Rand Paul Wants to Bring European Medicine to the United States

From a Rand Paul press release:

Today the U.S. Senate voted to pass the Food and Drug Administration Safety and Innovation Act (S.3187), which included language inserted by Sen. Rand Paul. This language would force the FDA to accept data from clinical investigations conducted outside the United States, including the European Union, to speed the process of getting life-saving drugs on the market by the FDA.

“Innovation in clinical drug trials should not be confined to the data received from trials in the United States. Findings from countries that incorporate the same rigorous requirements as we do when developing life-saving drugs and devices should be accepted by the FDA as well,” Sen. Paul said.

I agree but I would go further: Any drug or medical device introduced into say the EU, Japan, Canada or Australia ought to be automatically approved in the United States within 90 days. Such a procedure would reduce delay, eliminate needless duplication and cut costs.

Think about it this way: Europeans don’t regard the FDA as the best or final arbiter of safety and efficacy so why should we?

See FDAReview.org, especially the section on reform options, for more.

Comments

Medical researchers in Europe are the reason why worthless 'homeopathic' cures - you know, the stuff that's diluted so much that it's nothing but pure water - are still being sold as safe and effective medicines. Their numerous studies showing that this stuff actually works are a textbook example of scientific failure, if not outright scientific fraud.

Research quality varies an awful lot. There's much to gain by loosening the FDA's grip here, but let's make sure the baby and the bathwater remain separate.

The Homeopathic proponents are a fringe; I very much doubt that mainstream European science agrees.

Is there any evidence that the overall quality of European science or medicines is any lower? I am skeptical.

Homeopathic 'remedies' are specifically exempted from the normal review process by the Federal Food, Drug, and Cosmetic Act passed in 1938. It was done at the behest of a couple of senators who were fans of homeopathy.

1. Homeopathy studies have data that would argue against using homeopathy.

2. The reason why homeopathy is legal and sold, whether in the US or in Europe, is not because of scientific studies, but rather because it is generally exempt from regulation.

Taking 1 and 2 together, this change has nothing to do with the legal status or regulation of homeopathy.

I am, however, generally more sanguine about people wasting their money on useless water than I am about people wasting *my* money on useless water, which happens more in Europe AFAICT. The NHS definitely does pay for homeopathy in some cases; I'm not aware of US insurance companies doing so (and if any do, I'd like to send my business elsewhere.)

However, that's a separate issue from the one in this post.

Well, if it just pure water, it should be perfectly safe. Honestly, I am not sure why we want to regulate it at all.

If it is water, and if it is a working placebo, then wtf are we talking about here?

Then all studies will drift to the easy country.Better idea is to limit price in USA to a benchmark of G7 prices.

you read an economics blogs and think price fixing is the solution?

Zing!

The USA is a very large market. We should be approaching "most favored nation status" just like the Apples and Walmarts of the world. The medical providers would be able to us this against the New Zealands of the world to say that they can not sell their products as low as before. First world pricing would become similar in all rich countries. I would expect USA cost to fall and others to rise. This is a another approach so that it will not make sense to go to Canada to get the products since the prices will be similiar.

I do read economics. We spend 17% of GDP on health care so our system does not benchmark well against the Norways of the world. If you think the USA patient is getting a free transparent medical market please " make an appointment to my medical practice so that I can retire on you and a few others".

The FDA should have all data and act for the public good .

Price controls leads to shortages. Personally, I like having new medical treatments, ymmv. A far better solution would be for other countries to stop imposing price controls.

The U.S. spends more on healthcare overall because we do more -- twice as many transplants, 2x as many MRIs, more cancer screening, etc, etc. This is not especially cost-effective, but that's where the incentives point.

Why isn't removing all import-controls on drugs* a better solution to equalize first world prices?

If people could indeed freely import from Canada prices would be forced to equalize.

[* Fine, one could mandate these imported drugs have approval in some first world nation]

In that case, Rahul, they would equalize at whatever the lowest gov't-imposed price was. The effect is export the worst effects of price controls to everyone.

@TallDave

So, if import-barriers were lifted you think drug prices in America would go up and not down? Do I read you correctly?

