Trump’s nominee to lead FDA could make drug prices low again
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President Trump is neither a fan of regulation nor high drug prices. So it is no surprise that his nominee to head the Food and Drug Administration, Scott Gottlieb, is a candidate sent straight from central casting.

Gottlieb, who is himself a doctor, American Enterprise Institute scholar, and former deputy commissioner of the FDA under President George W. Bush, has long been on record as a critic of the FDA’s overly risk-averse approach to approving new drugs and generic forms of existing ones. His paper trail is speckled with attacks on bizarre legal and regulatory hurdles that senselessly damage both consumers and manufacturers. These hoops have increased the cost of getting a new drug from $400 million to over $2 billion, according to researchers at Tufts University.

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Gottlieb says all the right things about how the FDA can help lower drug prices.

 

However, his track record of close affiliations with Big Pharma has led him to adopt some silly positions, in particular when it comes to drug importation. On an even sourer note, Gottlieb has been a critic of the 340B drug discount program. Here his longstanding allegiance to the drug industry is most glaring. Big Pharma hates this tiny program because it requires manufacturers who want to sell drugs to the Medicaid and Medicare Part B markets to give discounts to providers that serve vulnerable populations. Some argue these discounts drive price increases for everyone else.

But the numbers don’t add up. The government estimates that providers save $6 billion per year through the program. That’s just 1.3 percent of the $457 billion total US drug market – and hardly enough to cause distortions.

Still, there is plenty of reason to believe that Gottlieb could serve as a friendly face for a populist policy on drugs that cracks down both on senseless regulation and runaway pharma profiteering, which comes at the expense of taxpayers and competitors.

Gottllieb has an opportunity to play a big role in the arrival of new generics. This is also an area where Congress is active, specifically through a bill called the CREATES Act. The measure permits generic drug makers to utilize a limited legal process to sue brand-name manufacturers to hand over samples of their off-patent drugs when the generics believe those companies are engaging in anticompetitive behavior.

But first the generic manufacturer has to get FDA approval for its proposed procedure to develop generic drugs, so as to prevent valuable formulae from falling into the hands of snake oil salesmen. Pharma has tried its best to attack the bill by claiming (in defiance of logic and its text) that such salesmen might still get access to their formulae, FDA be damned.

It is possible to imagine a scenario where a particularly negligent FDA head would allow such a thing to happen. But Scott Gottlieb is the last person who fits the bill. After all, surely pharma doesn’t think a friendly FDA commissioner like him will give away their formulae to just anyone.

In addition, Gottlieb permits breathing room for those seeking to reform the patent system. In the crusade to get rid of commonsense patent quality measures that stop the industry from continually renewing their patents ad infinitum, Big Pharma often cites the cost of research and development. Never mind that none of its patents have ever been stripped or invalidated within the first ten years. This is another area where Gottlieb’s regulatory light touch could call the industry’s bluff, since his approach would obviously reduce the hated R&D costs that the industry trots out to defend itself.

Gottlieb on his own may not have the power or inclination to take every measure to lower drug costs as FDA chief. But his record suggests he would not only lower those costs directly where possible, but make it easier for proponents of all other cost-cutting measures to get their way as well.

Mytheos Holt (@MytheosHolt) is a senior fellow at the Institute for Liberty. He previously worked as a speechwriter for Sen. John Barrasso (R-Wyo.), and as a writer for publications including The Federalist.


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