Senators Cruz and Lee Introduce Reciprocity Bill

by on December 14, 2015 at 7:25 am in Economics, Law, Medicine, Uncategorized | Permalink

Senators Ted Cruz (R-Texas) and Mike Lee (R-Utah) have just introduced a bill that would implement an idea that I have long championed, making drugs, devices and biologics that are approved in other developed countries also approved for sale in the United States. Highlights of the “Reciprocity Ensures Streamlined Use of Lifesaving Treatments Act (S. 2388), or the RESULT Act,” include:

  • Amending the Food, Drug and Cosmetic Act to allow for reciprocal approval of drugs, devices and biologics from foreign sponsors in certain trusted, developed countries including EU member countries, Israel, Australia, Canada and Japan.
  • Encouraging the FDA to expeditiously review life-saving drug and device applications, this legislation would provide the FDA with a 30-day window to approve or deny a sponsor’s application….
  • The HHS Secretary is instructed to approve a drug, device or biologic if the FDA confirms the product is:
    • Lawfully approved for sale in one of the listed countries;
    • Not a banned device by current FDA standards;
    • There is a public health or unmet medical need for the product.
  • If a promising application for a life-saving drug is declined Congress is granted the authority to disapprove of a denied application and override an FDA decision with a majority vote via a joint resolution.

In explaining why he introduced the bill Senator Cruz argued:

We continue to lose far too many of our loved ones to the “invisible graveyard,” as economist Alex Tabarrok has described: lives that could have been saved but for a bureaucratic barrier that rejects medical cures and innovation…The bill I am introducing takes the first step to reverse this trend. It provides for reciprocal drug approval, so that cures and medical devices that are already approved in other countries can more expeditiously come to the U.S.

1 Chip December 14, 2015 at 7:29 am

Good.

2 dearieme December 14, 2015 at 9:50 am

Oh what fun defining what meets the requirement of “other developed countries’. Will China count? Taiwan but not China?

There’s no idea so good that it is immune to being fouled up by politicians.

3 Harun December 14, 2015 at 11:38 am

Or one country will lower their standards to get all the business.

Andorra, member of the EU, now offers fast-track approval for low, low prices!

4 Roland December 14, 2015 at 12:26 pm

Andorra is not member of the EU!

5 Jan December 14, 2015 at 12:49 pm

Yup.

6 Michelle December 14, 2015 at 12:28 pm

The actually legislation doesn’t use the phrase “developed countries.” It’s much more specific. The countries (as stipulated by the Food Drug and Cosmetics Act 802(b)) are Australia, Canada, Israel, Japan, New Zealand, Switzerland, South Africa, any country in the European Union and any nation in the European Free Trade Association.

7 dearieme December 14, 2015 at 7:24 pm

South Africa in, China out? There will be ructions.

8 Benjamin I. Espen December 18, 2015 at 2:21 pm

China tends to be the slowest of the bunch, so no great loss there.

9 prior_test December 14, 2015 at 7:35 am

‘an idea that I have long championed’

They don’t call him the Bartley J. Madden Chair in Economics at the Mercatus Center for nothing, you know.

10 MOFO. December 14, 2015 at 9:19 am

BURRRRRRN!!!

11 Michael Savage December 14, 2015 at 7:55 am

A great initiative, but do you think Cruz’s sponsorship will help or hinder?

12 dsgntd_plyr December 14, 2015 at 9:30 am

Hinder. GOP Establishment ***hates*** Cruz. Thankfully Trump is drawing so much heat they may be forced to back him.

13 Urstoff December 14, 2015 at 9:49 am

Why do they hate him? Is he more of a tea party type? All I know is that he’s really smart and started listening to country music after 9/11 for patriotic reasons. And he’s an anti-immigrant Cuban-Canadian American.

14 Mark Thorson December 14, 2015 at 10:42 am

His college roommate Craig Mazin says he’s an asshole.

15 Dude December 14, 2015 at 10:46 am

To be fair to Craig, most people who have interacted with Cruz think he’s an asshole.

16 Alain December 14, 2015 at 11:24 am

A liberal working in Hollywood tells Jezebel that he didn’t think that conservative Ted Cruz is a nice guy? Shocking.

17 Art Deco December 14, 2015 at 2:13 pm

His college roommate Craig Mazin says he’s an asshole.

Mazin’s complaints (offered more than 25 years after the fact) are injurious to Mazin’s reputation (if that’s possible – the man works in Hollywood), not Cruz’s.

18 Harun December 14, 2015 at 12:24 pm

Cruz doesn’t play “failure theater” which the GOP establishment loves to do.

Don’t get me wrong: he’s still a pol, and emits smarminess.

But its why the GOP establishment types don’t like him.

19 Art Deco December 14, 2015 at 2:14 pm

Addison Mitchell McConnell exists to play Capitol Hill games and shovel candy at K Street. Cruz is not interested in that tripe.

20 Sean Rivers December 14, 2015 at 9:58 pm

How do we know Mr. Mazin wasn’t a tool bag himself?

21 The Original D December 14, 2015 at 2:42 pm
22 Dan in Euroland December 14, 2015 at 9:38 am

His high profile a lot more people will hear of the bill and recognize its obvious logic. This in turn will get it passed (with the appropriate pork barrel appendages.)

