Another Example Of The FDA Driving Up Drug Prices

Posted by Jason | Posted in Economics, Health Care | Posted on 23-10-2010


While everyone complains about the rising cost of health care, most Americans look to the government for the solution. It’s sort of like asking your dealer to help you kick your drug habit. All one needs to do is look at the daily examples where the government steps in and distorts the free market. This intervention is what drives up prices, and here is one of the millions of examples of how the government does this.

ViroPharma Inc. said U.S. drug regulators declined to approve an expansion of the company’s manufacturing of the drug Cinryze, which treats a hereditary disease, as the agency asked for more information.

Cinryze was approved by the Food and Drug Administration in 2008 to treat hereditary angioedema, or HAE, a rare genetic disease involving potentially deadly swelling of various parts of the body.

ViroPharma, of Exton, Pa., has sought to more than double the supply of Cinryze. Earlier this year, the company applied for FDA clearance to commercialize Cinryze manufactured using a certain industrial-scale process that’s different from the current process.

ViroPharma had expected to receive FDA approval of the industrial-scale product by the end of this year, helping sales beginning in 2011.

But the company disclosed Friday that the FDA sent a so-called complete response letter, requesting additional details about the technical process and ViroPharma responses to “quality observations” from an FDA inspection.

“The questions raised in this complete response letter are answerable in a timely manner,” ViroPharma Chief Executive Vincent Milano said on a conference call with analysts. ViroPharma plans to schedule a meeting with FDA officials as soon as possible, but Mr. Milano said it was too soon to provide a more specific timeline for next steps.

Mr. Milano said ViroPharma would proceed with plans to begin manufacturing industrial-scale lots “at risk” in the first quarter of 2011, with the hope inventory will be ready for shipment soon after FDA approval.

ViroPharma’s currently approved manufacturing process alone yields up to 60,000 doses of Cinryze annually. The industrial-scale process would add another 100,000 doses.

Cinryze generated sales of about $75 million for the first half of 2010, or about 38% of total company revenue.

via FDA Rejects Expansion Of ViroPharma Drug –

I would sure hate to be inflicted with this disease, because you just got screwed by the government. The company, in pursuit of more profits, wanted to more than double the supply. In case there are any bureaucrats on here, let’s revisit our trusty Supply and Demand curves again. What happens when supply is increased without the demand curve changing? Prices go down. So with this government action alone, prices will not be driven down, which is what would have been the result of the company’s actions.

No, instead our benevolent dictators decided those inflicted do not need the extra doses at a lower cost. I’m sure they think they have their reasons. After all, this red tape is there to protect us (or strangle us). So, now not only does this extra supply not make it to the market, but ViroPharma has had to have the extra cost of paying off the mafia in hopes of doing business. Sorry, I meant the government, not the mafia. Do you think they are going to just eat that extra cost? Of course not. It’s going to be passed on to the consumer.

This example doesn’t even take into account the original FDA process that drug manufacturers have to go through to bring their drugs to market. If we had no FDA, that supply curve would shift dramatically, lowering prices.

On top of that, who knows how many people are going to die now that the extra supply won’t make it to the market. Oh well. The government has to get its cut. If someone’s got to die, then someone’s got to die.

VN:F [1.9.21_1169]
Rating: 0.0/10 (0 votes cast)

Your Garden Is A Problem For The System

Posted by Jason | Posted in Miscellaneous | Posted on 27-04-2010


If you think you can always grow your own food when food prices sky rocket with inflation, think again. Government is already making sure you cannot get outside the system. Government must always make sure you are trapped within the system.  This is very similar to Obama going after people who move their money overseas to avoid our oppressive tax system. Instead of realizing that our tax system is driving money out of the country, our government attacks the people who have the money. The government never realizes it’s the problem, but why would it when it’s a coercive monopoly.

With the Fed holding interest rates extremely low by printing money, there is going to be inflation. I know personally my grocery budget has doubled in the past decade, and we are not consuming any more food. In order to save money, more and more people are planting gardens, but this takes away government’s power and the big farming industries’ profits. How is government going to keep Monsanto’s bribes coming if it cannot deliver? Your garden is becoming a problem for them, so it’s time for them to pull out the guns and tell you to stop. Oh I know, the government isn’t going to shoot you for your garden, but they are going to fine you over and over until you submit. If you don’t submit and pay your fines, they will imprison you.


