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  • 02.15.2012
Progressive Insurance has Flo.  Progressive approvals have Janet.

The Pink Sheet reports that the FDA wants to make a better case for increasing the use of accelerated approval, potentially as an alternative to implementing a new expedited approval mechanism.

In addition to saving the agency the inevitable headaches associated with implementing a new pathway, it also could quiet discussions about placing a new “Progressive” and/or “Exceptional” approval route into the agency toolbox. Draft legislation outlining both has been circulating among industry and congressional circles for several weeks.

The progressive approval concept would allow a drug to be marketed if evidence is submitted for a candidate that is likely to predict clinical benefit for a designated population and use. Exceptional approval would be allowed using an alternative showing if the data needed couldn’t be generated ethically or feasibly, according to the draft legislation.

On the January 15th edition of “BioCentury This Week” Center for Drug Evaluation and Research Director Janet Woodcock said that, while there are differing views on what progressive approval entails, the consensus is that no new approval pathway should lower the standards for safety and efficacy.

Woodcock also said accelerated approval is not realizing its full potential as a vehicle for qualifying drug candidates. She said it could be used more often and more consistently.

It would seem to be making the case that increased use of accelerated approval could be a viable alternative to instituting the two new approval schemes.

“[Accelerated approval has] been limited by its use, it’s not limited technically,” Woodcock said. “I think FDA could go a long way to [expanding the pathway’s use] with new guidance and new policies. I believe currently what’s codified in fast-track regulation is a little bit confusing about accelerated approval. So that could be clarified as well.”

Woodcock said more internal and external guidance on accelerated approval, such as provisions for the use of intermediate clinical endpoints, would help increase interest.

Woodcock said the concept of “staged approval” is feasible, but also potentially problematic.

“If you’re really going to have less evidence you've got to have some quid pro quo on the other side,” she said. “You can’t just toss it over the wall to the market and say go at it. And REMS doesn’t work in this situation because REMS is about a known safety problem.”

FDA also could speed up its approval of potentially breakthrough drugs by considering the best course of action early in the process, Woodcock said.

At the point a dramatic treatment effect is discovered, whether it is in a small population or any development phase, she suggested everyone “ought to all stop, take a deep breath and figure out how can we evaluate that drug as rapidly as possible.”

She said in some cases years could be cut off a drug’s development period if the larger treatment effect is verified.

“Even at that point, if it’s real, that’s a drug that offers something that no other drug’s offered before in that disease,” Woodcock said. “So you have to think how do we verify if that is real or not and then how do we evaluate the safety profile in the most efficient way possible?”

How, indeed.

Did somebody say “molecular diagnostics?” Did somebody say “personalized medicine?”
 

Feet First

  • 02.14.2012
Yesterday I wrote in the Washington Examiner that, “A Grand Canyon exists between reality and hope in our new age of personalized medicine. Today, former FDA Commissioner Andy Von Eschenbach writes in the Wall Street Journal that, ”Breakthrough technologies deserve a breakthrough in the way the FDA evaluates them

Von Eschenbach points to a troubling statistic that, according to the Tufts Center for the Study of Drug Development clinical trials from 2003-2006 were nearly 70% longer than those from 1999-2002. “Longer (and more complicated) trials have led to skyrocketing drug-development costs. High costs discourage investment in much-needed new therapies for conditions like obesity, diabetes and heart disease.”

Is this regulatory leadership? That’s debatable. Not according to a new California Biomedical Industry study that reports about 80% of life sciences CEOs surveyed don’t believe the FDA regulatory approval process "is the best in the world." Of equal import is that 81% of those surveyed believe that "within five years, another country could conceivably recreate the ecosystem that has made the U.S. the leading biomedical region in the world.” Investors talk with their feet.

Andy writes that, “Other countries such as Israel, Singapore and China are already preparing to leapfrog the U.S. for leadership of the global life-sciences industry.”

“Preparing” is one thing, doing it is another.  But it is a real threat that we ignore at our own peril.  As Sanofi CEO Chris Viehbacher said during  his closing remarks at last year’s annual PhRMA meeting, “The question isn’t will our companies be successful? It’s will they continue to be successful in the United States?”

In January of 2010, I was part of a group of a group government regulators, health care policy experts, industry leaders, health economists, health care attorneys, patient advocates, and academics convened to study and offer new solutions to the hurdles to patient access and to develop high-impact global solutions.

(The report from this meeting, “Expediting Patient Access to New Medicines: A Call to Action,” was published in Drug Information Journal and can be found here.)