23 Bob from Ohio December 14, 2015 at 10:53 am

“do you think Cruz’s sponsorship will help or hinder?”

Hinder now but he can sign it into law in 2017.

24 Zinnia December 14, 2015 at 7:57 am

Medical marijuana, anybody?

25 Keith December 14, 2015 at 11:32 am

Nah, I’m good.

26 Slocum December 14, 2015 at 8:12 am

Reciprocity seems like a no-brainer. Who (other than the FDA) has an incentive to block it? I suppose some progressive activist groups might be opposed, but are they really going to trot out Thalidomide yet again and argue, at this late date, that European medical regulations are sub-standard (given that, in general, there’s nothing they seem love more than European regulations)?

27 mavery December 14, 2015 at 9:51 am

The obvious answer is that it encourages a “race to the bottom” (just seeking approval in countries with the laxest standards) and now the drug approval policies of other countries have direct impact on Americans. Generally folks don’t like ceding their sovereignty to other nations, though I usually hear about that more today in the case of international trade agreements.

And beyond reciprocity (but within the scope of the bill discussed) there’s the overt effort to weaken the FDA more generally. For example, politicizing the review process (by giving Congress the ability to overrule the FDA by majority vote) is particularly galling.

Anyhow, that’s why this isn’t a “no-brainer”. Reciprocity is probably a good thing, but I would favor it on a temporary basis (like, you get a 3-year or 5-year exemption but you still have to go through FDA approval) and without the other baggage this bill has.

28 Ricardo December 14, 2015 at 10:06 am

These are all developed democracies. Is there any reason to think Canadian or EU regulators are more careless with the safety and welfare of their citizens than American regulators? The race to the bottom argument makes sense in certain contexts but in countries that have a good track record and where there would be real accountability for corruption or carelessness in the approval process, it seems reasonable to place about as much trust in their regulators as we would in our own. I think a genuine flaw in the way generic drugs are regulated in the United States and how they can lead to exploitative monopolies has been recently revealed.

29 mavery December 14, 2015 at 11:11 am

Like I said above, I think reciprocity is a good idea. I just don’t think its a “no-brainer,” and this particular bill seems to come with a bunch of things that aren’t related to reciprocity and are generally bad ideas.

30 Mo December 14, 2015 at 9:28 pm

The Greeks and Cypriots would never take shortcuts for limited short term gains.

31 David December 15, 2015 at 6:28 am

> Is there any reason to think Canadian or EU regulators are more careless with the safety and welfare of their citizens than American regulators?

Yes. Most famous example is very old now, but was Thalidomide. There are many less famous examples out there, like Acomplia, which have been approved in Europe and subsequently removed from the market for side effects; but were never approved in the US.

32 Erick December 14, 2015 at 11:58 am

Races to the bottom basically never occur, but continue to be brought out as a boogeyman to scare away good reforms over and over.

Why would a country suddenly lower it’s standards just to get a drug approved in other countries faster? The mechanism doesn’t make sense.

33 Harun December 14, 2015 at 12:28 pm

They could theoretically get all the “regulatory” jobs, sort of like ship registries in Liberia, I’m guessing is the argument.

But then their own people might realize that they’re getting dangerous drugs and complain.

34 mavery December 14, 2015 at 1:19 pm

See above, where Slocum implies that the FDA would not be willing to support a measure that made it less powerful and/or took away its business. If this is your model for regulators, it seems obvious that other regulators could be willing to provide easier approval in exchange for more business/power.

35 The Original D December 14, 2015 at 2:46 pm

“Races to the bottom basically never occur”

Maybe not in this case, but China is a quintessential example of a race to the bottom. Unless you think lower wages and atrocious environmental standards have no bearing on Apple’s decision to have their phones manufactured there.

36 Adrian Ratnapala December 15, 2015 at 1:38 am

People are talking at cross purposes here. For some on this thread, “race to the bottom” means only the ability of firms to shop for their favoured regulators. For others on this thread it means a positive feedback loop where the regulators lower their standards in order to win customers.

China is (mostly) only a good example by the first definition. China has higher wages than it used to have, and the environmental standards you speak of are a thing the west invented in the last few decades — not some natural zero point.

37 Peter H December 14, 2015 at 4:38 pm

One good example of a race to the bottom is shipping regulation. Essentially all commercial vessels sailing international routes are registered with flags of convenience. Something like 40% of the shipping tonnage on Earth is registered with Liberia, Marshall Islands, or Panama.

38 Adrian Ratnapala December 15, 2015 at 1:42 am

And the shipping industry seems to work quite efficiently and safely.

I’m no expert on the topic but I thought the main reason for the flags of convenience was labour regulation, minimum wages and such like. Most sailors are well paid by the standards of the countries they come from and poorly payed by the standards of rich western countries. But why should the latter be the standard we are judging the whole industry by?

39 Mark Brophy December 14, 2015 at 12:35 pm

Why need make all drugs legal even if those not blessed by another country? Shouldn’t people be free to buy what they want? Shouldn’t people be free to boycott things they don’t want such as health insurance without paying a fine or “tax penalty”?

