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Drug Prices Are High Because Government Protects Monopolies

in Healthcare, Liberator Online, News You Can Use by Alice Salles Comments are off

Drug Prices Are High Because Government Protects Monopolies

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Ever since the EpiPen scandal hit the public like a ton of bricks, many outlets contended that greed, not cronyism, was to blame.

pillsBut when looked closely, EpiPen is just another example of corporate influence and lobbying shaping public policy. The ones who benefit are always the same individuals who pressed for changes in the first place.

In an article for the Fiscal Times, Mercatus Center’s Marc Joffe contended that the drug price problem could be fixed by targeting the Food and Drug Administration. But not by giving the agency more regulatory power. Instead, Joffe argues that, stripping the agency of its power would do America a world of good.

In the article, Joffe tells the story of how the FDA obtained its power, noting that it was a morning sickness pill that prompted the nationwide support for the Kefauver Harris Amendment, which “gave the [FDA] most of the power it now exerts in regulating drugs.”

As the FDA expanded its power, regulating every single piece of medication in America, drug prices increased considerably, while access to many life-saving drugs remains restricted. To Joffe, the “drug crisis” we now face as a nation has everything to do with the empowerment of the FDA, prompting the scholar to urge lawmakers to look at the free market for a solution if what they are truly after is to lower drug prices.

In a competitive market, Joffe writes, “price equals the marginal cost of production.” But even in an imperfect world, he contends that, when “prices [are] well above production costs,” firms see an incentive to compete. But if markets are restricted and companies are granted exclusive rights to produce and sell certain drugs, firms are unable to compete. Without competition, monopolies set the rules, making way to high costs and low effectiveness.

In his article, Joffe argues that, if Congress is serious about helping patients from all walks of life, they must stop considering the idea of passing laws to expedite the FDA’s approvals for new drugs. Instead, Joffe writes, “[allowing] multiple organizations to approve drugs, providing competition to the FDA … [or allowing] pharmaceutical companies sell whichever medications they believe to be safe and effective — with the understanding that patients can win large judgments if the companies fail to produce and market their treatments responsibly,” would both be better options that would deliver better, and more effective results.

Freedom, after all, is the answer to most of our problems. And that’s why governments often contend the opposite.

Idaho Legislators Defy the FDA, Houses Passes Right to Try Legislation

in Drugs, Issues, Liberator Online, News You Can Use by Alice Salles Comments are off

Idaho Legislators Defy the FDA, Houses Passes Right to Try Legislation

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

The US Food and Drug Administration and its very foundation have been on the receiving end of heavy criticism for quite some time, and yet the agency’s power appears to never be brought into question in a significant way.

IdahoFrustration, however, is often the best incentive. With that in mind, a group of Idaho lawmakers decided to join several other states by defying the FDA’s powers by proposing a piece of legislation that would practically nullify some of the agency’s rules prohibiting terminally ill patients from having access to experimental treatments. The bill would allow Idaho residents to have access to these experimental treatments, regardless of what the FDA has to say on the matter.

According to the Tenth Amendment Center, the House of Delegates Health and Welfare Committee introduced House Bill 481 on February 12. On February 29, the bill passed the House by an overwhelming margin.

Access to experimental drugs and treatments is restricted under the Federal Food, Drug, and Cosmetic Act. While the law keeps the general public from having access to experimental drugs and treatments, a provision known as 21 U.S.C. 360bbb gives patients with serious or life-threatening diseases access to experimental drugs that have been approved by the FDA. Drugs that haven’t been approved by the agency, however, remain out of reach.

If HB 481 passes, the FDA’s rules would not apply to Idaho residents seeking access to experimental drugs. Instead, state laws would protect manufacturers and physicians involved in aiding the terminally ill. By protecting all parties involved from liabilities for their participation, the state may effectively nullify the FDA’s rules locally.

The bill states that eligible patients may “request, and a manufacturer may make available to an eligible patient under the supervision of the patient’s treating physician, the manufacturer’s investigational drug … which shall be clearly labeled as investigational; provided however, that this chapter does not require that a manufacturer make available an investigational drug to … an eligible patient.” With this piece of legislation in place, health care providers that agree to participate, whether by administering the treatment or by giving the patient the resources necessary to carry on with the experimental treatment, will be protected from possible legal actions. By protecting providers and physicians from sanctions, license troubles, or lawsuits, the state of Idaho joins other 24 states that have passed the “Right to Try” legislation in their states.

To the Tenth Amendment Center, this rapid evolution indicates that Americans of all walks of life are coming together to put an end to rules that put individuals in danger and that undermine their liberties.