One of the ideas that discussed was for a new Asia-Pacific pan-regional regulatory agency that would provide centralized regulatory support outside of North America, Japan, and Europe. The goal would be to create an agency with sufficient resources and scale to accelerate drug approval in a region for which drugs are not usually designed. We suggested that the first embodiment of the idea could be an Asia-Pacific regulatory agency in Singapore that serves Australasia and Asia (ex-Japan). The creation of an additional new agency (similar in scale to the FDA and EMA) would continue to drive regulatory excellence but, more importantly, serve the needs of geographies that are underserved or dependent on guidance from the developed countries. This would encourage biopharmaceutical companies to invest in innovative medicines that may have a different regulatory pathway to approval, resulting in faster access to critical medicines in emerging markets.

Game on.

View PDF Here
Andrew von Eschenbach has an excellent piece in the WSJ today about how FDA reform could support innovation. 

http://tinyurl.com/83emomv


Andy is a visionary who transformed the National Cancer Institute and then went on to become fine FDA Commissioner under extremely difficult circumstances.  He will be chairing MI's Project FDA and we wish him and MI the best of luck in this important endeavor!

As an historical footnote, I was chair of MI's 21st Century FDA Task Force from 2004-6.  Peter and I wrote the Task Force  report "Prescription for Progress: The Critical Path To Drug Development", which you can find here along with links to articles about Andy's participation in the report's release:

http://www.manhattan-institute.org/html/fda_task_1_members.htm

From today's edition of the Washington Examiner:

America needs more breakthrough “progressive” medicines

A recent global cancer conference was abuzz with discussion of a potential breakthrough therapy in the treatment of Alveolar Soft Part Sarcoma, a rare form of cancer afflicting only about 100 patients per year in the U.S.

If ASPS is not eliminated through surgery, it is always fatal. A new therapy for ASPS, called cediranib, was found in early testing to melt away the tumors in up to 70 percent of treated patients.

Yet there is no development pathway for FDA approval for such small populations of patients, so the world's next Gleevec lies on a shelf, with fingers crossed that years from now, after larger, longer clinical trials in higher-prevalence cancers are performed with cediranib, ASPS patients might get access through indirect means.

Simply put, at the FDA, there is no official process for the approval of a product developed to attack a condition afflicting just 100 patients. A Grand Canyon exists between reality and hope in our new age of personalized medicine.

Enter Sen. Kay Hagan, D- NC. As a member of the Senate Health, Education, Labor and Pensions Committee, she has proposed legislation known as the TREAT Act, which calls for FDA reform that would fast-track drugs that show promising early data in treating deadly diseases.

The bill is an acknowledgement of the failings of the 1990's accelerated approval regulations, which rely on "surrogate endpoints" for a clinical trial to represent and reflect the endpoint that is usually used for a drug's approval.

The result is an anemic armamentarium for our nation's number-one killer, and completely empty medicine chests for many rare cancer types.

The TREAT Act reforms the accelerated approval pathway to allow state-of-the-art clinical endpoints that are "reasonably likely to predict clinical benefit" as the basis for approval for life-threatening diseases.

For cancer, this change could allow a return to the notion of simple, universal measures such as significant tumor death, or delay in disease progression, as the basis for rapid release of new products to desperately ill patients. Additional data following confirmatory studies would then allow progression to full approval.

Safeguards are included in the bill to remove the product from the market should it not live up to its initial promise. Also, as a humanitarian gesture for micro-populations with deadly disease, there is the creation of an "Exceptional Approval" pathway.

This would authorize approvals when the usual data "cannot ethically, feasibly or practicably be generated." This pathway would be a game-changer for U.S. rare disease populations of extraordinarily small numbers.

Thanks to Hagan, there can be a new way forward for development of therapies not just for rare cancers, but for thousands of life-threatening rare diseases where there are no realistic opportunities for drug development. Such reforms go beyond helping only the forgotten orphans.

By fostering innovation in new arenas of drug development, jobs are created and businesses prosper, and innovation accelerates the boundaries of medical knowledge and patient possibilities.

Now is the time to embrace a 21st century FDA -- and progressive approvals is a good place to start.

Peter Pitts, a former FDA Associate Commissioner, is president of the Center for Medicine in the Public Interest. Dr. Mark Thornton, a former FDA Medical Officer, is president of the National Organization Against Rare Cancers and is employed in the biotechnology industry.