40 Mort Dubois December 14, 2015 at 7:13 pm

Edit: “Shouldn’t people be free to sell what they want? Shouldn’t people be free to sell harmful things without paying a fine or penalty?” After all, it’s a buyer’s responsibility to understand the long term consequences of short term decisions. Why burden producers with the costs of finding out whether today’s elixir might be tomorrow’s poison? It’s just a drag on innovation. The market will certainly sort out the good drugs from the bad.

Eventually.

And who cares who’s harmed in that process? Probably poor, stupid people anyway.

41 Jan December 14, 2015 at 12:53 pm

Race to the bottom.

And despite invoking the “invisible graveyard,” I have yet to see any estimate of how many people die because of slow FDA reviews or lack of reciprocity. In fact, FDA’s expanded access program grants patient’s access to literally any experimental drug their doctor says they have a valid need for. I think FDA has only ever denied an application (which take on average less than 24 hours for FDA to approve) for one of these drugs like 2 or 3 times.

42 Phil December 14, 2015 at 9:48 pm

Be nice if Cruz could name a few life saving drugs in the invisible graveyard

43 JJ December 14, 2015 at 8:14 am

Between this and his sumnerizing in front of Yellen, can we talk about how Ted Cruz’s economic policy is being written by someone with a Feedly? The econ blogosphere is great and all, but I’m not convinced this is a good thing. You two are the pillars of the economics blogosphere, so could we get a discussion about the pros and cons of a system where politicians turn to the internet for policy ideas rather than academics? Is there a quality vs creativity tradeoff? Do different rules winnow blogospheric ideas than those of the policy darlings? Would you want Twitter making social policy decisions and why isn’t that the same thing?

This is the future, so please advise.

44 anon December 14, 2015 at 8:34 am

I think it is almost certainly a good thing. Academics like Larry Summers who advise politicians lose a certain about of intellectual credibility when they decide they want to be “in the room where it happens”. There are things Summers can’t say if he wants to keep getting invited to Davos, etc. In fact, because he chose the Blue Team, Summers probably could not say he supports something like the RESULT Act or a market for kidney transplants, even if he does. The econ blogosphere as a marketplace of ideas is more honest and intelligent than any individual economist.

And by the way, I wouldn’t characterize the RESULT Act as a component of economic policy, per se. It’s simply a common sense correction of an egregious policy error. If I realize I have a gas leak and I get it fixed, am I implementing “home safety improvement policy”, or just not being an idiot?

45 JJ December 14, 2015 at 9:52 am

A+ Hamilton reference

46 Josh December 14, 2015 at 11:14 am

Say what you will about the quality of each of the individuals you are referencing’s blogging prowess, but they are academics. I believe Sumner did his PhD at Chicago and is at Bentley, TC did his at Harvard and is at Mason, and Tabarrok GMU and GMU.

47 BorrowedUsername December 14, 2015 at 11:41 am

Both of the blogs that you’re mentioning are written by academics. I’m fairly liberal (although strongly anti-populist, not in ideas but in disposition) and still think that both of these Cruz ideas are good ones. But kind of hard to take his stance on monetary policy seriously when one week he’s calling for a gold standard and the next he think the Fed was too tight in late 2008. He’s very right on the latter, and seriously wrong on the former. So if he says he think we should implement a carbon tax to replace the payroll tax next week but then claims that climate change is a conspiracy the next am I supposed to vote for him?

Let’s judge the ideas not the source and not credit a voice for ideas as being serious when they’re a voice for all kinds of populist nonsense as well.

48 carlolspln December 14, 2015 at 2:57 pm

Better than Cato or AEI.

49 Charlie December 14, 2015 at 8:19 am

Remarkable. Lowers status on both Cruz and tabarrock

50 Ignacio December 14, 2015 at 8:26 am

Congratulations. Let us hope it is approved.

51 Lord December 14, 2015 at 8:38 am

Because airplane tickets are sooo expensive?

52 Cliff December 14, 2015 at 9:18 am

So everyone who needs a lifesaving drug can just fly over to Europe (“only” $2,000 or so), go to a hospital there, buy an unlimited supply of said drug, smuggle the drug back to the U.S. and take it without the supervision of a doctor?

53 HL December 14, 2015 at 12:23 pm

It is shocking how often that a surgery or other care overseas, even in Europe, costs significantly less with travel costs than it would in the USA.

54 Ricardo December 14, 2015 at 12:34 pm

And even more shocking that Medicare won’t reimburse for overseas care, even when it’s cheaper.

55 Jeff R. December 14, 2015 at 10:02 am

Think of the carbon emissions, man!

56 Cooper December 14, 2015 at 1:01 pm

The overwhelming majority of Americans, especially Americans suffering from serious illnesses, are not in a position to fly off to France every time they need a new medical treatment.

I assume you’re being sarcastic here.

57 MK December 14, 2015 at 8:46 am

The two potential problems I see are a) some conflict between demanding the 30 day window and the degree to which the FDA is underfunded/understaffed and b) letting Congress overrule FDA decisions. The whole reason we have an agency making these calls is to depoliticize drug approvals; moving them to Congress takes away that protection. (And sure, regulatory capture already exists to some degree, but I think that’d get worse, not better, if Congress were tasked with deciding whether a drug should or should not be approved.)

58 albatross December 14, 2015 at 2:18 pm

Yeah, having congress overrule FDA decisions sounds like an amazingly bad idea to me. What competence does congress have at drug regulation? Why would we expect this power to be used well? I would expect some smarmy cases where drugs get approved based on campaign contributions or something.

