In 1980 about 5% of health care spending was on prescription drugs, compared to 11% today. That is not a bad thing, however. Drugs are the most efficient way to treat illness. Medications allow patients to take pills in the comfort of their own home rather than receiving care in a hospital or clinic. Driving the rise in drug spending are two factors: (1) new drugs with soaring prices; (2) improved drugs for conditions previously untreatable. Think GLP-1 drugs like Wegovy, Ozempic, Mounjaro, for weight loss and Sovaldi and Harvoni for hepatitis C. The average price of prescriptions filled has also decreased in recent years due to the rising share of generic prescriptions.
New drugs benefit American patients. Increasing the number of drugs in the pipeline will likely boost drug spending but also increase the number of new or improved drug therapies. It will also increase the number of generic drugs 20 years down the road. Shortening the length of time it takes new drugs to gain approval would also boost competition with earlier drugs that are still under patent protection.
Writing in the Wall Street Journal Charles Hooper and Solomon Steiner propose a way to speed new drugs through the pipeline by doing away with FDA regulations requiring clinical trials to establish efficacy. Drugmakers would still have to perform studies showing safety.
Before 1962, developing a drug took about two years. Now it takes 12 to 14 years. Since 1975 real development costs have risen about 7.5% a year, roughly doubling every decade. Today, we estimate that bringing one successful drug to market costs about $9 billion on average. (This includes the cost of failed drugs and the time value of money.)
Requiring proof of efficacy to the satisfaction of a government agency, even after the drug has been found to be safe by that same agency, is expensive. It also doesn’t help patients much. In actual medical practice, treatment is derived by trial and error. A doctor might start a patient on one drug and switch to another if it doesn’t work. Even if a clinical trial shows that a drug works for 60% of patients, no one knows in advance if it will work for a particular patient.
A lot of FDA-approved drugs do not really work well in my opinion. Data used for approval is often cherry-picked with clinical trials where the data was ambiguous left out (also my opinion). Yet, no longer requiring proof of efficacy would seemingly make new drugs that made it through the pipeline even less effective. For example, a drug deemed too ineffective to gain FDA approval could still be sold. The following are some ideas to potentially speed effective drugs to market:
- Ease restrictions on the use of real-world data, including clinical trials held in other countries. In recent years, the FDA became concerned that poor, clinical trial participants may have been recruited through inappropriate financial incentives, with trial data potentially falsified.
- Speed the approval of drugs already approved in other developed countries.
- Conditional approval substantially equivalent drugs, like is done with 510(k) medical devices. If one company introduces a GLP-1 drug that works, subsequent applications for GLP-1 drugs would face less scrutiny.
- Conditionally clear to market drugs that have passed clinical trial Phase 0, I and II, with smaller Phase III (efficacy) trials. Then require post market surveillance of efficacy. Clinical trials for efficacy would essentially be run out in the field.
Good outcomes always require appropriate incentives. Drugmakers should face incentives to bring only effective drugs to market. They would also need incentives to accumulate data on how their drugs work to achieve full approval. That could potentially occur by requiring post market surveillance of conditionally approved drugs to gain full approval. Furthermore, policymakers should also create financial incentives for drugmakers to seek full approval at some point in the future.
Consumers reward producers of good products and punishes sellers of bad ones. However, doctors prescribe drugs, which are often reimbursed by third parties. Consumer sovereignty hardly plays a part. Therefore, third party payers should have the right to refuse to reimburse a conditionally approved drug they deem ineffective (or overpriced) until it has gained full approval. Clinical trial data and post market surveillance data should also be fully transparent. Finally, reform the patent system and remove loopholes drugmakers use to increase the number of years a new drug has exclusivity. For instance, ban patent thicks by refusing to register additional patents on already approved drugs.
Read more at WSJ: Deregulation Can Make Medications Cheaper
Your suggestions are good ones (especially the use of real-world evidence), but they keep the FDA in the position of having to approve drugs, and this power will inevitably be misused. How about splitting the difference between your perspective and Hooper & Steiner by making FDA efficacy approval voluntary, like a “Good Housekeeping seal of approval”? Manufacturers who were willing to jump through FDA hoops like randomized clinical trials (RCTs) could become “FDA efficacy-approved,” but it would not be required. Health plans and consumers could then decide whether to cover only FDA efficacy-approved drugs or a broader spectrum of FDA safety-approved drugs.
What you’re suggesting makes sense. Drug makers would have an incentive to seek full approval but would not have to do so. The use of real world data could be an avenue to gain approval. Currently the FDA refuses to approve more advanced unscreen ingredients because producers will not conduct studies that their competitors would also benefit from. These ingredients have been used in Europe and Asia for more than 20 years.