Matt Herper has a great piece on  how expensive it is to develop new drugs...

http://www.forbes.com/sites/matthewherper/2012/02/10/the-truly-staggering-cost-of-inventing-new-drugs/

I like how Herper compared the cost of developing small molecule meds to biologics.  What's more, he neatly shows that no matter how you slice it or estimate costs they are too high to be sustainable and to sustain the advances in health and life expectancy people have enjoyed over the past 50 years or so.   Herper writes:


"AstraZeneca has spent $12 billion in research money for every new drug approved, as much as the top-selling medicine ever generated in annual sales; Amgen spent just $3.7 billion. At $12 billion per drug, inventing medicines is a pretty unsustainable business. At $3.7 billion, you might just be able to make money (a new medicine can probably keep generating revenue for ten years; invent one a year at that rate and you’ll do well). There are lots of expenses here. A single clinical trial can cost $100 million at the high end, and the combined cost of manufacturing and clinical testing for some drugs has added up to $1 billion. But the main expense is failure. "

Read  How to improve R&D productivity: the pharmaceutical industry's grand challenge by Steven M. Paul, Daniel S. Mytelka, Christopher T. Dunwiddie, Charles C. Persinger, Bernard H. Munos, Stacy R. Lindborg & Aaron L. SchachtNature Reviews Drug Discovery 9, 203-214 (March 2010)doi:10.1038/nrd3078 http://www.nature.com/nrd/journal/v9/n3/suppinfo/nrd3078.html

 Sir Michael Rawlins was warning about the crisis in R&D back in 2003:

"I don't think it has dawned on everybody what is happening," he told the meeting at the Royal Institute of International Affairs, at Chatham House, London. "There is a kind of timebomb."

Sir Michael called for reforms: regulators were too frightened to make mistakes and too reluctant to admit that safety had a price, excessive secrecy over drug regulation in Britain was "outrageous", doctors and academics had neglected to do enough to find out what patients wanted from new treatments, and regulatory authorities had neglected "value for money". A new European clinical trials directive was "a complete disaster" that would "do more damage to clinical trials in Europe than anything I can think of".

http://www.telegraph.co.uk/science/science-news/3312760/Cost-timebomb-may-kill-supply-of-new-drugs.html

The directives were developed to make the regulation of clinical research more...FDA-like.

Thus:

"The current regulation of clinical trials in Europe is causing unnecessary delays and complexity which is stifling medical advances, without additional benefits to patient safety.

"We must make changes to clarify the scope of the current European Directive and stop a ‘one size fits all’ approach to trial regulation."

Professor Peter Johnson, Cancer Research UK’s chief clinician, added: "The huge expansion of paperwork has not helped to make research better or safer, just slower and more expensive.

"It’s essential that European institutions and governments take action against over-regulation of clinical trials, to ensure that patients and the public can continue to reap the benefits from the world-class research taking place throughout the UK and Europe."


http://www.telegraph.co.uk/health/8785027/EU-regulations-hindering-drug-development-say-charities.html

Sir Michael chaired the task force that came up with recommendations for clawing back a lot of the EU regs and red tape.  http://www.bbc.co.uk/news/health-12152954

CMPI has been fighting the battle to speed up and reduce the cost new medical techologies for nearly a decade by demonstrating the value of innovation, articulating pathways for accelerating innovation and bringing together stakeholders to discuss ways to increase adoption of individualized or stratified approaches to care..  We have made some progress in sounding the alarm about the crisis Sir Michael and Mark McClellan identified  as paramount to our future well-being.   And we thank the organizations and firms who have supported and stood with us to avoid what Sir Michael has described as a 'complete disaster'  that is 'killing the supply of new devices and drugs.' 

Much is at stake.  Nobel Prize winning economist Gary Becker observed:

 

At a New Year's Eve party, I asked our guests to name the major development of the 20th century. They had several excellent candidates, including the rise and fall of communism, the growth of democracy, and the advent of computers. But I believe none benefited the ordinary person more than the extending of life expectancy."

 

However, at present rates of innovation the 100 years of uninterrupted growth in life expectancy will cease.  The health improvements that increase our capacity to live free of disability will erode.  Since medical innovation will be the source of most of the technological progress and economic growth in the future, failing to meet this crisis means that America will fail to prosper as it once did and as it should.

We need to do more and need more allies.  

To paraphrase Winston CHurchill: Without victory there is no survival.  