59 Steve Adams December 14, 2015 at 7:03 pm

Having congress decide vs the FDA – maybe let free people decide themselves? On yeah I’m not qualified but government employees with no vested interest in my family members health will make better decisions.

Get your government out my body. Heh 🙂

60 mulp December 14, 2015 at 7:19 pm

Cruz et al want the high tax nations with high government spending on health care pay for developing, testing, and approving drugs so the drugs can be sold in the US for ten times the cost, and virtually no costs to start selling them in the US.

After all, in the US innovation in drugs is getting the exclusive right to profit from the work paid for by other taxpayers in other nations.

61 Andrew M December 14, 2015 at 8:52 am

Regulatory shopping is a significant risk. The drug companies will seek approval at the loosest regulator; then in order to save their own jobs (and to maintain their bureaucratic empire, like C. Northcote Parkinson), the stricter regulators will water down their own processes.

In the financial crisis, the credit rating agencies lulled investors into a false sense of security. The same problem will happen with these drug rating agencies.

62 Mark Thorson December 14, 2015 at 10:45 am

This is it. Regulatory shopping makes this a bad idea, because it drags us down to the lowest common denominator. Thalidomide was approved in Europe, but not the U.S.

63 Bob from Ohio December 14, 2015 at 11:04 am

Thalidomide was nearly 6 decades ago. Anything in my lifetime?

64 Benjamin I. Espen December 18, 2015 at 2:30 pm

Sure, try Mediator (benfluorex). That drug caused somewhere between 500 and 2000 deaths until it was completely withdrawn from the market in 2009. The political fallout from that caused the French equivalent of the FDA, AFSSAPS. to be dissolved and replaced with an entirely new agency.

65 Harun December 14, 2015 at 12:32 pm

Regulatory shopping will reveal best practices and which regulatory agencies have too many barnacles on their hulls.

Also, the voters of the “loosest” regulating country also will be taking medicines, so I doubt there will be a temptation to allow junk as with bond ratings, or whatever.

66 Pithlord December 14, 2015 at 1:09 pm

Also, presumably a country with a loose reputation for regulatory approvals would hurt the brand. If Andorra approves anything, then doctors and patients might rebel against Andorra-approved drugs.

67 mavery December 14, 2015 at 1:22 pm

This logic says that the Arthur Andersen and the 2008 financial collapse was the system working properly.

68 carlolspln December 14, 2015 at 3:05 pm

Arthur Andersen was aiding & abetting control fraud to the tune of US$100M in Enron.

US$15T was lost in 2008 and its aftermath.

I don’t want to ride in a car with you driving.

69 The Original D December 14, 2015 at 2:50 pm

Seems to me this could be easily remedied by putting a label on the drug and linking to a web site that talks how, exactly, the various countries differ and links to the studies done on the drug in question.

Isn’t there already something like a Yelp for drugs?

70 Bill December 14, 2015 at 9:00 am

I have a medical device approved in Lower Slovobia

That administers a shock to the heart

Whenever the Politician wearing it says a lie

That Senator Cruz can wear.

71 TMC December 14, 2015 at 12:06 pm

Or for more of a stress test, hook up Hillary.

72 Bill December 14, 2015 at 12:16 pm

I think Dick Cheney should go first. Hillary will probably stick with the FDA but might volunteer her husband.

73 That Jim December 14, 2015 at 9:12 am

It’s a great idea, but seeing how it would actually reduce Federal opportunities for graft, it will have zero support among Dems.

Cue the knee-jerk NYT editorials about “Big Pharma” and it’s game over, man. Thank God we have the Dems to save us all from those people.

74 Gochujang December 14, 2015 at 9:14 am

Gladwell’s review of “The Death of Cancer” makes me shift my thinking. It makes me more pessimistic about medical progress, more believing that unnecessary deaths are part of it.

So open up regulations, be aware that you will likely kill as many in innovation as you save, making only slow progress toward accepted treatments.

A win-lose but perhaps still a deal we have to take.

75 NP December 14, 2015 at 9:16 am

Fantastic news, sincerely hope reciprocal agreements are proposed in EU, Canada etc.

Now that you have his ear, could you whisper some common sense on immigration policy?

76 MOFO. December 14, 2015 at 9:23 am

18 comments and no one has mindlessly shouted “Thalidomide” yet??

You are wrong, Mr, Tabarrok because Thalidomide.

77 Gochujang December 14, 2015 at 9:40 am

Explicitly, this law would accept this tradeoff, supposedly to reduce that “invisible graveyard” mentioned above.

Per. “The Death of Cancer” that graveyard is actually filled with both kinds of people. Those who missed new treatments, and those that got it.

78 prior_test December 14, 2015 at 10:31 am

He is properly referred to either as Dr., Prof., or the Bartley J. Madden Chair in Economics at the Mercatus Center, among other honorifics. He is most certainly not ‘Mr.’

79 Alain December 14, 2015 at 11:29 am

Check up thread about two posts. Thalidomide. Thalidomide. Thalidomide.

Sigh.

80 MOFO. December 14, 2015 at 12:47 pm

Yea, but check the posting time. My empty evocation of Thalidomide happened like an hour sooner.

