FDA targets price-gouging drugmakers with plan to import rival products

House Committee on Education and the Workforce
HHS Secretary Alex Azar cited dramatic price increases in announcing that the FDA would look at temporary drug imports to ease patients’ access to drugs. (CSPAN)

If you’re an off-patent drug sitting pretty with no rivals—generic or otherwise—enjoy it while you can. To stir up competition, FDA is looking at importing drugs that are approved in other countries but not yet in the U.S.

It’s an unprecedented step that in some ways flies in the face of the Republicans’ long-held aversion to allowing drug imports for pricing reasons. But it fits right in to FDA Commissioner Scott Gottlieb’s mission to bring down prices by encouraging competition.

The difference this time? It’s targeted. Citing “dramatic price increases” on unchallenged, off-patent meds, HHS Secretary Alex Azar said Thursday the FDA would put together a work group to weigh importation to resolve shortages and thwart monopoly pricing power. Unlike broader importation proposals voted down repeatedly in Congress, this approach would be targeted specifically toward drugs that patients can’t get because they’re in short supply or too expensive.

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“[I]mportation could help address price hikes and supply disruptions that are harming American patients,” Azar said in a statement announcing the FDA work group. “We have seen a number of both branded and generic examples in recent years where a single manufacturer dramatically hikes the price for a drug unprotected by patent or exclusivities.”

Essentially, the FDA will be looking at situations like those that have spawned big pricing controversies in recent years. Think Daraprim, the toxoplasmosis drug that Turing Pharmaceuticals famously bought and then jacked up its price by 5,000% simply because it could. The drug had been off patent for decades but had no competitors to hamper its pricing power.

That’s one of many examples. In a step toward fostering competition to those off-patent monopoly meds, the FDA has already compiled a list of those products—a sort of hit list for would-be competitors to consult.

Now, the agency is taking that a step further with its work group, which will look at the policies and processes necessary to allow foreign imports to fill the void. Rather than wait for a drugmaker to decide to develop its own contender and go through the lengthy process of doing so, the agency would look for rival drugs approved in other countries.

Gottlieb cited a laundry list of questions for the group, including how the agency would decide when it needed to step in. Another question addressed an oft-cited objection to foreign drug imports: How to determine they’re safe?

Plus, the FDA took pains to emphasize that the imports would be temporary, lasting only until a U.S. drug could be approved or a shortage resolved. No innovation-quashing allowed, Gottlieb’s statement said; the group would be tasked with determining how “to ensure such a policy maintains the incentives and balanced framework that supports  manufacturers seeking FDA approval for these products, as this is our primary objective.”