That would be a pretty interesting scenario; are there any other historical examples where lifting an import-barrier increased prices of a good? Sound very counter-intuitive.

Lowest, Rahul, not highest. Ignoring arbitrage costs, why would anyone pay more than the lowest available price?

Thus you would get the usual effects of price controls -- a shortage. Why spend billions to create new drugs if any government anywhere can immediately make the investment unprofitable in every country?

But now, they haven't just ruined drug development in their own country, they've ruined it for everyone.

The best solution is allow free market pricing everywhere. Then no one would need import controls and companies would have the largest incentive to develop ways to cure everything that ails us, including aging. History strongly argues this will result in the best overall outcomes. If the world had been doing this since the 1950s life expectancy would probably be 10-20 years longer by now.

Oops, bad tag. Sorry about that.

Lowest, Rahul, not highest. Ignoring arbitrage costs, why would anyone pay more than the lowest available price?

Thus you would get the usual effects of price controls -- a shortage. Why spend billions to create new drugs if any government anywhere can immediately make the investment unprofitable in every country?

But now, they haven't just ruined drug development in their own country, they've ruined it for everyone.

The best solution is allow free market pricing everywhere. Then no one would need import controls and companies would have the largest incentive to develop ways to cure everything that ails us, including aging. History strongly argues this will result in the best overall outcomes. If the world had been doing this since the 1950s life expectancy would probably be 10-20 years longer by now.

I agree with your "free market everywhere" plan; but if we cannot get all the way there, I think, a unilateral "free imports" strategy is the next best option. It is better than the current situation where American drug prices are higher than most other places.

"The U.S. spends more on healthcare overall because we do more — twice as many transplants, 2x as many MRIs, more cancer screening, etc, etc. " ~TallDave

This isn't really true. Finding the reasons spending is so much higher in the US receives quite a bit of research, and utilization isn't the largest component.

Here is a link to Ezra Klein referencing some of the studies about explaining the spending differences (of course there is much more out there): http://www.washingtonpost.com/blogs/ezra-klein/post/why-an-mri-costs-1080-in-america-and-280-in-france/2011/08/25/gIQAVHztoR_blog.html

I was under the impression the Dartmouth Health Atlas reported as many as 1/3 of procedures in the US were medically unnecessary. That's serious overutilization.

http://www.dartmouthatlas.org/tools/faq/

Jeff -- Ezra's piece isn't very good. Arnold Kling's book Crisis Of Abundance is a far superior look at at why U.S. healthcare is so expensive, and the answer turns out to be because it's better, and we buy a lot more of it even when it is not very cost-effective (such as the Dartmouth study alludes to). We get gold-plated healthcare because consumers are insulated from cost/benefit decisions. Do you really need an MRI for a chronic headache? Most government-run systems say no.

Of course, one other factor is that other countries free ride on the research paid for in our prices -- short of nuking them, we probably can't prevent that.

They authors considered, for instance, the idea that Americans were simply using more health-care services, but on close inspection, found that Americans don’t see the doctor more often or stay longer in the hospital than residents of other countries. Quite the opposite, actually. We spend less time in the hospital than Germans and see the doctor less often than the Canadians

These are terrible measures of health care spending -- how often a population sees the doctor would not predict how often they get expensive treatments.

@TallDave- There is not especially good evidence that we provide better care, and I did read Kilng's book. You need to remember to look at mortality, not just survival numbers. We do not consistently provide more care either. Japan does more MRIS. Some European countries do more total joint replacements.

On drug shortages, you should realize that the US has been experiencing widespread drug shortages that are, fo rthe most part, not being seen elsewhere. Elsewhere has a lot more governmental interference.

Steve

Is this a price control or a subsidy to reduce costs?

That would mean the gov't was making up the difference between market and consumer prices. In this case, the gov't is setting the price.

One word argument in favor of more than one testing regime: Thalidomide.

You beat me to it, GW.

How? It's the weakest of the links not the strongest that determines approval and safety.

If 3 nations had a "drug approval unified zone" it would become rare for studies to run in more than one nation.