First Thalidomide!

81 jdm December 14, 2015 at 9:23 am

Alex, could you provide a half dozen examples of drugs that have been shown to be effective, have been approved in a developed country, but have not been approved in the U.S.?

82 Ricardo December 14, 2015 at 10:19 am

Look at the generic drug market. These are all drugs that have been approved for decades in the U.S. but, because of the regulations imposed by the FDA that make it very expensive and difficult for newcomers to enter the market, we are now being exploited by natural monopolies. I like the idea that this law would be debated because it might force people to start taking notice of the fact that Canadians and Europeans are able to pay a small fraction of the prices Americans pay for nearly identical chemical compounds, even ones that are off-patent and have been a staple of corner drug stores since the 1950s. Examples include Fioricet with codeine, tetracycline, and the now-infamous Daraprim. Cite: http://www.theguardian.com/money/us-money-blog/2015/oct/11/generic-medication-prices-mystery

83 mulp December 14, 2015 at 7:30 pm

So, you do not care if drugs you are sold are manufactured properly with quality control because quality control is expensive to setup?

What the FDA requires is evidence that a manufacturer is correctly manufacturing a biosimilar so it can be substituted for every other approved biosimilar commonly prescribed.

Billions of doses are sold outside the US as branded drugs with half or even none of the active ingredients, so making a replacement of a brand name drug is extremely easy and cheap, leading to high profits for selling for far less than the brand name with quality control. The drugs don’t work, but do you care?

84 Ricardo December 14, 2015 at 9:15 pm

Again, nobody is advocating removing controls entirely. Is there evidence that Canadians and Swedes, for instance, face significantly lower quality generics than Americans? I care about how having separate regulatory regimes in each country creates barriers to entry and natural monopolies that can and are exploited by unscrupulous companies.

85 Nathan W December 15, 2015 at 4:38 am

Near the border, people organize busloads of elderly people to come to Canada to save big money to buy the exact same products that are overpriced in the USA.

86 Derek December 14, 2015 at 11:43 am

Yup, it is mostly generics that are not worth getting approved here. Google Martin skreli, I’m sure that spelling his close enough.

87 Hazel Meade December 14, 2015 at 12:23 pm

Which means the risk is near zero. We’re talking about drugs that have already been approved in the US, and have been so long they are out of patent.

It’s a no brainer. Although the even better solution would be to fix (eliminate) the approval process for generics.

88 John T December 14, 2015 at 9:29 am

What are the risk management implications? This removes a firewall. Failure by an EU review process to find a harmful effect from a drug would now impact considerably more people.

89 rayward December 14, 2015 at 9:33 am

It strikes me as odd that two very conservative Senators would want to delegate to foreign countries (France!) the power to determine which pharmaceuticals can be sold to Americans. Why do they hate America?

90 prior_test December 14, 2015 at 10:28 am

Hey, French breast implants were up to French standards, apparently. Who cares about a mix up between medical and industrial grade silicone, right? https://en.wikipedia.org/wiki/Poly_Implant_Prothèse

91 Bill December 14, 2015 at 9:39 am

What do you think Senator Cruz’s opinion would be for anyone to import FDA approved drugs from Canada or any other country that negotiate’s a lower price.

After all, these are FDA approved drugs. They would “more expeditiously come to the United States.”

He should be for this, right?

92 Bill December 14, 2015 at 10:03 am

Very interesting article in STAT about how Republican candidates are trying to come up with something to say about high drug prices, countering Dem calls for direct negotiation of drug prices for Medicare, which actually shows approval among the majority of Republicans.

“Senator Marco Rubio (R-Fla.), seen here testifying before the House Committee on Oversight and Government Reform, initially took a hard line against the pharmaceutical industry.It could be a tricky issue for them. Republican candidates must grapple with the fact that any action to lower drug costs could mean government intervention, typically uncomfortable territory for the GOP.So far, conservative candidates have stuck to old reliable ideas like reforming the FDA and boosting research funding. But even some on the right say they wouldn’t be surprised to see a Republican take a more interventionist approach before the campaign is over.“It’s not clear to me that ‘Reform the FDA’ is going to be enough as part of their platform,” said Yevgeniy Feyman, deputy director at the Center for Medical Progress at the conservative Manhattan Institute for Policy Research. “Even the Republican plans are probably going to include a little bit [of] government intervention.”Conservatives also worry that they will be stepping onto Democratic turf if they talk too much about drug prices, and some are frustrated that the issue has taken on an outsized role in the public discourse.Nonetheless, engaging on drug costs now seems unavoidable for Republicans. Rubio, during a New Hampshire town hall meeting, initially took a particularly hard line against the pharmaceutical industry, blaming some drugmakers for raising prices so sharply that they are threatening to “bankrupt our system.” …
Feyman at the Manhattan Institute cited polling by the Kaiser Family Foundation that found even a large majority of Republicans would support policies like allowing Medicare to negotiate directly with drug companies and setting price caps for expensive medicines that treat cancer and hepatitis C.It’s hard to imagine a Republican endorsing such direct price controls, but he noted that as a 2008 presidential candidate, Senator John McCain supported allowing prescription drugs to be imported from Canada.“It wouldn’t be explicit price controls. It even carries this free trade connotation almost,” Feyman said. “But it effectively amounts to price controls because you’re importing price controls.”