VN:F [1.9.21_1169]
Rating: 0.0/10 (0 votes cast)

We Already Have Death Panels

Posted by Jason | Posted in Health Care | Posted on 29-03-2010


Democrats were jumping ugly when Sarah Palin said under ObamaCare we would have death panels. What she didn’t mention is that we already have death panels. Every year people die while the FDA forces companies to funnel money into their coffers, so they can “protect” us.

But what if we don’t want protected? Shouldn’t we have a choice?

Last month, Stossel had a special on how the FDA’s claims of being our protectors. He highlighted that when the FDA states that a new drug that they just approved will save X number of lives per year, what they are really saying is their 10 to 15 year drug approval period costs X number of lives every year while they held up the drug for approval.

The incentives at the FDA are to drag out drug approvals despite the lives it costs. There is no public uproar for those who die waiting. There is only uproar for those who take a drug that has been approved and results in side effects. With this upside down incentive, the FDA more than likely costs more lives than it would other wise cost if drugs were not regulated at all.

“Well, that’s just the system.”, you say. “You can’t really call that a death panel.”

But what if you were dying, and you wanted to take a drug that has shown promise? What if the only way to get the drug was to beg your government to allow you to have it? Well that is the reality many people face. Because the FDA has a monopoly on approving drugs, those who are the most ill among us must beg for the chance to save their own lives. What do side effects matter when you are going to die anyway? At least with an experimental drug, you might have a chance. Without it, the result is already known. Why does the government decide you should not have that opportunity? Who gave them the wisdom to decide someone must die?

The reason they cannot let people have untested drugs is because people would quickly catch onto their game. Soon people would challenge the idea of the FDA altogether, and to prevent that, they must let people die, people like Anna Tomalis, a 13 year old girl who fought to the very end to make sure others would have the opportunity she was denied.

Here is a blog post about Anna Tomalis followed by Stossel’s show where he talks about her.

Last Friday, I attended the funeral of a remarkable 13-year-old girl named Anna Tomalis. For the past three years, Anna had been battling terminal cancer and, more recently, trying to get the Food and Drug Administration to grant a “compassionate use” exemption so she could try an experimental cancer drug now being jointly developed by the pharmaceutical companies ARIAD and Merck. Unfortunately, FDA rarely grants exemptions. If too many exemptions are granted, it would become harder to enroll patients in clinical trials, where they have as much as a 50-50 chance of getting a placebo. Anna was too young and too sick to be admitted to any of the clinical trials, so that wasn’t at issue here. But, of course, the whole point of FDA is to keep individuals from making their own decisions about which drugs to take. So, eventually, after months of delay, FDA finally approved Anna’s exemption, but it came too late. She died just three weeks after beginning treatment — too little time for the drug to have worked.

I got to meet Anna and her mother Liz a few months ago, through a patient advocacy organization called the Abigail Alliance For Better Access To Developmental Drugs, with which CEI works occasionally. And, I continued to correspond with them both by e-mail ever since. Though I certainly did not know Anna very well, the service was quite moving. Her father, Ron, for example, explained that Anna realized all along that her chances of survival weren’t good. But, keeping a good attitude about the whole thing, Anna insisted that she be buried in a hot pink casket. Since no one actually makes a hot pink casket, her parents had to buy a non-descript one and take it to an auto body shop to have it painted pink.

Anna also tried to use her impending death in order to promote a change in the law that would make it easier for critically ill patients to get compassionate use exemptions. Even though she realized she wouldn’t last long enough to benefit personally from such a change, she visited Washington several times in order to advocate for such a policy. My op-ed on the subject appeared in this past weekend edition of The Wall Street Journal, and can be read here.

via Anna Tomalis, R.I.P. |

Some “Compassionate use” exemption. Why should free people have to ask their government for an exemption? Shouldn’t we decide if we want to take a risk, when we already know what’s going to happen without doing anything? There is no compassion in government. Anytime, you see something titled like this, you can guess the exact opposite is true. There is nothing compassionate about a cold bureaucrat who wields the power of the state. They will let nothing, even a little girl, challenge their position to wield that power.

