FDA chief says drug makers are gaming the system to slow generic competition; vows action

Jayne O'Donnell | USA TODAY

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A day after President Trump lashed out at the black CEO of drug maker Merck on Twitter, his new Food and Drug Administration commissioner said brand name drug companies are "gaming the system" to block generic competition and vowed to do something about it.

Physician and FDA chief Scott Gottlieb declined to comment on Trump's tweet urging Merck's Kenneth Frazier to lower drug prices after Trump's response to the violent Charlottesville, Va., protests prompted Frazier to resign from the White House manufacturing council. However, in a meeting Tuesday with USA TODAY's Editorial Board, Gottlieb didn't mince words when it came to his plans to stop what he said are anti-competitive actions by brand-name pharmaceutical companies that keep prices high.

He also touted the FDA's record 100 generic drug approvals last month and said he hopes to cut the review time for generic drugs from four years to about 10 months.

Drugmakers "game the system and game the rules" through a patient safety program that allows them to keep generic drug companies from getting enough doses of their branded drug, said Gottlieb. Generic drugmakers need up to 5,000 doses to do the studies needed to prove their products are truly equivalent, he said.

David Mitchell, a multiple myeloma patient who founded the group Patients for Affordable Drugs, says this tactic is a top reason one of his former medications became the most expensive drug Medicare covers. He said he welcomes FDA's focus on it.

"It's not in and of itself going to solve the problem of high drug prices, but stopping those abuses would help a lot of patients," says Mitchell, who doesn't accept funding from any entity in the pharmaceutical industry.

Mitchell says his out-of-pocket cost for Revlimid went from $42 a month in 2011 to $250 a month by the time he had to stop taking it last year because of side effects. The median out-of-pocket cost for a Medicare beneficiary taking Revlimid is $11,500 per year, he notes, while the median income of a Medicare beneficiary is about $24,000 per year.

FDA has received about 150 letters that generic companies have sent brand name companies complaining about access to doses for their studies. Only about half involved the patient safety program, while the others involved specialty pharmacies and restrictive contracts that prevent distributors from selling to generic companies.

This seems anti-competitive to him, but even if it isn't illegal, Gottlieb said there are ways FDA can address these tactics because it's good public health policy. One way is releasing the letters publicly, which FDA plans to do.

"He's trying to do what he can in shaming them and to push every lever he can, but he will probably need congressional action to deal with it once and for all," says Mitchell.

Bi-partisan legislation is pending in Congress to increase access to the samples.

Josh Sharfstein, a physician who was principal deputy FDA commissioner under President Barack Obama, said addressing "market failures" like these is a "solid step the FDA can take."

"There may be other areas, but this is an area where he has the opportunity to make progress," said Sharfstein, a professor at Johns Hopkins University's Bloomberg School of Public Health.

Also discussed:

• Tobacco. Late last month, the FDA announced a tobacco plan that includes reducing the nicotine in cigarettes and a delay in regulating electronic cigarettes. While the delay marked a reversal of an Obama administration plan, Democrats and public health officials were generally supportive of the more comprehensive approach to tobacco.

Jeff Stier, director of risk analysis at the free-market National Center for Public Policy Research, stopped short of endorsing mandated lower nicotine levels in cigarettes, but if it's done, he says it must be done in a "sequential approach." First, he says, there has to be a choice of new lower-risk products for those who who want to quit smoking, but haven't succeeded with other approaches.

• Opioids. While FDA won't ignore those who are already addicted to opioids, Gottlieb says he wants to focus on reducing the chance people get addicted in the first place. He also wants to make sure patients aren't "being prescribed opioids when other drugs might suffice" and that their prescriptions are for the "shortest duration" possible.

As opioid use was increasing, anti-inflammatory medications were prescribed less due to fears of heart attacks —- and likely less often than necessary, Gottlieb noted.

The FDA has also stepped up inspections and added investigators and analysts at international mail facilities to catch illegal shipments of drugs such as the narcotic fentanyl, which has led to a surge in overdose deaths. The FDA is even negotiating with U.S. Customs and Border Protection to get more space in the facilities for its growing staff, Gottlieb said.

Gottlieb, who was a resident fellow at the conservative American Enterprise Institute before joining the FDA this year, has proven more popular than expected with the typically more left-leaning public health community.

"Public health professes to hate tobacco, but after the first major announcement of the Trump FDA, tobacco stocks tanked," when Gottlieb announced the lower nicotine plan, says Stier.

On the other hand, tobacco stocks remained strong during the Obama administration, said Stier, whose employer gets 1% of its funding from tobacco-related industry.

Sharfstein, a former health secretary for Maryland, is impressed by what Gottlieb has accomplished so far.

Gottlieb "has shown a good deal of focus out of the gate," says Sharfstein. "He’s put a focus on public health by considering not just how medications can be used appropriately, but also how they can be misused."