Results for “fda”
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Double Jeopardy Disaster

Getting a new drug or medical device approved by the FDA is a long and expensive process. The FDA is risk-averse and pays much more attention to the risks of approving a bad drug than to the risks of failing to approve a good drug. As a result, every economist who has ever written a serious analysis of the FDA has come to the conclusion that less regulation would mean more new drugs and more saved lives. (See FDAReview.org for more information. Gary Becker offers a recent statement.).

Approval, however, does not end a firm’s problems because even then it faces the risk of a debilitating lawsuit. Consider how bizarre this is: A team of statisticians, physicians and medical researchers pores over years of clinical data to pronounce a product safe (always noting that this means safe relative to the product’s expected benefits) and then a jury of 12 randomly selected Joes and Janes second guesses them, awards plaintiffs billions of dollars and drives the firm into bankruptcy. This has happened more than once.

FDA approval ought to be a “safe harbor.” Many states already have laws along these lines but they have been weakly enforced. The Bush administration’s efforts to limit lawsuits against firms that have passed FDA approval is a therefore a necessary and welcome piece of common sense. This doesn’t mean that you can’t sue a drug manufacturer. If the manufacturer lies to the FDA or to your physician or if they don’t produce the drug according to specification then by all means sue away. Every drug, however, has side-effects and every drug works differently in different people. That means that there has to be some sort of cost-benefit test to decide if a drug should be marketed. There is an argument for using tort law instead of the FDA to do this test – an argument that gets weaker the more out out-of-control the courts become – and there is an argument for using the FDA instead of tort law but there is no argument for adding tort law on top of FDA regulation, that is a double jeopardy disaster.

Shorter patent lives mean shorter lives

People talk about the high price of pharmaceuticals as if high prices lasted forever. In fact, within a year of the expiration of a pharmaceutical’s patents, prices will typically fall by more than 50 percent as generic producers enter the market. Patents nominally last for 20 years but the effective patent life is much lower because patents are typically granted years before a product has cleared FDA review. The effective patent life of the average new pharmaceutical in the 1990s averaged just 12 years (see here for some references). Competition from competing but non-infringing pharmaceuticals makes the de facto patent life even shorter.

Thus, my response to the seniors and others clamoring for lower pharmaceutical prices is to be more patient. Does this sound harsh? Consider this, the people who are demanding price controls are not simply asking for lower drug prices they are asking for lower prices on the newest drugs. Lower prices for drugs introduced 15 years ago are already here. Remember, those drugs were recently considered the very best modern medicine has to offer, so it’s not like I am expecting those who can’t afford the newer medicines to go back to using leeches.

Price controls or other such plans such as reimportation may bring cheaper pharmaceuticals for a short period but we will then have a much smaller supply of new drugs forever. Only the shortsighted would buy that prescription.

Tailor made pharmaceuticals

Better genetic information is beginning to reveal why some drugs work for some people but not for others. (Here’s a CBS Marketwatch story, requires free subscription). In addition to the heath benefits, there are some political-economic benefits to better understanding of how drugs interact with personal chemistry.

Drugs that benefit a minority of the population are sometimes not approved by the FDA because their side-effects for the majority are deemed to outweigh the expected benefits. But if we can identify more clearly who the drugs will benefit and who they will harm, more drugs will be deemed safe and will get through the FDA process. As a further result, the costs of drug development will be reduced.

Genetic information can also help to avoid the opposite error. It often happens that in a clinical trial a drug doesn’t look beneficial overall but does appear to work in some subpopulation (e.g. African-Americans with disease of type X that has progressed to stage y). The danger is that some results like this are bound to occur by chance alone and thus do not necessarily imply true efficacy. If we can show that the subpopulations do (or do not) have systematic genetic differences from the majority population, however, we can rule out (or rule in) chance as an explanation and better separate the wheat from the chaff.

Thanks to Jim Coomes (a long-time reader from Pattaya, Thailand!) for the link.

It’s a mad, mad, mad, mad cow world

The market is often accused of under-providing safety. Consider, however, that the Department of Agriculture is refusing to let a Kansas beef producer test its cattle for mad cow disease. Yes, you read that right. The producer, Creekstone Farms, is losing $40,000 a day because it exports its beef to Japan where such tests are required. The testing of individual cattle, however, runs contrary to the DOA/industry message that American beef is perfectly safe without expensive testing.