It wouldn't have mattered, it was generally believed such drugs could not pass the placental barrier.

http://en.wikipedia.org/wiki/Thalidomide

Remember, we're talking about the 1950s here.

more testing wouldn't have mattered? what are you talking about

"Although thalidomide was never approved for sale in the United States, millions of tablets had been distributed to physicians during a clinical testing program. It was impossible to know how many pregnant women had been given the drug..."

the testing was done. It was done on humans. As will all the testing that is done that differentially affects animals and humans and humans versus other humans and humans versus pregnant humans and pregnant humans versus humans at different stages of pregnancy.

the (main) problem with thalidomide is that it was given during a (critically) critical period of which we were ignorant (until partially thalidomide revealed this to us) for a condition that was not worth taking a medication during pregnancy for. As a result, pregnant women have little pharmaceutical support and Thalidomide was shunned in cargo-cult fashion for use in cancer and contexts such as, I don't know, any time other than a critical period of gestational development.

As I read the narrative, I don't see it as a home run for regulation, but for reporting.

I'm saying no one would have tested for that effect, because everyone was sure it was impossible.

As the old saying goes -- "It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."

read your well researhed link that you provided
"In the United States, pharmacologist Frances Oldham Kelsey M.D. withstood pressure from the Richardson-Merrell company and refused Food and Drug Administration (FDA) approval to market thalidomide, saying further studies were needed"

Hey! All drug testing could be coordinated by a U.N. Agency. Yikes!

lff

I am reliably informed by obviously-morally-superior Left-Libertarians that Rand Paul is a contemptible bigot.

Therefore, his opinion doesn't matter.

If you think his opinion matters, then you are a bigot.

In my experience, Left-libertarians aren't.

The only one I really know of is WW, and if he is they, then they do the guilt by association thing.
Ron Paul called to say "how 'bout now?"

It raises an interesting question of second mover advantage, which might deserve the attention of those concerned with innovation and low hanging fruit.

Organisations sometimes let other organisations do all the expensive trial and error of medicines, working practices, technologies and policies.

Nobody would object if Rand Paul pointed to, say, a Dutch policing method proven to work and said "let's import that to America". Indeed, numerous states copied to some degree the idea of zero tolerance policing. Then it spread to other countries. Everyone let New York shoulder the risk and expense of getting it working, then used it themselves.

This is a fundamental principle of the Swiss cantonal system: "tax competition is ... the discovery procedure for the exploration of new and innovative policy designs. Successful strategies are imitated and adapted. Their creators are invited to international events. Unsuccessful strategies, by contrast, are avoided" (Hans-Rudolf Merz).

I love the provocative title of the post. ;-)

I'm not a lawyer but I've worked for years at the intersection of law and economics. I believe your proposal would run afoul of the Administrative Procedure Act. Nice idea, but impossible.

It wouldn't run afoul of the Administrative Procedures Act if the new law was considered to amend the APA.

There are many examples where a new law amends or overturns prior statute while leaving the prior statute intact. Apparent inconsistencies usually find their way to the US Supreme Court which often deftly argues that inconsistencies are a figment of one's imagination. Congressional intent is paramount, at least under the current majority view. Omissions in law are considered to be advertent.

To be more clear, if the FDA decided on its own statutory authority to accept EU approval, it would have to abide by the APA. That is, it would have to make a notice of proposed rulemaking, accept public comment, and then render a decision. The decision could interpret current rules to be encompass new drug approval processes or it could create a new rule.

The FDA could not make a decision (or rather, implement a rule) which is beyond the statutory limits of its charter or any subsequent statute.

This is a total red herring. FDA already does accept most European data. In fact, some applications rely solely on foreign trial data. This was simply a way to appease Paul--it will actually do nothing. The only cases where foreign data is not accepted are when the trials are not conducted under good clinical practices or are generally not up to FDA's normal standards.

Alex's proposal is even more misguided. In some cases there are quite different standards for approving products. For example, medical devices must be shown to be effective and safe to enter the U.S. market. In Europe, they must only be safe. Many of the metal-on-metal hip replacements that were broadly approved in the EU and elsewhere were not approved here due to the FDA's tough standards. Now hundreds of thousands of elderly patients across the globe will have to have dangerous and costly revision surgery on their hips due to weak standards.

