Friday, August 26, 2016

Why do we have suddenly increasing drug prices?

Timothy Holbrook has an interesting post The real reason the EpiPen and other off-patents are so expensive , which raises issues with the role of the FDA in pricing issues for drugs.

Interestingly, though, the patent system is not to blame for many of these price hikes we hear about in the news. Instead, these drugs, such as the EpiPen, are off-patent, suggesting that generic competition should help keep prices lower.


But even absent consolidation, there is another barrier that appears to be in play: regulations by the FDA, and the huge backlog. Even generic drugs need regulatory approval to be sold, which makes sense: we don’t want fly-by-night companies selling impure or otherwise harmful drugs.

But obtaining approvals does add costs and time to competitors attempting to enter the market. One potential EpiPen competitor, Teva Pharmaceuticals, failed to obtain regulatory approval, delaying their entry into the market Another competitor, Sanofi, recalled its competing epinephrine delivery device because it may be delivering in incorrect dosage. That leaves Mylan alone in the market, with the power to raise prices, which is what it did.

A different issue with the FDA, not mentioned by Holbrook, can be found in recent litigations over


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