was already widely available. 

This reverse sequence happens regularly. Doctors all over the country prescribe medicines for a variety of ailments, not realizing the medicines are supposed to be approved by the FDA—but have not been. Every time a company finally does the research that the FDA requires and enjoys the reward of exclusivity in the marketplace, the public cries foul. Today doctors administer fecal microbiota therapy, using an unapproved stool preparation that has been shipped by a company in Massachusetts. But companies are studying new drugs based on the principle. A recent New York Times article described the looming controversy, quoting doctors and patients who seem to question whether the new drug approval process will be worth its cost.

These scenarios force us to confront basic questions about the cost and the benefit of the new drug framework. This article examines the new drug authorities with fresh eyes, with the added benefit of these unusual scenarios where in a sense the gatekeeping mechanism has failed. Its principal insights are that, in addition to ensuring the production of high quality evidence about treatments in the marketplace, the new drug authorities: (1) ensure the disclosure—and provide a mechanism for close regulation of the disclosure—of that information, and (2) give federal regulators a leash on new drugs, and the companies who market them, through the life cycle of those drugs. It explores the costs of error and delay associated with new drug approval and alternatives that some scholars and policymakers have proposed, ultimately arguing that—though aspects may need tweaking—the new drug approval paradigm is worthwhile.

But these access-before-evidence scenarios bring home the point that the new drug approval standard does not, itself, ensure high quality innovation is performed. Something else must provide the encouragement. It concludes that those who object to temporary exclusivity for new medicines that complete the approval process (and the high prices they make possible for a while) must ask themselves whether they value the new drug framework (including good evidence) as much as they thought.

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        *    Associate Professor of Law, University of Missouri School of Law. In June 2015, Diane Hoffmann and coinvestigators from the University of Maryland Baltimore received a grant from the National Institute for Allergy and Infectious Diseases to study legal and regulatory aspects of microbiota transplantation. The author served on an expert working group convened to advise the investigators from December 2015 through February 2018. This project was supported by the Joe Covington Faculty Research Fellowship and the William F. Sutter Faculty Research Fellowship Fund. The author is grateful for feedback from audience members at the sixth annual fall conference of Scalia Law School’s Center for the Protection of Intellectual Property (IP for the Next Generation of Technology, in October 2018) and for the opportunity to discuss this project at a symposium hosted by Mizzou Law’s Center for Intellectual Property & Entrepreneurship (Protecting the Public While Fostering Innovation and Entrepreneurship: First Principles for Optimal Regulation in February 2019). Krista Carver, Joseph Gabriel, Brook Gotberg, Thomas Lambert, and Patricia Zettler provided helpful comments. Henry Adams (University of Missouri School of Law Class of 2020) and Alec Larsen (Class of 2019) provided research assistance.

 

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