"In Europe, they must only be safe"

"Now hundreds of thousands of elderly patients across the globe will have to have dangerous and costly revision surgery on their hips due to weak standards."

If procedures have to be safe, how are hip replacements going to be "dangerous"? Why will they "have to have" the surgery?

This is just an example of how even across regulatory regimes that both agree "demonstrated safety" is fundamental, there can be significant disparities. EU regulators thought a certain new procedure using metal-on-metal hip implants, called "resurfacing," was safe. It wasn't. The FDA did not approve this new device/procedure because they had reservations. Now, many recipients of these products have had serious reactions to the metal ions shedding into the tissue around their artificial hips and must have them completely replaced.

So your real complaint is that you think European safety standards aren't rigorous enough. The "effective" criterion is a red herring.

Do you have any aggregate data to support this position? I have a hard time taking anecdotes too seriously.

I think you're missing the point. These different regulatory systems all have differing standards. The US and the FDA have a different conception of what exactly "safe" means than do the Europeans. Therefore, it does not make sense to have a reciprocity agreement with other countries for medical product approvals.

Unfortunately, with devices, it impossible to get a comprehensive view of what products have encountered safety problems in the US vs EU. In the EU, adverse event reporting and many safety issues are not transparent and often handled at the country level, even though products are approved at the EU level. So you will not find any systematic analysis of EU vs US safety for medical devices. Anecdotes are it, I'm afraid, but the information that is available is compelling.

FDA has done a fairly broad sweep and found a number of medical devices approved in Europe, but not by FDA, that have had significant safety issues: http://www.elsevierbi.com/~/media/Supporting%20Documents/The%20Gray%20Sheet/38/20/FDA_EU_Devices_Report.pdf

"I think you’re missing the point. These different regulatory systems all have differing standards."

It does if you think safety standards don't have to be uniform within a country.

"So you will not find any systematic analysis of EU vs US safety for medical devices. Anecdotes are it, I’m afraid, but the information that is available is compelling. "

You complain about adverse reporting skewing aggregate statistics, and in the next breath suggest an alternative that is CERTAIN to incorrigibly suffer from both selection and hindsight bias.

k.

"FDA has done a fairly broad sweep and found a number of medical devices approved in Europe, but not by FDA, that have had significant safety issues"

Leaving aside conflict of interest arguments......... The question isn't whether European errors can be found, the question is whether they are in gross excess of American errors.

The errors of the FDA are well documented. Many commentators in our circle, of which I am sure you are familiar, have concluded that FDA errors outweigh their successes. Beta-blockers are the relevant anecdote.

You can choose to look at the information that is available and make an assessment. Or you can choose to wait for the perfect, unbiased, comprehensive study that will in fact never happen because the information is simply not available. But if you go with the second option, in the interim you may not take a position that one system or the other is better, because it would go against your principle that you need comprehensive, unbiased data to make a defensible judgment.

So, you're defending your arguments with anecdotes now, are you?

"Or you can choose to wait for the perfect, unbiased, comprehensive study that will in fact never happen because the information is simply not available"

Or I can say that I'd prefer it if the FDA had no controls whatsoever, and to the extent that the European criterion reduces these controls, I support it.

"But if you go with the second option, in the interim you may not take a position that one system or the other is better, because it would go against your principle that you need comprehensive, unbiased data to make a defensible judgment. "

You're just rephrasing my position with an incredulous tone. That's not an argument. If you're not sure if the FDA is more accurate than the EU agencies, you should just be agnostic about the switch.

"So, you’re defending your arguments with anecdotes now, are you?"

Tens of thousands of people died as a result of the FDA's slow approval process. BBs had been legal for years in Europe prior.

It is a significant anecdote. How many people will die as a result of toxic hip displacements?

"Or I can say that I’d prefer it if the FDA had no controls whatsoever, and to the extent that the European criterion reduces these controls, I support it."

Well, that is frankly crazy. I will see your unregulated pharmaceuticals utopia and raise you an abolition of the FAA. Toxic meds and death defying 727 rides with drunken pilots for all.

