The FDA Seeks a New Way to Review Old Drugs Without Causing Prices to Soar

Chuck Peterson of Omaha, Nebraska, recently experienced a swollen, painful knuckle caused by arthritis. He got a prescription for colchicine.

Doctors have used the drug for treating gout and other rheumatic conditions for well over two centuries.

When Peterson went to the pharmacy, he was shocked to discover that a two-month supply of 120 pills, distributed by Par Pharmaceutical, would cost him $225 out-of-pocket on his Medicare Part D drug plan. Taking it for an additional three months, as his rheumatologist wanted him to do, would cost him nearly $600 under his drug plan.

A dozen years ago, the drug cost about a dime per pill.

“My reaction was ‘goodness gracious,’ or maybe something I couldn’t say in polite company,” he said.

The startling price hike was precipitated by a well-intentioned federal government program, called the Unapproved Drugs Initiative, that created unforeseen consequences. It was supposed to protect the public by ensuring that older drugs went through a Food and Drug Administration approval process to determine their safety and efficacy and that older versions were taken off the market.

In November, the departing Trump administration unexpectedly ended the FDA program that led to a price spike for colchicine and other older drugs, saying it drove up drug costs and in some cases caused shortages. Now the FDA is considering whether and how to replace it, while advancing the Biden administration’s goal of reducing prescription drug prices overall. An announcement is expected soon.

But health care policy analysts and executives fear drugmakers still will find ways to maintain high prices for drugs already approved through the program, and to jack up prices for remaining unapproved drugs on the market, estimated to number at least 1,500. They note that the manufacturers of drugs that were granted FDA approval and market exclusivity through the UDI program, including colchicine, have aggressively used the courts to block other drug companies from marketing cheaper generic alternatives, often for many years.

Colchicine was one of many drugs that were sold before the FDA was created in 1938. No manufacturer ever took it through the agency’s approval process for determining safety and efficacy, but its approval for wide use was effectively grandfathered in.

Then the FDA, under the UDI program it launched in 2006, approved a branded version of colchicine in 2009, gave the manufacturer seven years of exclusivity and ordered previous versions off the market. With no competition, the price soared to about $4.50 a pill. That has since dipped to less than $2 a pill since generic competitors were approved by the FDA and entered the market in the past few years. However, the price is still much higher than before.

Price increases of drugs approved through UDI have boosted U.S. health spending by $3.2 billion so far, and will increase costs by tens of billions more in coming years, according to a study last year by Vizient, a purchasing firm serving hospitals.

Drug policy experts would like to see the Biden administration develop alternatives to UDI for reviewing the safety and efficacy of unapproved drugs that don’t lead to big price hikes. One way, especially for common drugs that physicians and hospitals have used safely for decades, is having the FDA work with health care providers to collect and analyze data on their own through patient registries.

“If other entities collect the data, thus minimizing the research expense, it would perhaps be more appropriate for the manufacturers not to take enormous price increases,” said Steven Lucio, a vice president  at Vizient.

Other older drugs whose prices skyrocketed after drugmakers won exclusive rights to sell branded versions include selenium, a common mineral supplement used in patients who need feeding through a stomach tube. It soared 1,190% after American Regent gained FDA approval for branded “Selenious Acid” in 2019.

Belcher Pharmaceuticals hiked the price of branded “Dehydrated Alcohol 99%,” used to treat severe heart disease, 668% after it won FDA approval in 2018.

Hospital executives are particularly vexed about the price hike for Vasostrict — formerly known as vasopressin and first developed in 1928 — because that drug, used to increase a patient’s blood pressure, has been widely used in intensive care units to treat covid-19 patients. From 2019 to 2020, hospital spending for the drug rose 56%, to nearly $600 million, according to the American Society of Health-System Pharmacists.

The price of the drug increased 1,644% after Par Pharmaceutical won FDA approval in 2014, according to Vizient. It received market exclusivity through 2035. And Par Pharmaceutical has hiked the price 7% to 10% each year, said Eric Tichy, vice chair of supply chain management at the Mayo Clinic.

“I don’t mind paying a lot for innovative drugs, but vasopressin has been around much longer than I’ve been alive,” he said. “Par has made a windfall from covid. That’s just gaming the system. It’s outrageous.”

Two other drugmakers have sought, unsuccessfully so far, to develop and market a generic alternative to Vasostrict. A German drug company, Fresenius Kabi, sued Par in a New Jersey federal court for alleged antitrust violations in blocking its access to information about the drug’s active ingredients. Par sued Sandoz for patent infringement to block that drugmaker from marketing a generic version of vasopressin. Par recently reached confidential settlements with both companies, Tichy said.

None of the three companies would comment on the settlements.

Heather Zoumas-Lubeski, vice president of corporate affairs for Endo International, which owns Par, justified Vasostrict’s price by saying the company “invested significant time and resources in the formulation, approval, and manufacturing” and “continues to invest in efforts that benefit patients.”

Drug manufacturers, including makers of generics, opposed the elimination of the UDI program and have urged the FDA to continue to grant approvals and market exclusivity to branded versions of previously unapproved older drugs.

They particularly oppose the Trump administration’s proposal to let the FDA determine that some older, non-patented drugs are “generally recognized as safe and effective,” known as having GRASE status, and don’t need to go through a new drug approval process.

Broadly granting GRASE status would “allow potentially unsafe, ineffective, or poor-quality drugs to enter the U.S. market, and put patients at risk,” the Pharmaceutical Research and Manufacturers of America warned in December in response to the Trump administration’s request for comments on what should replace the UDI program. The trade group stressed that the FDA is not allowed under law to consider drug prices in making approval decisions.

But drug policy researchers say drugmakers generally have done little or no original research to improve the safety and efficacy of old unapproved drugs or expand clinical uses for these products. They also say there’s no justification for the much higher prices of the FDA-approved branded versions.

One exception they cite is L-cysteine, an amino acid used in intravenous nutrition for preterm infants, which Exela Pharma Sciences improved by removing potentially harmful metals. The company won FDA approval for its new branded version, Elcys, in 2019. Its wholesale price is $8.24 per milliliter, compared with $0.24 per milliliter for the previous generic product.

“That company did a lot of work to bring a new and improved formulation to market,” said Soumi Saha, vice president of advocacy for Premier, which does group purchasing for health care providers. “That’s different than taking the same recipe, slapping a different label on it and seeking market exclusivity.”

This isn’t just an abstract policy issue. The higher prices resulting from the branding of cheap old drugs can significantly affect patient care.

Colchicine’s higher price prompted Dr. Marcus Snow, a rheumatologist in Omaha, to switch some of his gout patients to more affordable anti-inflammatory drugs. But those drugs can elevate blood sugar and affect kidney function, so he has to be vigilant.

The drug’s price also could become a bigger issue as its use expands. Recent studies have shown that colchicine is effective in preventing complications after heart attacks, and that it may be effective in reducing heart problems in covid patients. If demand soars for these new uses, Par and other colchicine distributors might seek further price hikes for this ancient drug.

“I would love to see colchicine drop to the old days of pennies per pill through generic availability,” said Snow, who heads the American College of Rheumatology’s Committee on Rheumatic Care. “But I’m not expecting that.”

KHN (Kaiser Health News) is a national newsroom that produces in-depth journalism about health issues. Together with Policy Analysis and Polling, KHN is one of the three major operating programs at KFF (Kaiser Family Foundation). KFF is an endowed nonprofit organization providing information on health issues to the nation.

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