The mad cow case is a clear example of regulatory capture. By the way, the DOA aquired its power to decide minimum and maximum testing standards test under the Virus Serum Toxin Act of 1913 – it was captured a long time ago.

Don’t be surprised if the DOA requires such testing in the near future. I am reminded of the similar folic acid story that I wrote about with Dan Klein at FDAReview.org:

In 1992, the federal Centers for Disease Control and Prevention (CDC) recommended that women of childbearing age take folic acid supplements. Studies showed that taking folic acid reduced risks of babies suffering neural-tube birth defects such as anencephaly and spina bifida. The FDA immediately announced, however, that it would prosecute any food or vitamin manufacturer that placed the CDC recommendation in its advertising or product labeling (Calfee 1997). The public did not learn of the importance of folic acid until Congress passed the Dietary Supplement Health and Education Act of 1994, which loosened the FDA’s vise on the advertising of vitamins and other dietary supplements. Within only a few years of its ban on publicizing the CDC recommendation, the FDA made a complete turnabout. Since 1998, the agency has required manufacturers to fortify a variety of grain products with folic acid–that which is not prohibited is mandatory.

Off-label drugs

Alex has written much about the importance of off-label uses for drugs, which are not generally restricted by the FDA. I came across the following in the 17 March 2004 Wall Street Journal, Marketplace section:

A high-price biotech drug, developed in the 1980s to treat a rare form of hemophilia, is fast becoming a blockbuster, with physicians around the world using it to stanch severe bleeding from car accidents, gunshot wounds and postsurgery hemorrhaging.

But here’s the rub: The drug, a human bloodclotting protein called NovoSeven that costs $5,000 a dose, hasn’t been approved by the Food and Drug Administration for such uses…Some doctors are hailing NovoSeven as a lifesaver, with word spreading about near-miraculous cures of dying patients. It’s the new wonder drug,” says Thomas Scalea, director of the shock trauma center at the University of Maryland Medical Center. He says the center has used the drug 80 times in three years, saving about 35 lives.

Not all doctors agree about the merits of the drug, and insurance companies will not reimburse drug usage for this purpose.

Question: Should the FDA have regulatory power over the off-label use of this drug to stop traumatic bleeding? If it had had such power, would any of these lives have been saved at all? In his paper, Alex asks the requisite follow-up question. If it is bad idea to give the FDA regulatory power over off-label uses why give it so much power over initial uses?

As things stand now, the FDA will not allow “human trials” of the drug in the laboratory, although real life trials occur in hospitals on a regular basis. Furthermore the company’s sales force cannot promote the drug for non-hemophilia uses and must wait for doctors to ask, noting that it employs 25 full-time people simply to handle the flood of inquiries.

Further comment by Alex is welcome. This is his bailiwick not mine, I just thought the example was especially striking. Here is some basic information about the drug, here is the company’s web site.

Artificial heart won’t save lives

An FDA panel announced today that they would support approval of a new artificial heart. NPR and other media suggested that the new heart, which is designed only for temporary use and is not portable, would save lives by extending survival time until a transplant became available. But even if the artificial heart performs exactly as designed and even if it prolongs the lives of those who receive it, it won’t save lives overall.

The mathematics is simple; there are approximately 2200 hearts donated for transplant every year (data here). That means we can save 2200 lives a year and no more. All the artificial heart can do, therefore, is change who gets saved. Some people who previously died will live long enough to receive a transplant but this means there will be one less heart available for someone else on the waiting list. The artificial heart will make the waiting list longer but it will not save lives.

The only way we can truly save lives is to increase the number of organ donors. As readers of Marginal Revolution will know I have suggested financial compensation and organ donor clubs as the only realistic solutions.

Credit cards under your skin

Read Randall Parker on this new innovation:

Advanced Digital Solutions has announced their Veripay embedded radio frequency ID (RFID) cash and credit card technology.

Some day we may be able to walk into a store and be completely alone and not have to see a living person in sight, imagine walking out holding the items you want and being billed instantly just as you leave the store. No confrontations, no customer service, no cute check-out girl, isn’t our future grand…The chip is embedded in the arm.