"Tens of thousands of people died as a result of the FDA’s slow approval process. BBs had been legal for years in Europe prior."

Again, unsubstantiated. Why not hundreds of thousands? Maybe millions!!

+1

Your comment is an informed comment. EU clinicals and data comforming to US standards are used all the time

And why would these (remember Bill, they're corporations, so they're EVIL) companies do this? To save time getting FDA approval & access to the wealthiest market on the planet. They won't do more testing than is required to get access to the markets that they wish to serve. If they did, they could be sued by their shareholders for malfeasance.

Corporations aren't evil. How can they be anything but True Neutral, assuming that a corporation can have an alignment at all? Those who work in and own corporations might be anything from Lawful Good to Chaotic Evil. But I do like how you make stupid, blanket assumptions about those to your left.

RWing, I truly do not understand your comment. EU clinicals and data comforming to US standards are used all the time

OTOH, as we saw with the melanoma scanner, the "effective" requirement is often abused to stifle innovation.

This device wasn't held up because it was ineffective. It was held up because unless a doctor is specially trained to recognize which subset of lesions the device was actually helpful on, then there would be a good chance the product would give the physician a false sense of assurance and he would simply not order a proper biopsy in cases where it is needed.

This was resolved by the company simply agreeing that it would only sell it to dermatologists with the proper training in how to use the scanner. I don't think we can count that as "abuse to stifle innovation." That is protecting patients.

You are incorrect.
Any doctor is legally allowed to use any device, (yes podiatrists are legally allowed to do open heart surgery). This was blocked because dermatologists lobbied against it.

You can view the official FDA approval letter here: http://www.accessdata.fda.gov/cdrh_docs/pdf9/p090012a.pdf

The first two paragraphs clarify that the device may only be used by dermatologists who have completed a training program on the appropriate use of MelaFind. You are correct that such restrictions are not usual for devices, but this product is a special case.

That objection would be more credible if the device was less accurate than dermatologists.

The value of the device was to make it easier for non-dermatologists to perform evaluations. Now that value is lost, and the money won't be saved, and more people will die. A win for the dermatologist lobby, a loss for everyone else. Classic rentseeking.

A "safe and effective" regime is not always better than a "safe" regime. The downside of interventions-not-done are often neglected.

This is generally not true. Medical products are usually compared to the standard of care. If the standard of care is no treatment at all, or palliative care, then that is the comparator used in study. But even FDA bows to industry concerns sometimes. "Me too" drugs for example, are consistently allowed onto the market having been tested against placebo, even when there is no evidence that the new drug is any improvement over the therapies that are already available.

FDA recognizes the costs of treatment denied, and allows some products with questionable effectiveness profiles onto the market. But they also recognize that any product can have hidden risks, so a product that confers no additional clinical benefit isn't going to help anyone.

Part of the "effective" regime is that the procedure does not produce too many false positives or overstates the risk.

Recent decisions by insurance companies to limit payments for mammography and prostate screening are exactly for such a purpose (while not under FDA purview, it's an example).

The history of the FDA and our laws is from the preponderance of "snake oil" remedies that were pedaled in the 19th century and early 20th century. The "remedies" might be completely harmless (i.e. safe) but not effective as advertised for the ailment. The rationale for limiting the sale (or advertisement) of ineffective drugs is that it draws patient attention away from treatments that are proven (through trials) to be effective. In other words, the snake oil wastes precious time and resources and allows the ailment to progress beyond the point where effective treatment can handle it.

The libertarian argument for a safety-only regulation is to permit free-thinking, rational individuals to make informed decisions for themselves. The market failure here that government is addressing is asymmetric information. In prior centuries, the consumer problem was a lack of information. Today, the problem is too much information (or misinformation).

The solution, in my mind, is a fully transparent FDA and laws that permit informed consent to non-standard treatment. A non-standard treatment may not make claims that have not been verified.

In no case though, does FDA approval or informed consent bar lawsuits. So the iron hand of tort liability might serve to correct the asymmetric information problem. However, this raises variation in returns. Tort reform seeks to reduce such variation. There does not exist any system of direct or indirect regulation that can fully eliminate information rents.