HB 481 should move to the Idaho Senate for further consideration before the piece of legislation heads to the desk of Governor Butch Otter.

Is it Corporate Greed That Led to Turing Pharmaceuticals’ “Price Gouging” on Daraprim?

in Ask Dr. Ruwart, Liberator Online by Mary Ruwart Comments are off

Is it Corporate Greed That Led to Turing Pharmaceuticals’ “Price Gouging” on Daraprim?

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

Question: Is it corporate greed that led to Turing Pharmaceuticals’ “price gouging” on Daraprim?

Turing PharmaceuticalsOver the last couple of days, the media has been aghast as Turing Pharmaceuticals CEO, Martin Shkreli announced his plan to increase the price of Daraprim from $13.50 to $750 a pill. Daraprim was patented in the 1950s, and is used for treating parasitic infections in fewer than 13,000 people a year in the U.S.  Turing bought exclusive rights to distribute the drug in the U.S. from Impax for $55 million; drug sales are less than $10 million/year.  Impax itself bought daraprim several years earlier. It upped the price from $1 to $13.50/pill, causing the number of prescriptions to drop about 30%.

Shkreli’s assertion that the profits would be used to develop a better drug for treating toxoplasmosis was met with skepticism.  Shkreli is a former hedge fund manager, not a pharma veteran, and might not be aware that the new drug will have to be tested against daraprim itself. Testing against placebo would be unethical, given that daraprim is part of the treatment standard.  Showing superiority, in terms of effectiveness or side effects, is much more difficult against another drug than placebo. Indeed, given the small number of patients who need the drug, it might be impossible to show the “statistical significance” required by the FDA, since large numbers of patients can’t be tested.

Why, you might ask, can Shkreli price his drug so high and not fear that a generic competitor will undercut him? After all, the daraprim no longer has patent protection.

The answer: Turing Pharmaceuticals has a de facto monopoly, courtesy of the ever-increasing costs of gaining FDA approval, both for new drugs (over $1 billion and 11 years) and generics. Any generic company could make daraprim; its patent expired decades ago.

However, the FDA would require that the company demonstrate that its pill released the drug into the blood stream at the same rate as the original daraprim.  Coupled with the cost of setting up FDA-approved manufacturing facilities for the new drug, a turn-around time of a couple years or so due to regulatory red-tape, and the expensive clinical trials, a generic company would need to commit to spending many millions, perhaps tens of millions, even with the special exemptions that the FDA gives drugs that have small or “orphan” patient populations.  After jumping through all of these costly hoops, the competitor might be unable to take a substantial part of the market from Turing should it choose to lower its prices for the sole reason of preventing the competitor from getting a foothold.

The $750 pill might be considered an example of “corporate greed.”  However, Turing probably wouldn’t have even attempted such a price hike without high cost of FDA-mandated drug development, both new and generic, which virtually eliminated his competition.

 

New House Bill Will Protect Your Freedom to Vape

in Drugs, Liberator Online, News You Can Use, Personal Liberty by Jackson Jones Comments are off

New House Bill Will Protect Your Freedom to Vape

This article was featured in our weekly newsletter, the Liberator Online. To receive it in your inbox, sign up here.

The Food and Drug Administration (FDA) is planning to expand its vast regulatory reach to e-cigarettes and vape products, but new language in an agriculture bill currently in the U.S. House of Representatives could throw a wrench into the machine.

vapeThe FDA plans to use a “deeming rule” to move forward on regulations that would treat e-cigarettes and vape products like tobacco. Though these products can contain nicotine, which is entirely up to the user, they don’t have tobacco. In fact, there is, according to the American Vaping Association, “no fire, no ash, [and] no smoke.”

Many people who use e-cigarettes or vape products do so to quit smoking, using high-nicotine e-juices and gradually lowering the dosage until they’ve kicked the habit. The FDA and public health advocacy groups claim that e-cigarette and vape products are dangerous and target minors through different flavors available on the market. Despite the concerns, studies have shown these products don’t emit significant amounts of toxins, especially when compared to real cigarettes.

“Does this mean e-cigarette vapor is about as safe as air? Not quite, since we don’t know the long-term respiratory effects of inhaling the glycerin or propylene glycol that delivers nicotine into vapers’ lungs,” Jacob Sullum wrote at Reason. “But whatever those effects are, it is safe to say they will not compare to the effects of smoking.”

Rep. Robert Aderholt, R-Ala., has introduced language to the agriculture appropriations bill currently working its way through committee that would reduce the impact of the awaited FDA regulations. The bill would prevent the FDA from reviewing products already available on the market, which, opponents say, could virtually put the industry out of business.

