FDA Created Cancer Drug Shortage

What does Margaret Hamburg and the FDA have against cancer drugs? Maybe she can't wait for the Obamacare death panels and wants to speed the process along.

This FDA smackdown on generic drugs has led to a shortage of much needed cancer drugs.

The report, commissioned by Oversight Committee chairman Darrell Issa (R., Calif.), details the dramatic drop in the production of generic injectable drugs since Hamburg was confirmed as FDA chief in May 2009. Upon taking office, Hamburg promised an aggressive effort to enforce the FDA’s stringent manufacturing standards. In 2010, Hamburg’s officials issued 673 warning letters to drugmakers and other companies: a 42 percent increase from 2009. In 2011, the agency issued 1,720 warning letters: a further increase of 156 percent.

So what does Ms. Hamburg know about quality control that her predecessors did not?

Good question.

“According to sources with inside information about FDA’s operations, there is a disconnect between the FDA field force, the inspectors who work out of the agency’s district offices, and scientists and other career individuals at FDA headquarters who work on review and compliance functions,” Issa writes. “According to the Committee’s sources, FDA’s field force does not believe that it is within the scope of their authority to worry about the implications of their actions, even if it means a manufacturer closing a facility or removing manufacturing lines from production.”

Sort of a shoot first and ask questions later approach.

Wonder how cancer patients feel about this?

Ondansetron, a drug used to treat chemotherapy-induced nausea and vomiting, used to cost $3.71 per injection when it was on patent. Within one year after the drug’s patent expired, an injection cost 28 cents.

But injectable drugs require special manufacturing costs. “Injectable drugs often need to be lyophilized,” or freeze-dried, “which is extraordinarily expensive—the machine costs around $100 million,” says Mantha. “It’s a big capital expenditure.” On top of that, companies had to deal with the blizzard of new FDA enforcement actions

Why should the FDA care? It isn't their problem.

 in a normal market, whenever you have a shortage, manufacturers can raise prices, in order to restore their incentive to supply more product. But because of Medicare’s 6 percent cap on price increases, suppliers had no ability to raise prices to respond to doctor and patient demand.

Government interference in the market place created these shortages. The tag team of Medicare and FDA is squeezing the life out of low cost generic drugs.

the recently passed Prescription Drug User Fee Act legislation contains some language regarding drug shortages, but again the emphasis is on early warning of shortages, and speeding up FDA reviews, rather than on the real problems: excessive regulatory interference, and Medicare’s price controls.

As a former generic-drug CEO says below, “it seems somewhat ironic that the FDA is being empowered to cure a crisis they may have had a hand in creating.”

This is what happens when government officials try to regulate industries about which they have no idea how their actions impact end results.

As usual, Avik Roy's take on this topic is on target. Click here to read the full report as well as two addendum's.