 



It could very well be that, as Jefferson Smith observed in the movie Mr. Smith Goes To Washington" that you fight for lost causes harder than any other.   It often seems like our work is  underappreciated and   I prefer

 


FDA issued three draft guidance documents on biosimilar product development. These documents provide FDA’s current thinking on approaches to demonstrate that a proposed biological product is biosimilar to an FDA-approved biological product (the “reference product”) using the abbreviated pathway under section 351(k) of the Public Health Service Act (PHS Act).

The draft guidance documents are:

Scientific Considerations in Demonstrating Biosimilarity to a Reference Product
 

Quality Considerations in Demonstrating Biosimilarity to a Reference Protein Product

Biosimilars:  Questions and Answers Regarding Implementation of the Biologics Price Competition and Innovation Act of 2009

FDA is accepting public comment on these draft guidance documents. Instructions on how to submit comments will be announced in an upcoming Federal Register notice.

Some higlights:


FDA intends to use a risk-based totality-of-the-evidence approach to evaluate all available data and information submitted in support of the biosimilarity of the proposed product.  The type and amount of analyses and testing that will be sufficient to demonstrate biosimilarity will be determined on a product-specific basis.

FDA will be able to provide meaningful advice on the scope and extent of necessary animal and human testing after a thorough review of data from structural and functional analyses.  Additional animal and clinical studies should be tailored to address residual uncertainty regarding the biosimilarity between the two products to ensure such testing is appropriately targeted.

This draft guidance provides an overview of analytical factors that may be relevant to assessing whether a proposed therapeutic protein product and a reference product are highly similar, as required for a determination of biosimilarity under the BPCI Act.

The guidances discuss general scientific principles, including the importance of extensive analytical, physicochemical and biological characterization.

The type, nature, and extent of any differences between the proposed biosimilar product and the reference product, and the potential effect of any differences on the safety, purity, and potency of the proposed product should be clearly described and discussed by the sponsor in the 351(k) application. 

The agency recognizes that advances in analytical sciences and manufacturing technology, including integration of Quality by Design approaches, may facilitate a “fingerprint”-like analysis of therapeutic protein products, and thus may provide appropriate bases for a more selective and targeted approach to subsequent animal and/or clinical studies to support a demonstration of biosimilarity.

And a solid definition of what it means for a biological product to be “interchangeable”?

The agency defines  “interchangeable” biological product is biosimilar to the reference product, and can be expected to produce the same clinical result as the reference product in any given patient.  In addition, for a biological product that is administered more than once to an individual (as many biological products are), the risk in terms of safety or diminished efficacy of alternating or switching between use of the biological product and the reference product is not greater than the risk of using the reference product without such alternation or switch.  

No surprises.  But it's good to see it on paper.  So let it be written, so let it be done.

http://spectator.org/archives/2012/02/09/the-contraception-edict-an-ass

The Contraception Edict: An Assault on Liberty



We're seeing Obamacare's future and how it works.

The Obama administration's decision to force religious institutions to cover contraception is a case study on how Obamacare and its implementation have politicized medical decisions. Here's how it works. First, health care choices are overruled if they do not flow from the state and do not require taking rights from one group to give to another in the name of fairness. Next, the same administrative apparatus engages in politicking and deal making to appease groups angered by the original decision.

The contraception mandate was issued unilaterally and without regard to the deep feeling and anger it would generate. Now the administration is rhetorically backpedaling and seeking to find a way to respond to the quickly spreading attacks on the action. Claims to the contrary, this was and is not about assuring all women have access to contraception. It was about eliminating the choices and overruling the preferences of one group to enforce the "rights" of another.

Now everyone is focusing on "accommodating" concerns that Obamacare would force employers and organizations to cover birth control. And in doing so, by turning an individual health choice into a government edict we must obey subject to Obamacare's equivalent of plenary indulgences -- a waiver -- we move one step away from liberty and closer to centralized control. That's why one idea for "accommodating" will never be implemented: 'Allowing' religious organizations and employers not to offer contraception as part of health insurance as long as they give employees who want it a choice of plans that do. That's because giving people choices of health plans also comes at the expense of enforcing everyone's "right" to medical care.

The contraception edict is but one of a series of Obamacare judgments that have angered millions of Americans because of its one size fits all nature. From mammograms, to coverage requirements, to end of life planning, the administration's actions rankle not because they are completely dumb (they usually are) but because they violate people's sense that such decisions should not be made by government and should not be based on meeting a political or policy goal.