Parker also quotes this more formal descrption of the technology:

VeriChip is a subdermal, radio frequency identification (RFID) device that can be used in a variety of security, financial, emergency identification and other applications. About the size of a grain of rice, each VeriChip product contains a unique verification number that is captured by briefly passing a proprietary scanner over the VeriChip. The standard location of the microchip is in the triceps area between the elbow and the shoulder of the right arm. The brief outpatient “chipping” procedure lasts just a few minutes and involves only local anesthetic followed by quick, painless insertion of the VeriChip. Once inserted just under the skin, the VeriChip is inconspicuous to the naked eye. A small amount of radio frequency energy passes from the scanner energizing the dormant VeriChip, which then emits a radio frequency signal transmitting the verification number. In October 2002, the US Food and Drug Administration (FDA) ruled that VeriChip is not a regulated device with regard to its security, financial, personal identification/safety applications but that VeriChip’s healthcare information applications are regulated by the FDA. VeriChip Corporation is a wholly owned subsidiary of Applied Digital Solutions.

By the way, the first 100,000 registrants to be “chipped” get $50 off.

My take: I don’t see this product taking off as a useful means of buying things, though of course it would no longer be a problem if you forgot your wallet at home. Too much talk about “mark of the beast” and all that, plus the general creepiness of the idea. As Parker suggests, more likely applications are for people at risk of having heart attacks (the device could send a signal, much like a cell phone call), diabetics, epileptics, Alzheimer’s patients, and children at risk of kidnap or running away from home.

The best new ideas in applied science

Read this feature article from Popular Science magazine, or just buy the December issue. My two favorite new products are the following:

1. Binoculars that repeat the last 30 seconds. Instant replay, right there in your hands, and only $600 from bushnell.com.

2. Speakers that know how to listen. The speakers can measure what kind of sound they are producing in a particular room, and adjust their output accordingly to sound even better, they are called Beolab 5. This item costs a steeper $16,000, I will buy them when they start paying bloggers, from Bang-Olufsen.

Alex will be interested to hear about the new “Lifeport Kidney Transporter,” see organ-recovery.com, now FDA-approved, which makes it easier to move kidneys around the world, the device makes a soon-to-be transplanted kidney last for 17 more hours than previous technologies.

End Phase 3

Harvard neurologist Peter Lansbury argues in the WP that we should end mandatory Phase 3 clinical trials for new pharmaceuticals. Aside from the expense of Phase 3 trials (hundres of millions of dollars) and years of delay he writes that:

There are also scientific reasons to replace Phase 3. The reasoning behind the Phase 3 requirement — that the average efficacy of a drug is relevant to an individual patient — flies in the face of what we now know about drug responsiveness. Very few drugs are effective in all individuals. In fact, most are not effective in large portions of the population, for reasons that we are just beginning to understand.

It’s much easier to get approval for drugs that are marginally effective in, say, half the population than drugs that are very effective in a small fraction of patients. This statistical barrier discourages the pharmaceutical industry from even beginning to attack diseases, such as Parkinson’s, that are likely to have several subtypes, each of which may respond to a different drug. These drugs are the underappreciated casualties of the Phase 3 requirement; they will never be developed because the risk of failure at Phase 3 is simply too great.

Lansbury also recognizes the importance of off-label prescribing and how it flies in the face of FDA power.

Once the FDA has approved a drug based on its effectiveness against one condition, it can be prescribed for any other condition. This practice recognizes that your physician is best equipped to evaluate all the available information and advise whether you could benefit from a particular drug. About 40 to 50 percent of all drug use is for such unapproved, or “off-label,” uses. Some drugs that “failed” in Phase 3 trials for one condition, but were approved for another, are still widely prescribed for the first because physicians agree that the evidence shows they can be effective.

I agree with Lansbury’s analysis and so do a lot of physicians. See my papers Assessing the FDA via the Anomaly of Off-Label Drug Prescriptions and Do Off-Label Drug Practices Argue Against FDA Efficacy Requirements? Testing an Argument by Stuctured Conversations with Experts.

Drug reimportation

Most libertarian economists oppose drug reimportation, on the grounds that the resulting lower prices would harm the incentives for R&D. Richard Epstein provides a good statement of this case, with links to the relevant debates, including some libertarian dissenters, such as Ed Crane and Roger Pilon, both of Cato.