A very interesting article postulating that the FDA is the cause of high drug prices theme will be the response to complaints about high US drug prices.

http://www.statnews.com/2015/11/10/issue-drug-prices-gop-putting-toes-democrats-turf/

93 NP December 14, 2015 at 9:41 am

One thing I would be concerned about (and I’m sure someone has written about) is that this, once enacted, would open a back door to make it easier to ban drugs that are banned elsewhere. Say there is a breakthrough in something like gene therapy and a moral panic in another country leads to multi country ban. You could see a similar situation with legalized recreational drugs, possibly.

Overall I’m in favour, these are just some possible concerns.

94 John December 14, 2015 at 9:43 am

So, we are trusting another countries bureaucracy over ours? Which drug company does this benefit? Legally, who is responsible should these drugs cause issue with the person/people who take them. Specifically, which countries that we are following, and what are their rules for putting a product on the market?

95 prior_test December 14, 2015 at 10:25 am

‘So, we are trusting another countries bureaucracy over ours?’

Sure, as long as the standards are laxer and/or the approval costs lower. What, did you think this about anything but profit?

96 John December 14, 2015 at 10:35 am

Just wanted to be sure it was about profit, and less accountability.

97 TMC December 14, 2015 at 12:10 pm

The FDA has any accountability??

98 John December 14, 2015 at 6:57 pm

Um, so you want to trust accountability of another country? Is there a specific illness that this is addressing, are we taking care of Big Pharma or is this ideological window dressing?

99 Hazel Meade December 14, 2015 at 12:28 pm

You know it IS possible that the approval costs might be lower AND the standards NOT be laxer.

100 mulp December 14, 2015 at 7:54 pm

If that nation’s taxpayer pay much more for the testing and approval process, then it will be cheaper without being laxer.

The FDA charges high fees because Republicans wanted a market solution, not a government taxpayer funded central planner solution providing free services to very profitable corporations.

101 Harun December 14, 2015 at 12:36 pm

There was a famous employee of the FDA who didn’t approve a single drug for decades.

He was famous because he also would drive to work in the fast lane going exactly the speed limit, causing traffic jams single-handedly.

I guess you can trust that guy: he never approves anything so no risk is ever taken, and he has a perfect record.

102 Jeff R. December 14, 2015 at 10:04 am

Whether it actually passes or not, congratulations to you, Alex.

103 Quite Likely December 14, 2015 at 10:06 am

I’ve been doing a lot of research on this topic for work recently. Unexpectedly enough, the US has a much stricter regulatory regime for medical products than Europe does – and we are much better off for it.

Europe has ended up with this crappy system because they can’t decide whether the regulation should be on the national or European level. Currently products can be approved at any one of dozens of agencies in different countries, which compete for customers based on how quickly and reliably they can move the product through the regulatory process. The US on the other hand has a nice sensible unified regulatory body in the form of the FDA. There have been a number of big medical device related scandals in Europe recently and they’re in the process of tightening up their rules a bit, though proposals to really solve things by moving to an American style system didn’t work out.

So basically, let’s stick with the FDA having to approve our medical products, rather than outsourcing it to unreliable foreign agencies.

On the other hand, I am down for making FDA approval of good-looking foreign medical products a higher priority. Apparently there are a lot of drugs out there, particularly in Russia, that could be very useful in the US but don’t get over here because American pharmaceutical companies can’t patent them, and there isn’t anybody else willing to spend the ridiculous amounts of money it takes to perform the trials the FDA deems necessary for public safety. I’m down for a big investment in an FDA testing division to put any drugs that are being used productively overseas through the paces and allow them on the market as a generic drug as quickly as possible.

104 prior_test December 14, 2015 at 10:23 am

‘There have been a number of big medical device related scandals in Europe recently’

Hey, those breast implant patients had it coming, trusting a French supplier –

‘Poly Implant Prothèse (PIP) was a French company founded in 1991 that produced silicone gel breast implants. The company was preemptively liquidated in 2010 following the revelation that they had been illegally manufacturing and selling breast implants made from cheaper industrial-grade silicone since 2001 (instead of the mandated medical-grade silicone they had previously used). The hundreds of thousands of unapproved implants sold globally by PIP from 2001 to 2010 were found to have a 500% higher risk of rupturing or leaking than approved models, as well as being implicated in at several deaths due to systemic toxicity and several cases of induced breast cancer. The scandal, which produced fears of a massive health disaster, prompted a full recall of the company’s implants by the French health ministry in 2010, by which time the company was already defunct.’ https://en.wikipedia.org/wiki/Poly_Implant_Prothèse

105 MOFO. December 14, 2015 at 10:25 am

“The US on the other hand has a nice sensible unified regulatory body in the form of the FDA.” Have you ever actually worked with the FDA? I ask because ive never heard anyone who deals with the FDA describe them that way.

106 Bob from Ohio December 14, 2015 at 10:58 am

“nice sensible unified regulatory body in the form of the FDA”

“nice” and “sensible” do not go with FDA or in fact any “regulatory body”

107 Art Deco December 14, 2015 at 11:07 am

Agreed. My gut tells me that we may regret it if this measure passes. Not that innovative medications are not helpful (I’ve a relation currently being treated – quite successfully – for chronic myeloid leukemia). It’s just that most only induce marginal improvements and generate iatrogenic ailments. In my family, the ‘invisible’ graveyard is filled with people who had an immoderate appetite for liquor or tobacco.