The contraception decision is more disturbing than these previous enactments of Obamacare because freedom of religion is a deeply cherished freedom that allows us the liberty to establish a relationship with God, family, and lives in ways that government can never replace. As a result, more than any other action, the restriction of Catholic and other religious-sponsored organizations or employers to exercise choice reflects the belief that freedom of religion come at the expense of "reproductive rights of women" underscores how Obamacare regulators will restrict choice and access in the future. In this warped world, birth control medicines and devices are mandated and essential but not Avastin or genetic testing or treatments for cancer or rare diseases. Remember how the administration tried to make end of life planning a requirement? The inner logic of Obamacare is that life-saving therapies and choice inhibit the growth of the welfare state and the appropriate distribution of resources. It is the underlying rationale of the Independent Payment Advisory Board and the Patient Centered Outcomes Research Institute, which focus on "social decisions" rather than individual benefit, decisions that produce winners and losers based on a political calculus.

The action also exposes -- at the beginning of this presidential election season -- the fundamental view of liberty enshrined in Obamacare. Thomas Jefferson wrote "The God who gave us life, gave us liberty at the same time." Another political leader noted, "Liberty is precious. That is why it must be rationed." That was Lenin. You tell me which worldview shapes the contraception edict.
In his 1946 Sinews of Peace speech Winston Churchill famously remarked, “From Stettin in the Baltic to Trieste in the Adriatic an iron curtain has descended across the Continent.

Has an iron curtain today descended on drug safety and quality on many other continents?

Word has it a new WHO study reports that only 20% of member nations have drug regulatory capacity to properly ensure the safety of their national drug supplies.  Yikes.

To paraphrase the British Bulldog, the safety of the world’s drug supply, ladies and gentlemen, requires a new unity from which no nation should be permanently outcast.

It’s time to actively and aggressively pursue FDA Commissioner Peggy Hamburg’s call for a regulatory Marshall Plan to help build (nation-by-nation) global systems for both quality and safety.

Unarguably, two of the most important health advances of the past 200 years are public sanitation and a clean water supply. Those achievements helped to control as many public health scourges as medical interventions helped to eradicate them. A high tide floats all boats.

Working together to raise the regulatory performance of all nations will help all nations (even the 20% deemed “capable” by the WHO) to create sound foundations to address a multitude of quality and safety dilemmas such the manufacturing of biosimilars, the control of API and excipient quality, pharmacovigilance and, yes, even counterfeiting.

With scare resources, perhaps the best place to start is by committing to common standards for data capture and reporting. After all, knowledge is power.

Difficult? To be sure. But, as Winnie reminds us, “A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty.”

Here’s a blog post originally from the Campaign for Modern Medicines:

Peter Pitts on the Energy and Commerce Committee's PDUFA Hearing

peter_pitts.jpgWe were excited to have the chance to speak with Peter Pitts, president and co-founder of the Center for Medicine in the Public Interest, and get his thoughts on the PDUFA reauthorization hearing held by the Energy and Commerce Committee's Subcommittee on Health last week.

  • What did you think of yesterday's PDUFA hearing?
The good news is that there were no surprises and no fireworks. Both sides of the aisle understand the importance of PDUFA and it's "must pass" status. I was pleased that the perennial question of "should there be user fees?" didn't arise to derail the more important conversations concerning how to return PDUFA back to its most important first principles of both partnership and predictability.

  • Where there any surprises yesterday?
I was surprised at the consensus on the issue of FDA advisory committee conflict of interests. Commissioner Hamburg did a splendid job explaining why the agency needs to have access to the best and the brightest with appropriate (but not overly restrictive) safeguards in place. I was also pleased to see that reauthorization for both BPCA and PREA is likely to be part of the process. What remains to be seen is if Congress can take the next logical (and important) step of making both pieces of legislation permanent.

  • Do you see a consensus forming over the desire not to let PDUFA become a political football?
I hope so. It seems that those who would make PDUFA a political conversation have been neutered by responsible legislators on both sides of the aisle who understand that combining politics and the public health (while a heady brew for headline hungry politicians) is inappropriate and contrary to advancing our national healthcare agenda. One issue that is dead in the water is the politically-driven idea to add comparative effectiveness as a third leg to the FDA process. That bodes well for those who are serious about getting the job done right.

  • What's next for PDUFA?
I don't think we have seen the end of the Christmas tree ornament conversation. I don't even think we've reached the beginning of the end. One of the most contentious issues remaining is the TREAT Act and it's call for a "progressive approvals" pathway. That will be a major conversation as the PDUFA process moves over to the Senate side. I also think we will hear more about more regular Congressional oversight over the promises made in PDUFA -- and specifically advances on a benefit/risk measurement instrument.

