Three Reasons To Be Optimistic about Pharmaceutical Policy

To say the U.S. pharmaceutical market is highly regulated is an understatement. According to the RegData database developed by the Mercatus Center at George Mason University, the pharmaceutical and medical manufacturing industry as of 2014 had approximately 10,000 more restrictions than the median U.S. industry. Many of these restrictions are enacted by the Food and Drug Administration, which determines whether pharmaceuticals can enter the U.S. market legally. The approval process each drug undergoes is time-consuming (typically requiring 12 years) and expensive (costs can exceed $1 billion).

Political rhetoric suggests little is likely to change. Attorney General Jeff Sessions reportedly involves himself in the DEA’s distribution licenses to grow marijuana for medical research, an unprecedented role for his position. To combat the opioid crisis, President Trump called for fewer prescriptions and possibly the death penalty for illegal distribution. Both proposals create more barriers to patients seeking pain relief or suffering from addiction. The FDA recently began issuing warning letters to companies distributing goods containing kratom. Although the agency considers kratom to have “opioid properties,” kratom is legal in most states.

If Telemedicine Is Underachieving, Government Is to Blame

Telemedicine, the use of telecommunication technology to help administer medical care, is often credited with “radically changing” the healthcare market. Some have credited telemedicine with revolutionizing healthcare delivery, private practice, and outpatient care among other components of healthcare.

However, a recent CNBC article is receiving considerable attention for arguing that “telemedicine has been such a bust so far.” In the article, technology and health reporter Christina Farr contends telemedicine fails to live up to its reputation as “the next big thing in healthcare” and still finds itself on the outskirts of mainstream healthcare and medical practice.

Misdiagnosing Right-to-try Laws

In a recent press release, Congressman Jason Lewis (R-MN) urged the House of Representatives to pass recent ‘right-to-try’ legislation “as soon as possible.” Lewis also said, “I want each and every treatment option that could save a life to be available to those who are sick” and that “Families are depending on us.”

President Trump and Vice President Pence echoed similar sentiments. In his State of the Union Address, President Trump stated, “It is time for the Congress to give these wonderful Americans the ‘right to try.’ ” About three weeks ago, Vice President Pence tweeted, “Let’s get this [right-to-try] DONE.”

Putting Right-to-Try Drug Prices in Perspective

Brainstorm Cell Therapeutics Inc. recently made headlines for attempting to offer an experimental treatment for amyotrophic lateral sclerosis (commonly shortened to ALS or called Lou Gehrig’s disease). This path-breaking treatment, named NurOwn, is a personalized cell therapy which works to promote motor neuron growth to reestablish nerve-muscle interaction.

The treatment was going to be the first attempt to offer patients access to experimental treatment under the new national right-to-try legislation. However, due to a lack of funding, Brainstorm decided not to pursue this option and instead focus on FDA approval. NurOwn is currently in phase 3 of the FDA’s approval process and will likely be approved in 2019 or 2020.

EpiPen Pricing Controversy Reveals Ignorance about Market Competition

A recent episode of CNN’s Boss Files podcast featured Heather Bresch, CEO of Mylan and the first woman to run a Fortune 500 pharmaceutical company. The podcast focused primarily on her journey to success. However, roughly 40 minutes in, Bresch was questioned about her pricing strategy for EpiPen, the epinephrine auto-injector for treating emergency allergic reactions.

Mylan acquired the right to sell EpiPen in 2007 and, under Bresch’s leadership, EpiPen prices were raised nearly 400 percent in late 2015. In mid-2016, Mylan released a generic EpiPen, which sold for about $300 for a 2-pack (50 percent less expensive than the name-brand version). When questioned about Mylan’s pricing and promotion strategy, Bresch explained that patients “needed a solution and wanted a solution” and that her generic device provided both.

FDA Moves Closer to Approving Ecstasy

Last August, the U.S. Food and Drug Administration began testing MDMA (ecstasy) for treating post-traumatic stress disorder. The FDA also granted MDMA breakthrough therapy status to expedite the approval process by making it easier for drugmakers to begin clinical trials.

Recently, MDMA passed phase 2 of the FDA’s four-phase drug-approval process. Although phase 3 requires a large sample and a longer period to complete, the drugs that reach this phase are typically approved. Evidence of MDMA’s “impressive” therapeutic benefits is now published in The Lancet Psychiatry journal. Stemming from the drug’s successful clinical trial results, many expect MDMA to be approved for therapeutic use by 2021.

Right-to-Try Law Signed!

On May 30, President Trump signed a bill into law allowing terminally ill patients access to potentially lifesaving drugs before they are approved by the Food and Drug Administration. This bill, referred to as right-to-try legislation, provides an unprecedented curtailing of the FDA’s regulatory authority.

At a bill signing ceremony, the president remarked, “Thousands of terminally ill Americans will finally have hope.” He is right. With nearly 25,000 patients dying annually while waiting for the FDA to approve potentially lifesaving drugs, opening additional avenues for these patients is paramount. Although right-to-try is inherently risky, easier access to experimental drugs provides more options in literally hopeless situations.

Curing Diseases Is Sustainable, Government in Healthcare Is Not

Goldman Sachs analysts recently asked the question, “Is curing patients a sustainable business model?”, in a report entitled The Genome Revolution. The report outlined profit strategies for biotechnology companies engaged in gene therapy, which attempts to replace defective genes to correct genetic disorders. CNBC has since obtained the report and released the answer:

The potential to deliver ‘one shot cures’ is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies… While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.

Some have taken the report to be an “outright acknowledgment from the financial services industry that curing diseases with a single treatment is not profitable.” Others allege the report demonstrates “curing patients is bad for business” more broadly.

FDA Issues First Mandatory Recall for Contaminated Food

The U.S. Food and Drug Administration recently issued a mandatory recall for Triangle Pharmanaturals, a Las Vegas-based herbal supplements company. The company’s products were linked to a shipment of kratom which tested positive for salmonella. In most cases, companies comply when the FDA recommends a product recall. Triangle Pharmanaturals, however, was not cooperative with the agency’s request, failing to return phone calls and respond to an email.

This is the first time the FDA has issued a mandatory recall for a contaminated food item. While the FDA has long had the authority to order mandatory recalls for drugs, it was granted the power to issue mandatory recalls for food products under the Food, Safety, and Modernization Act of 2011. It is also the first time the FDA has exercised this power.

FDA Restricts Sale of Contraceptive Device

Earlier this month, the U.S. Food and Drug Administration released an order indicating its intent to restrict the sale of the contraceptive device Essure, the only FDA-approved nonsurgical permanent birth control method.

Essure is extremely effective, over 99 percent successful, and popular. As of July 2017, over 750,000 devices have been sold worldwide.