FDA drug safety program is adding billions to US healthcare spending

An FDA program intended to make sure all drugs on the market are safe and effective is unintentionally adding billions to U.S. healthcare spending, according to a new study cited by STAT

In 2006, the FDA started a program called the Unapproved Drugs Initiative to force drugmakers to get regulatory approval for drugs they had on the market that were available on a grandfathered basis because they predated stricter requirements.

The goal was to make sure all drugs on the market were safe and effective. But some drugmakers decided not to pursue regulatory approval, leaving open opportunities for monopolies that allowed some of them to hike their prices, according to STAT

The analysis, conducted by Vizient, a healthcare performance improvement company, found that the program may be adding $20.3 billion to U.S. healthcare spending. 

Between 2013 and 2019, four drugmakers received FDA approval for drugs they already had on the market, and each found they had no competition because the manufacturers of the other versions of their drugs didn't seek regulatory approval. 

In three of the cases, the drugmakers were also granted different types of marketing exclusivity, and they raised the prices of their drugs between 525 percent and 1,644 percent, STAT reported. 

An example of this occurred earlier this month, when Belcher Pharmaceuticals received orphan drug status for its version of dehydrated alcohol, a drug that has been available for years, and hiked the price by nearly 600 percent. 

Vizient also pointed out 19 unapproved drugs on the market now that could potentially follow the same pattern, which would cause another $8.75 billion in healthcare spending in the next five years, according to STAT

The FDA is aware of the unintended consequences of the program and said in a statement on its website that it is, "keenly aware of price fluctuations that can occur on the heels of its regulatory actions and takes steps within its authority to minimize the duration, if not the extent, of those price hikes. Although following the FDA approval process may result in cost increases for a drug over the short term, the risks to the individual patient are substantially reduced, and the benefits are assured for the long term."

Read the full article here

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