  • Do you foresee any hurdles to reauthorizing PDUFA before it expires at the end of September?
I think there's a good chance reauthorization will happen before Labor Day -- but it is neither a foregone conclusion, nor is it an absolutely necessary. It is, however, a worthy goal.

  • Just to remind us, what do you think is at stake in the PDUFA reauthorization?
At stake is a return to PDUFA First Principles, namely predictability and partnership as well as making it possible for the FDA to be a leader in the development and deployment of 21st century regulatory science and the advancement of modern medicines. Success means that the FDA will be able to regain its role as an ally and facilitator in advancing the public health.

  • What do you see as the main concerns for patients in PDUFA?
Only the ability of the FDA to expedite the development, approval and use of safe and effective medicines. Everything else is just commentary.


As you can see, Pitts shares our hopes for a timely reauthorization of PDUFA, and agrees that PDUFA is "must-pass" legislation that is critical to helping the FDA review and deliver safe, effective medicines to patients who need them. We look forward to hearing more from him as PDUFA reauthorization progresses.

In Greece wise men speak and fools decide.
-- George Santayana

Poor Greece.

According to a new article in The Lancet:

The Greek Government's austerity drive has inadvertently triggered problems with the country's drug supply, causing shortages of hundreds of medicines.

But it’s not just Greece; drug shortages have been in the news in the United States and the EU. Also, in Saudi Arabia, some 2000 medicines are in short supply since 2008 and in Turkey some 350 medicines have been at risk of stock outs since arbitrary changes in pricing and reimbursement last November. 

Plainly speaking, artificially low prices cause drug shortages.

In the past few months, according to the PanHellenic Association of Pharmacists, 500 commonly used drugs are in short supply. Among them, there are drugs for hypertension, gastroenterological disorders, cancer, kidney diseases, and painkillers.

What’s causing Greek’s drug shortage problem? The same issue that causes it everywhere else – perverse market incentives.

In the United States, a government analysis of average sales prices showed that oncology sterile injectable drugs that experienced shortages since 2008 decreased in price from $56.17 per unit in Q1 2006 to $37.88 per unit in Q1 2011. Oncology sterile injectable drugs that have not experienced shortages have had relatively stable prices over this period.

Last year, the Greek government mandated lower drug prices to cut down its medical expenses. Medical expenses were €2·4 billion in 2004, €5·2 billion in 2009, and dropped to €1·65 billion in 2011, after the measure was taken.

However, the government's decision has fed the parallel trade market since
wholesalers prefer to sell their products in other countries where the profit is higher.

“Due to medicine shortage, the population's health is in great danger,” says Kostas Kouvaris, president of Pireaus Pharmacists Association. Theodore Abatzoglou president of the PanHellenic Association of Pharmacists points out that the recent government law for the prices of medicine has also caused hospitals to run out of drug stocks. And because of the extremely low prices set by the government, international companies are not interested in supplying Greek hospitals with medicine. Health institutes are now mainly being supplied by companies that sell generic drugs which, in many cases, represent older medical technologies.

But, generic drugs aren’t often what the doctor ordered.  Replacing an old generic drug for a modern innovator product may save a government money in the short term, but as patient outcomes worsen and hospitalization occurs, health costs skyrocket.

According to Greg Conko of the Competitive Enterprise Institute,

"Essentially all of the drug shortages that occur in the U.S. arise in the generics market, where profitability is fairly low … Compounding the problem is the fact that the 'buyers' of the drugs in question aren't patients but third-party payers -- insurance firms, pharmaceutical benefit managers, and government health programs -- all of which have a strong incentive to drive the prices paid for these products down as low as possible … So, for many of these drugs, the market can really only sustain a handful of manufacturers -- sometimes just one or two. So, when supply disruptions occur -- caused by a shortage of raw materials or more often a quality control problem in a manufacturing facility -- there aren't a lot of additional producers in the market to take up the slack.”

"The main cause of drug shortages is economic," says Mandy L. Gatesman, PharmD, of Virginia Commonwealth University in Richmond, and Thomas J. Smith, MD, of Johns Hopkins. "If manufacturers don't make enough profit, they won't make generic drugs.”

Let’s adopt a free-market solution and free physicians, pharmacists, and patients of the problem of needless drug shortages.

The government solution to a problem is usually as bad as the problem.              
-- Milton Friedman
CMPI

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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