108 collin December 14, 2015 at 10:08 am

I would vote for it only if the US consumers get to pay the same prices of the country that passed the drug for use.

109 prior_test December 14, 2015 at 10:20 am

The sort of people that fund things like the Bartley J. Madden Chair in Economics at the Mercatus Center do not approve of that sentiment. Instead, they wish that the entire world would pay U.S. prices – while being able to pick the cheapest location for getting their product certified, of course.

These are not the sort of people that worry about hypocrisy, after all.

110 Cooper December 14, 2015 at 1:07 pm

Cheaper prices would be nice but even access at inflated prices to the new drugs would be a great help.

The alternative is dying…

111 Bernard Yomtov December 14, 2015 at 11:55 am

I’m of two minds here. I hate the idea of Congress setting a 30-day window. That’s the sort of idea lawyers who have no idea about the process put forth. “Hey, if you get 30 days to respond to a lawsuit you get the same to test a device.” The very phrase “30 days” smacks of a completely arbitrary rule.

Similarly I hate the idea of Congress overruling an FDA rejection. If they want to have a discussion about standards, and maybe change FDA practices by statute, OK. But on individual cases, no thanks. There is way too great a chance of someone slipping an approval in somewhere, and I don’t trust Congress, not Cruz and Lee or anyone else, to make intelligent judgments about there. Scream about “unelected bureaucrats” all you want.

OTOH, it does seem that approvals from other countries ought to be taken into account as a way to speed up significantly approval here, but it does not need to be an all-or-nothing rule.

112 Hazel Meade December 14, 2015 at 11:59 am

I think Ted Cruz is an asshole, but all things considered, he is INFINITELY better than Trump.

113 Nigel December 14, 2015 at 12:11 pm

Agreed – but on this, the asshole makes more sense that Art D’s gut…

114 Hazel Meade December 14, 2015 at 12:15 pm

At least he’s reading the right blogs.

115 Bernard Yomtov December 14, 2015 at 12:23 pm

I agree about the asshole part, but all things considered, if I had to choose, I’d choose Trump. And then load up and head for Canada.

116 Hazel Meade December 14, 2015 at 12:25 pm

Is that because Trump promises to blow a lot of cash on infrastructure projects?

117 anon December 14, 2015 at 12:50 pm

NAFTA Superhighway will allow Bernard a 30 minute commute from Canada to Los Angeles.

118 Hazel Meade December 14, 2015 at 1:53 pm

But Trump is against NAFTA, so probably not. Bernard will have to take a bus from Vancouver to Seattle so that he can go through the proper border checkpoints and pay his tithe to the Teamsters.

119 Bernard Yomtov December 14, 2015 at 5:26 pm

I don’t work in Los Angeles. I have been there maybe once in my life.

As for my preference, despite my very low opinion of Trump, I don’t regard him as psychotic. I do think Cruz is out of touch with reality.

120 Art Deco December 14, 2015 at 1:22 pm

I think Ted Cruz is an asshole,

http://www.greenvillegazette.com/ted-cruzs-college-roommate-just-exposed-this-and-ted-isnt-going-to-be-very-happy/

It has been said before – by people adept at self-indicting remarks

He’s managed to stay married, his children’s names are not in the papers, and if his Senate staff or the Solicitor-General’s office in Texas have had high rates of turnover, the media are taking their time about reporting it.

(Recall Bob Dole was notorious for staff turnover and sued his first wife for divorce a propos of nothing in particular. That’s what an asshole looks like).

121 carlolspln December 14, 2015 at 3:35 pm
122 Art Deco December 14, 2015 at 5:19 pm

Your complaint makes no sense unless you want me to believe you thought television commercials with testimonials in them were unscripted. No, you’re not unctuous, just a fraud.

123 carlolspln December 14, 2015 at 6:49 pm

Oh. You must not have thrown up in your mouth.

Like me.

124 carlolspln December 14, 2015 at 3:39 pm
125 Mo December 14, 2015 at 9:38 pm

Bob Dole was married for 24 years before getting a divorce. Cruz has another decade to make it that long.

126 Glenn December 14, 2015 at 12:52 pm

I think we should stop the development of all new drugs with the exception of antibiotics and vaccines. We could do a cost plus on the antibiotics and vaccines or simply have the government pay for the research. If you wanted a new drug that someone may invent you can pay for it out of your pocket. There would probably be none since it costs so much to bring one to the market but we have plenty of drugs now. The average life span would be shortened by 30 days or so. Not really noticeable in the grand scheme of things. We would be able to reduce medical costs by about 10% and Big Pharma would not be there to kick around anymore.

By the way my mother in law was in a nursing home and the director of nursing there told me the average patient in the home was taking 14 different medicines every day.

127 Art Deco December 14, 2015 at 2:18 pm

I’ll wager you they were taking 14 medications a day when they were admitted, not at the initiative of the nursing home attending physician. It’s amazing how little track primary care physicians keep of what specialists are doing. In my nexus, a visiting nurse got on the horn to an internist and pointed out to him that his patient was taking 27 medications, of which 9 caused mental fogginess.