“Without action by Congress, the FDA’s proposed regulations threaten to ban 99 percent-plus of vape products currently available on the market,” said Gregory Conley, President of the American Vaping Association, of the bill’s introduction in the House. “This would be a disaster not only for thousands of small businesses, but also public health.”

“This proposal does not remove the FDA’s ability to regulate vape products. The FDA will retain the authority to immediately move forward with science-based product standards, disclosure requirements, and many other measures. Anyone who claims that this bill would somehow render the FDA toothless is either not familiar with the law or not being forthright,” he added.

While a ban on the sale of e-cigarette and vape products to minors may be appropriate – though most sellers already refuse to sell to anyone under the age of 18 – promulgating regulations that would subject this industry to extensive regulation is a bridge too far.

Interestingly, “Big Tobacco” is encouraging the FDA to implement the regulations. Some traditional cigarette makers are in the e-cigarette business. Reynolds American, for example, the maker of Newport and Camel cigarettes, owns Blu e-cigs. Conley believes Reynolds and other cigarette makers, which are already subject to the regulation and can easily absorb the cost, are trying to snuff out refillable vapor producers, which are typically small businesses.

The FDA regulations are due to be announced in the coming weeks, if not sooner. In the meantime, puff ‘em while you have ‘em, because your freedom to vape may not be around much longer.

FDA Bureaucrats Kill 150,000 Americans

in Liberator Online by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 19 of the Liberator Online. Subscribe here!)

Never mind Ebola, terrorists and school shootings. Abolish the FDA

What Americans should fear is… the FDA (U.S. Food and Drug Administration).

The FDA’s failure to approve life-saving drugs in a timely fashion is killing thousands, even tens of thousands, of Americans every year, critics charge.

Take just one example. An estimated 150,000 Americans have died or will die from idiopathic pulmonary fibrosis — a disease in which tissue deep in the lungs becomes thick and stiff, or scarred, making breathing difficult — because of the FDA’s four-year delay in the approval of the drug pirfenidone — a drug already approved and marketed in Europe (since 2011), Japan (2008), Canada (2012) and China.

That estimate comes from Dr. Henry I. Miller, a medical researcher, founding director of the FDA’s Office of Biotechnology, and 15-year member of the FDA.

That’s more Americans than were killed in any American war except the Civil War and World War II.

And pirfenidone is just one example among many others. The FDA’s slow approval of beta-blocking drugs in the 1970s may have led to the unnecessary deaths of up to 100,000 people, according to Sam Kazman, J.D., of the Competitive Enterprise Institute.

For many years the FDA prohibited aspirin makers from advertising the widely-accepted argument that aspirin could significantly reduce the risk of heart attack for some patients. According to economist Paul H. Rubin, “The FDA surely killed tens, and quite possibly hundreds, of thousands of Americans by this restriction alone.”

Indeed, says Reason magazine’s science correspondent Ronald Bailey, “the FDA’s increased obsession with safety may be killing more people than it saves. …After all, if it takes the FDA ten years to approve a drug that saves 20,000 lives per year that means that 200,000 people died in the meantime.”

The FDA’s approval process can take up to… 18 years. For people desperately fighting fatal illnesses, such long waits are death sentences.

Making things worse, the FDA’s review process is so expensive that,according to Yevgeniy Feyman of the Manhattan Institute: “The typical drug approval costs between $1.2 and $1.3 billion.”

According to Reason magazine’s Bailey, many drugs that could save lives are never introduced because of this cost.

In 2000, economist Daniel B. Klein of the Independent Institute wrote: “Because the FDA process is so expensive, so protracted, and so uncertain, thousands of untold drugs are never discovered or developed. It is impossible to estimate the suffering and death caused, but surely it greatly exceeds 50,000 premature deaths annually.”

Why is the FDA so agonizingly (literally) slow and expensive? Prior to 1962, the average time for FDA approval was just seven months. However, in 1962 Congress passed the Kefauver Harris Amendment, which added a new requirement of proof of effectiveness, in addition to the old standard of proof of safety, for approval of new drugs. Effectiveness is a far more difficult, and expensive, standard to meet.

Perhaps worst of all, the FDA typically doesn’t give even gravely ill patients the opportunity to choose promising treatments it has not approved. As journalist Kate Jenkins asks: “If you had a fatal disease and were told you only had one year to live, wouldn’t you prefer to be allowed to make your own choice?”

This article by Ronald Bailey gives a further look at this mess, and offers libertarian alternatives.

The Independent Institute offers an overview of the situtation and proposals for replacing the FDA.

And for a great movie that dramatizes this life-and-death struggle, see The Dallas Buyers Club starring Matthew McConaughey.