Did it occur to anyone else that Paul's insistence on this language conflicts with the heightened concern he seems to show for issues of U.S. sovereignty? Wanting to get out of the U.N., etc.

If you don't understand how the two issues are different, you probably shouldn't talk about libertarians in public, against the certainty of embarrassing yourself.

This is what our EU friends call "mutual recognition" and, yes, it's probably a good idea.

Think about it this way: Europeans don’t regard representative government as the best or final arbiter of societal policies so why should we? -- unknown, 1774

I never expected to see a garbage appeal to authority in a blog post here.

Only in this case, "Europeans" have a lot of non-scientific reasons to use something other than the FDA. Specifically, resisting "American imperialism".

Lots of problems with the FDA. This is not a rational argument.

From the rest of the press release and the rest of the amendment:

"Sen. Paul also introduced an amendment yesterday to the bill that would curb the Food and Drug Administration's overreach and abuse of power. Sen. Paul's amendment, No. 2143, would disarm the FDA, toughen up the mens rea component of many prohibited acts under the Food, Drug and Cosmetic Act in an attempt to end armed raids on natural food stores and Amish farmers, and stop FDA censorship of truthful claims of dietary supplements. It failed passage by a vote of 78-15."

It's good idea, but it may not make much difference -- there's a paper from Nature showing that because the U.S. has the last vestige of a free market for pharmaceuticals, we get new treatments an average of a year sooner anyway.

I always had the impression Canada and Europe were a bit slower to approve drugs not so much because they were trying to be safer or were less efficient, but because it was a way of rationing and saving money. They skip the first year or two of expense. I've no real evidence to support it, other than that it seems to happen even with things that will obviously be approved and that if I was trying to be sneaky and cut down on expenditures I might do it.

Thats exactly what TallDave pointed out.

Did I miss something in the article or the links in it? Where was the motivation talked about?

I'm not trying to be argumentative; I just didn't see it.

I think Finch's point is slightly different -- they aren't just avoiding market pricing, they're also trying to keep the overall budget down by deliberately adopting new drugs more slowly irrespective of price.

It wouldn't surprise me if that happened, though I doubt they'd advertise it. Those systems have to find ways to ration.

Rather than price fixing, just allow medicare to negotiate with pharma. I have no problem with data from EU trials being used, but there should be scientific standards that are met and verifiable. Else trials will flow to those countries with lax standards.

GCP and ICH implementation in countries would be the first line of standards required.

In Hungary, in fact, I recall that they do approve medicines based on US FDA results. Small country free riding. It is a strategy.

It's also an illustration of how regulations are a seal of approval and have an information component regarding quality.

Heh. Everyone free rides on us -- defense, drug research, "dollarizing," now regulation.

I wonder how much the U.S. contributes to non-U.S. world GDP in this fashion (or perhaps I should say "has stolen from it"). I would bet it's around a trillion per year.

TallD, Foreign companies, for example, like to register their securities in the US, subjecting themselves to our regulations and oversight, to raise the value of their stock as US and foreign investors regard the oversight as being superior to their own country oversight.

So confused. Rand Paul wants to make a government agency work better? What's the angle here?

Wouldn't this have ramifications for Mifepristone (RU-486)?

I mean this sounds 100% in line with practical libertarianism. I'm just confused because it's coming from Rand Paul.

"So confused. Rand Paul wants to make a government agency work better? What’s the angle here?"

Faster approval? fewer people die from being coercively denied access to drugs? It seems lik a good angle to me.

"Wouldn’t this have ramifications for Mifepristone (RU-486)?"

No, none whatsoever.

" I’m just confused because it’s coming from Rand Paul."

..er why? He's a very practical guy. You have been listening to the left-libertarians and cosmotarians too much, they are pretty clueless when it comes to the actual positions of candidates.

Yeah I will echo this. Rand is not his father and is far more pragmatic and seems to get much less hung up with policy and ideological nuances.

And don't get me wrong, I love his dad, but Ron is definitely more ideological while Rand is more practical. Both types of people are needed in a movement so I welcome them both.

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