VN:F [1.9.21_1169]
Rating: 5.5/10 (2 votes cast)

FDA Highlights It’s A Road Block To Drug Development

Posted by Jason | Posted in Government, Health Care | Posted on 10-03-2010


If you’ve been following my blog, you already know I am no fan of the FDA. This bureaucracy costs drug developers so much time and money that many drugs that could save lives are never invested in and developed. I’ve talked about that here and here. This morning, the Wall Street Journal has an article about FDA staffers “helping” companies move their orphaned drugs through the process by holding workshops. The underlying story, if you read between the lines, is many drugs never make it to the market because the FDA is a road barrier that is not worth overcoming for rare diseases. The end result is people with rare diseases die or have to live with their disease with a lot less hope that a drug will be developed, all thanks to your all caring government.

Staff members at the Food and Drug Administration are doing something unusual. They are leaving Washington to help drug makers take a crucial step in developing drugs for rare diseases.

Only a statist would consider it a crucial step in the development of a drug to fill out government paperwork.

The staffers help administer the Orphan Drug Act, which provides incentives to create therapies for so-called orphan diseases—those that affect fewer than 200,000 Americans. There are about 7,000 such maladies, most of them serious, that have few or no drugs to treat them, from adenoid cystic carcinoma, a rare head and neck cancer, to Zollinger-Ellison syndrome, which is associated with a tumor that causes the production of high levels of stomach acid.

As a result, doctors may end up prescribing drugs developed for other diseases off-label, but not all insurers will cover this kind of use.

Getting an orphan-drug designation opens the door to incentives once the FDA approves a medicine for sale in the U.S., including seven years’ marketing exclusivity and tax breaks. Last year, just 250 requests for orphan-drug designation were filed, and 160 received it.

“We’re barely scratching the surface,” says Timothy Coté, director of the FDA’s Office of Orphan Products Development, the workshop’s sponsor. He says there are roughly 350 orphan drugs approved, covering about 150 rare diseases.

Tim Cunniff, vice president of global regulatory affairs at Lundbeck Inc., which has a number of approved orphan drugs, says most companies developing orphan drugs are small.

As I’ve stated previously, the big companies love the FDA. It’s a barrier to small companies from developing drugs to bring to market, which means less competition for Big Pharma. Small companies would develop drugs for rare diseases, because they see the whole in the market. The problem for them though is trying to find $1 billion dollars and up to 15 years time to move the drug through the FDA. This is a huge barrier to entry, and it leaves people with these rare diseases to suffer.

Big companies are starting to get more interested in rare diseases, but the key issue is the high cost of developing a drug and the typically long time it takes to move it from a lab into a clinic as a treatment that gets prescribed. Before starting down this arduous path, a company needs to feel there is a reasonable chance of making a profit.

Bing-O. Here is the proof that the FDA is a hindrance to progress. Companies have to make predictions about an extremely expensive and time consuming process, that can be swayed by politics. As we all know, everything has opportunity costs. If they decide to move forward on one drug, the money and time spent moving it through the FDA process is money and time that are not spent developing the next drug. Because of this alone, we are losing out on more drugs, but we are also making it much harder for companies to decide in favor of moving forward with a drug. It’s probably almost never going to happen for drugs for rare diseases, because the market is so small.

To help get more applications, Dr. Coté’s office put out the word: Help is available, in two workshops with on-the-spot regulatory advice. The first workshop, held last month at the Keck Graduate Institute here, drew 29 potential sponsors, from major drug companies to academic centers, small biotechs and even some patient advocates. In a follow-up survey, 74% said they had never before filed an application for orphan drug designation.

Dr. Coté said he wanted participants to understand that the workshop wasn’t providing an alternative pathway to orphan-drug designation, just regulatory advice. He said it was very important that the FDA avoid the “perception of favoritism” and even stressed that in the cover letter to an application, the sponsors shouldn’t say they had been at the workshop.

Sure wouldn’t want the “perception of favoritism”. Don’t make it easier for companies to develop drugs for rare diseases, that otherwise won’t be developed. That would be just horrible.

Barbara Fant, president and chief executive of Clinical Research Consultants Inc., attended the workshop to prepare an application for a drug-company client, and said this was her first time filing for an orphan drug designation.

An FDA staffer pointed out issues in her application that “would have come back to me as questions and delayed the designation process” if she had filed before the workshop. “I learned some nuances that I didn’t know,” said Dr. Fant, who declined to provide details about her client or the drug.

Who says you don’t have to be a rocket scientist to fill out government papers correctly. I guess being a doctor just isn’t enough. If this lady was not at this workshop, should would have probably just lost months of time before this paper went into the FDA bureaucracy and got turned down and returned, because it was missing some “nuance”.