128 Jan December 14, 2015 at 12:58 pm

This is a solution in search of a problem.

FDA grants patients access to unapproved, investigational drugs all the time–like thousands of times. All a patient has to do is have his doctor certify that he needs the medication and then FDA approves the application, in less than 24 hours on average. It is a two-age form.

http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM432717.pdf

http://www.fda.gov/ForPatients/Other/ExpandedAccess/ucm20041768.htm#how-to-submit

129 Hazel Meade December 14, 2015 at 1:57 pm

The problem isn’t unapproved, investigaitonal drugs, it’s generics. Reciprocity allows us to import generic versions of drugs that are already approved in the US and out of parent, but havn’t passed the FDA’s idiotic secondary approval process for generics.

130 Jan December 14, 2015 at 2:08 pm

In certain situations–like shortages or price-gouging–I actually think reciprocity is a fine idea. Though it shouldn’t be the norm.

131 Steve Adams December 14, 2015 at 7:04 pm

Why shouldn’t more freedom be the norm?

132 Bill December 14, 2015 at 4:02 pm

Hazel, That is not the type of reciprocity that the bill is addressing–reciprocity of FDA approved drugs; it is reciprocity of approvals.

133 Hazel Meade December 14, 2015 at 5:22 pm

Yes, but most of the drugs that are not approved in the US are generic versions vof drugs that are approved. See JDM and Derek’s comment’s above. The biggest impact will be to allow the import to generics.

134 Bill December 14, 2015 at 10:49 pm

Hazel, Saying an unapproved generic version of a foreign approved drug is just saying it is an unapproved generic version of a drug. Generic or non-generic is irrelevant to its US approval status. It is a drug with did not–for whatever reason–obtain FDA approval. By the way, generic doesn’t necessarily mean cheaper.

135 Ricardo December 15, 2015 at 2:54 am

“t is a drug with did not–for whatever reason–obtain FDA approval.”

The reason is often because generics are low-margin and any would-be manufacturer needs to spend millions of dollars on approval for its specific production process. So we wind up with significant barriers to entry and monopolistic behavior by manufacturers with approval of which Daraprim is one of the most egregious examples but hardly the first. Someone has yet to point to evidence that the quality of drugs in places like Canada or Sweden is materially worse than in the U.S. I don’t see Congress taking serious action to regulate drug prices or subsidize the approval process so importing generics from countries with high standards in order to introduce more price competition in the U.S. market seems like the best (or second-best, depending on your point of view) way to protect consumers.

136 JW December 14, 2015 at 4:57 pm

Just one country has to approve?

137 Mark Barbieri December 14, 2015 at 7:25 pm

I would prefer a similar, but different approach. Instead of working from a list of approved approvers, I would let people buy any drug that was approved by any national health agency. The packaging would have to have a logo showing one (sellers choice) of the agencies doing the approving. Then consumers could shop based on which approvers they trust. The FDA would get a really special gold logo to make it easy for those that want to restrict themselves to the status quo.

138 steve December 14, 2015 at 8:19 pm

Written by Grace Rattue
Published: Fri 18 May 2012 at 2pm PST
email8
Although the drug approval process in the U.S. has been perceived as too slow, the nation approves new drug treatments faster and earlier than Europe and Canada, according to researchers at Yale School of Medicine.

The study, conducted by Nicholas Downing, a second-year medical student and Joseph S. Ross, M.D., assistant professor of internal medicine at Yale School of Medicine, found that the median total time to review was:
322 days at The U.S. Food and Drug Administration (FDA)
366 days at The European Medicine Agency (EMA)
393 days at Health Canada
The teams findings was published online by the New England Journal of Medicine. Regulatory review is the final step in the process of bringing new drug treatments from the lab to patients. As a result, it is vital that the review process is efficient in order to get promising new therapies to patients sooner, while ensuring drug safety.

Downing explained:

“The perception that the FDA is too slow implies that sick patients are waiting unnecessarily for regulators to complete their review of new drug applications.”

The researchers reviewed drug approval decisions of the FDA, EMA, and Health Canada between 2001 and 2010 in order to determine the time it took to review novel therapeutics and timing of key regulatory events. The team selected Europe and Canada as a comparison due to the fact that they face similar pressures to approve new therapies quickly while ensuring drug safety.

Downing said:

“Among the subsample of drugs approved for all three regulators, the FDA’s reviews were over three months faster than those of the EMA or Health Canada. The total review time at the FDA was faster than EMA, despite the FDA’s far higher proportion of applications requiring multiple regulatory reviews.”

Downing continued:

“Examining novel drugs approved in multiple markets, we found that 64% of medicines approved in both the U.S. and in Europe were approved for U.S. patients first, and 86% of medicines approved in both the U.S. and Canada were also approved first in the U.S.”

139 carlolspln December 14, 2015 at 11:57 pm

‘The Invisible Graveyard, as Alex Tabarrok calls it’ [SNIP]

No wonder its invisible!

Well, so much for this urban myth.

NEXT!

140 steve December 14, 2015 at 8:28 pm

Also, European countries often have much better monitoring, especially of devices. Without their centralized data collection on prosthetics the issue we had with total hips a fe years ago would not have been noted for a lot longer.

Steve

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