Trump offloading drug price battle to new FDA chief; Dr. Gottlieb’s ideas make a lot of sense

TBIT / Pixabay

The News:

New FDA Commissioner Dr. Scott Gottlieb comes into office immediately confronted by a host of tough challenges: from budget concerns, drug prices, staffing issues and a nationwide opioid addiction crisis. But those who have worked with him say he’s the ideal man for the job. Does that mean his job is safe, however?

New @FoodDrugAdmin Comm @SGottliebFDA may be the ideal man for the job Click To Tweet

During and after the November election, President Donald Trump has pledged to bring down drug costs and, in some cases, hauled the industry over the coals for its pricing. Shortly after winning the election, Mr. Trump said pharma has been “getting away with murder,” but has softened that tone in subsequent meetings with industry bosses.

Now, his new FDA chief is laying out some approaches the agency will take to fight high prices.

In tes­ti­mony be­fore the House ap­pro­pri­a­tions sub­com­mit­tee Thurs­day (May 25, 2017), the new com­mis­sioner high­lighted sev­eral meth­ods that could pre­vent bio­pharma com­pa­nies from gam­ing the sys­tem, fo­cus­ing specif­i­cally on “sit­u­a­tions where off-patent drugs lack an ap­proved generic com­peti­tor.” Got­tlieb will get the FDA to pub­lish a list of drugs that are off patent “for which FDA has not ap­proved a sin­gle generic ap­pli­cant.”

Got­tlieb wants to flag the po­ten­tial for a re­peat of Martin Shkreli’s de­ci­sion to buy an old generic, Dara­prim, and then rais­ing the price of the drug overnight by more than 5000% at his com­pany, Tur­ing. Dara­prim had no generic com­pe­ti­tion on the mar­ket, giv­ing Shkreli a clear and legal path to inflating the price, says EndPoints.

Dr. Gottlieb said his agency will publish and regularly update a list of medications that are off patent and have no competition, work to improve generic review times and seek to “curtail gaming” of regulations by the industry that allows companies to extend patent monopolies.

“We do have sit­u­a­tions where spec­u­la­tors, for lack of a bet­ter word, can come in and buy a low vol­ume generic, jack up the price know­ing that it will take po­ten­tially years for generic com­pe­ti­tion to come on to the mar­ket so they have that sort of an ex­clu­siv­ity pe­riod,” said the com­mis­sioner.

Further, the FDA will seek to stop misuse of Risk Evaluation Mitigation Strategies that have hurt generic drug developers’ ability to get samples of branded medications needed to develop generics.

The proposals will likely be welcomed by those who’ve asked for drug pricing reform but have seen little action from Congress despite more than a year of calls from its members to rein-in drug prices.

In a Thursday (May 25, 2017) statement, the pharmacy benefit manager industry group Pharmaceutical Care Management Association (PCMA) welcomed the proposals.

“As the Trump administration seeks to combat high drug costs, we applaud FDA Commissioner Gottlieb’s decision to publish a ‘watch list’ of off-patent drugs,” PCMA CEO Mark Merritt said in a statement. “This move, which PCMA and others have long advocated, will help deter manufacturers from buying the rights to drugs like Daraprim for the explicit purpose of raising their price.”

Proposals floating in Congress to fight drug costs include Medicare price negotiations and importation from Canada.

Steve’s Take:

Talk about getting your dream job, Dr. Gottlieb, and hitting the ground running, taking the reins and discharging your regulatory duties with vim and vigor. But perhaps even more importantly in this seemingly grave hour over at the White House, you’re taking one of your President’s chief campaign themes (reducing drug prices) off his shoulders so he can focus on other mounting tribulations.

The FDA is responsible for regulating food and drugs. It’s also responsible for regulating medical devices, blood donations, veterinary products, cosmetics, and tobacco. But the FDA doesn’t directly play a role in setting drug prices.

Gottlieb’s comments hint at the changes that could come to drug pricing under the Trump administration. President Trump has expressed an interest in negotiating drug prices, but that’s something the government isn’t allowed to do for Medicare and Medicaid. Frankly, I don’t see Congress changing this.

In March, Trump also tweeted that he’s working on “a new system where there will be competition in the drug industry.” Back then, the administration was actively working on actions it can take without Congress to fight high drug prices, according to people who attended “listening sessions” officials were holding on the issue.

But since then, Trump hasn’t said much on the topic. In fact…silence. Why the change in tactics on addressing this price-gouging scourge?

All of which has been a new situation for an industry that has traditionally been aligned with GOP administrations and members of Congress. It’s now facing a Republican president who is on record as critical of the way they set prices.

The listening sessions held by Secretary of Health and Human Services Tom Price appeared to be a step toward policymaking on drug pricing by the new administration.

Those who attended the meetings say they came away with the impression that the administration was serious about taking action on drug prices, though the details remained unclear.

A major question is whether the administration will stick with safe and sound Republican solutions or break with much of the party and choose more far-reaching ideas usually associated with Democrats, The Hill points out.

White House budget director Mick Mulvaney caused a stir in health policy circles earlier this month when he said on a panel at Stanford University that the administration was considering proposing that drug companies give discounts through rebates in Medicare the same way they do in Medicaid. That would be a striking break from Republican tenets on drug prices if the administration ended up proposing it, though that could require action from Congress.

Mulvaney said that in addition to items to propose to Congress, “we are looking at things that we can do internally … without Congress.”

Price, though, was resistant to government action on drug prices as a lawmaker and could lead the process down a more traditionally Republican path of more restrained action, some observers think.

But that was back in March, and since Gottlieb’s confirmation, all the steam built up by the administration to combat drug price-gouging went…poof. In effect, that job, for the time being, has been tasked to the new commissioner.

As a protégé of Mark McClellan, FDA commissioner from 2002 to 2004, Gottlieb is likely to also approach change at the agency with an a economist’s eye — “as interested in the economic ramifications of a policy as in the policy itself,” said Marc Scheineson, now a partner at Alston and Bird LLP, who formerly worked in legislative affairs at FDA and alongside Gottlieb as an advisor, says FDA News.

Gottlieb will focus on the core agency missions, said Scheineson, who spoke in an FDA news webinar, along with Wayne Pines, president of health care for APCO Worldwide consultancy and a former FDA spokesman, and Peter Pitts, co-founder and president of the Center for Medicine in the Public Interest, who also worked with Gottlieb at the FDA.

Expect to see the FDA become a partner in as well as a regulator of innovations under Gottlieb, Pitts said, and the development of a more predictable approval process and more in depth guidance.

Bottom Line:

It’s unclear how much President Trump will seek to oversee and command his new commissioner. If he’s smart, Mr. Trump will allow Dr. Gottlieb to rely on his former experience in the FDA while with the George W. Bush administration and the additional real-world industry knowledge gained since then to guide the agency in the general direction the White House has suggested.

Steve's Take: @realDonaldTrump should let @SGottliebFDA do his job, esp on #drugpricing issue Click To Tweet

If Trump is savvy with this solid appointee, he’ll let Dr. Gottlieb run the show vis-à-vis the drug pricing issue. Qualifications–wise, he’s got what it takes to lead the agency to serve the public purpose for which it was originally created. But is Trump capable of letting him do that? If not, even Dr. Gottlieb may join General Flynn and Director Comey, to name a few other former government officials, in hearing those infamous two words.