I have wondered, however, whether libertarians ought to reconsider their opposition to reimportation. Recall that the libertarian position paints the FDA as a significant obstacle to drug research.

I suspect that allowing drug reimportation would, in the long-run, break down the authority of the FDA. Once Americans are looking to abroad for medicines, the flood gates will be opened. They will want to buy medicines from Mexico, Europe, and indeed from all over the world. These medicines, of course, will not have met with FDA approval. It is not a matter of pure logic that legal reimportation would lead to this broader class of imported drugs, but I think it is what the political equilibrium would look like. Illegal drug importation is already on the rise; legal reimportation would legitimize and publicize the overall idea of getting drugs from other countries.

So, if we allow reimportation, the FDA will either have to become much stronger, and more intrusive (in conjunction with other governmental agencies, such as customs perhaps), or the FDA will cede much of its effective power, while likely keeping its nominal powers. But in the long run it is hard to see how to enforce restrictions on drug importation, especially once reimportation is legal. Drugs don’t take up much space, and the exact nature of their content is not easily tested. You can have a customs dog sniff for pot, but that same dog cannot tell whether a drug is of pure quality of adulterated, or is something else altogether. If libertarian think that the FDA does more harm than good, perhaps they should welcome reimportation as moving us toward a greater reliance on markets.

Athletes will be the first

Athletes will be the first to be genetically engineered. Suspicions have already been raised about the 14 and 15 year old record-breaking track stars from China. He-Man mice have been created in the lab. All this makes me blase about drug doping and the recent banning by the FDA of a previously difficult to detect steroid. Indeed, I look forward to seeing the new superathletes in action. Imagine the possibilities in all fields of human endeavour. The new concertos written for 12 fingered pianists will be glorious.

Dalkon Shield, Silicone Breast Implants, Fen-Phen

A bill to move class action lawsuits out of the state courts and into federal courts narrowly failed in the Senate. Senator Tom Daaschle, explained his opposition to the bill this way, “It is the Dalkon shield, it is silicone breast implants, it is fen/phen.”

Good list. Wrong conclusion. The A.H. Robins Co. was driven into bankruptcy and forced to pay 3 billion dollars in damages but the Dalkon shield has been shown to be effective and safe. Silicone breast implants have been reviewed in studies by the AMA, the Institute of Medicine, the Canadians, the French, the British and others. All conclude that there are no unusual problems with the implants (any surgery has risks of course). The FDA will probably soon allow the implants back onto the market but in the meantime Dow-Corning has been driven into bankruptcy and tens of millions of dollars have been spent on lawsuits. Fen/Phen does looks like a serious health risk but tort law had nothing to do with removing the product from the marketplace. (Moreover, the issue is complicated. Only the Fen in Fen/Phen looks dangerous and that was approved in 1973).

Where are all the new drugs?

The NYTimes reports that “introductions of new drugs plummeted last year to 17 from a high of 53 in 1996, despite a near doubling in annual research spending, to $32 billion.” The Times blames lost lab productivity from mergers. Based on close second-hand experience – my wife is a microbiologist who worked at a pharmaceutical firm as it underwent a merger – I can attest to the fact that mergers create havoc. Reaping the potential economies of scale and scope that drive the merger requires that product lines be discontinued and new lines of hierarchy established. But the power struggles involved in the transition are dissipative and disheartening. It’s not uncommon for some research programs to be canceled and then started again as new coalitons form. The uncertainty alone is draining. The best of the researchers have no stomach for this ordeal and jump ship.

The Times gets a number of things wrong, however. It can take a dozen or more years to research, develop and get a new drug approved so it makes no sense to compare this year’s research spending with this year’s output. The fact that research spending is up even though current output is down is a positive signal of potentially better things to come.

The Times also misses the fact the FDA was approving drugs faster in the late 1990’s than for many decades previously. The FDA got burned, however, as Pulitzer prize-winning critics accused it of endangering the public. Sadly, the FDA learned its lesson and slowed down. (See here for more on FDA incentives and why the Pulitzer prize committee did us all a disservice.)

Finally, the Times says nothing about why the mergers are taking place. One reason is the rising cost of pharmaceutical research. It now costs $900 million dollars to bring the average new drug to market. Firms are merging in order to better control these costs and diversify their risks. FDA reform could lower these costs.