FDA Commissioner Scott Gottlieb is planning to use the agency’s power to increase competition among drug manufacturers in an effort to lower drug prices.
The agency will prioritize the approval of generic drugs in markets with less than three generic competitors, Gottlieb said in an interview with Bloomberg Monday. He hopes to target situations in which a popular drug has few or no competitors leading to significant price increases.
In perhaps the most infamous example of this issue, Turing Pharmaceuticals AG, then led by Martin Shkreli, bought the 65-year-old anti-invective drug Daraprim, and raised the price from $13.50 to $750 per pill.
Gottlieb said the agency’s goal is to have at least three manufacturers of every generic version of a drug.
“We know the most significant savings to consumers comes when there are three generics on the market,” Gottlieb told Bloomberg.
The introduction of one new generic competitor into the market tends to modestly reduce prices while the introduction of a second slashes prices to almost half that of the brand version, according to an FDA analysis.
Actively prioritizing the approval of generic drugs that will increase competition in monopolized markets represents a significant policy shift.
Previously the FDA has approved generic applications for the first company to apply for a generic version of a brand-name product. The agency does not usually consider drug prices as a matter of policy and is barred from taking them into account during the drug approval process.
Gottlieb has floated additional ideas to increase competition among drug manufacturers, including the exploration of policy options designed to stop brand name drug companies from restricting distribution. Drug manufacturers have been known to restrict distribution in an effort to block generic drug manufacturers from obtaining a large enough supply of a certain drug to perform the testing required to develop a generic version.
The FDA is also considering releasing a list of the 180 brand name drugs that are no longer patent protected, 150 of which no generic drug maker has applied for review of. Gottlieb said publishing the list “might create a more compelling business opportunity.”
Gottlieb added that the FDA will hold a public hearing in the next few months focused on increasing generic drug competition.
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