An orphan-drug designation is no guarantee a medicine will ultimately be approved for marketing. A different FDA division reviews safety and efficacy data for approval. Upon further testing, a drug may turn out to be too dangerous or not effective. Companies may decide a product is too expensive to make, change direction, or go out of business. But Dr. Phillips and Dr. Coté hope that by increasing the pool of applicants for designation, they will increase the chances of getting more approvals.

via FDA Pushes for Cures for Rare Diseases –

Did you get the underlying message of this article? Do you need more proof that the government, in this case the FDA, is a road barrier to progress? There really is no need for the FDA. There could easily be a private mechanism for testing drugs. All it would take a is change to patent laws, which have to give Big Pharma complete control of the market for a long time in order for them to make enough profit to make it worth bringing a drug to market. Because of the huge expense of the FDA, that control of the market has to be longer than it otherwise would need to be.

Also, as John pointed out in the comments section on this post, why couldn’t the FDA be optional? Why can’t we as consumers have a choice between an expensive FDA approved drug and a cheaper non-FDA approved drug? Surely, the non-FDA approved drug will go through the rigors of private testing via competitors, doctors and universities. We know the answer to that though. Government can never have something that challenges it’s claim to be our protector. If we allowed non-FDA options, the FDA would shortly be proven useless.

VN:F [1.9.21_1169]
Rating: 1.0/10 (1 vote cast)

The FDA Will Save You From …. Cheerios?

Posted by Jason | Posted in Government, Health Care | Posted on 02-03-2010


Some drug company must not like Cheerios eating into their cholesterol drug sales. The FDA better get involved.

Last year the Food and Drug Administration made itself fodder for late-night comedy when it warned the manufacturer of Cheerios against boasting about some of the cereal’s health benefits. “We have determined [Cheerios] is promoted for conditions that cause it to be a drug,” the FDA said in a letter to General Mills.

By this logic, consumers would need a prescription to buy a box of the oats.

The letter typifies the FDA’s longstanding discomfort with health claims made on food labels, particularly those touting the medical benefits of certain diets and ingredients.

via Scott Gottlieb: The FDA Takes on Cheerios –

This is a perfect example of how we have all been brainwashed. Everyone just assumes that the FDA really has a clue what they are doing and that they really our there to protect us.

Would it be surprising to see Big Pharma using the FDA to go after companies that might eat into their drug sales? Who wouldn’t love eating Cheerios instead of taking cholesterol medicine?

Also, why don’t people ask how many people die as a result of the FDA’s involvement in drug testing. It takes almost $1 billion and up to 15 years for a drug to make it through the obstacle course laid out by the FDA. No wonder drugs are so expensive. So, how many people die because of the time lag of getting a drug to market? Also, how many drugs that could save peoples lives just can’t make enough profit to justify running it through this expensive, time consuming process?

Has anyone thought maybe the FDA and this expensive process was put into place to protect Big Pharma from small competitors? Like most government regulations, only the huge corporations can afford to play the game, so they love all the regulations. It prevents the up and comers from ever nipping at their toes.

Quit assuming the government is their to protect you. The FDA is not about protection. It is about control. As long as the government controls this part of society by deciding who can play, they maintain the power. They pick the winners and losers, and they are the ones who need bribed, elected, and need to remain in power.

VN:F [1.9.21_1169]
Rating: 0.0/10 (0 votes cast)

Take Profits Out Of Health Care? Profits Save Lives!

Posted by Jason | Posted in Economics, Government, Health Care | Posted on 18-12-2009


Last night I’m watching John Stossel’s new show on Fox Business. His topic was health care. As usual, Stossel was right on blaming health insurance (third party payer) for the rising prices. Of course, the socialists in the audience and in some of the on the street interviews were having none of it. What was to blame? PROFITS! These idiots think that profits drive up the costs. I even debated a socialist on Facebook who said under socialism goods and services would be the cheapest they can be, because there would be no profit. By definition, he thinks removing profit lowers price. His exact words were, “Profit wouldn’t even be considered in a socialist state, so drugs would automatically be at their lowest possible price.”

It’s silly to think that removing profit makes things cheaper. Price is a function of supply and demand, not profit. Socialism always generates more demand while dwindling supply, so there is no reason to think that not having profits would lower price. That is a simple economic fact. The other hazard of removing profit though is lack of innovation. This is where removing profit is deadly.

The biggest profits are generated with the introduction of a new innovation. The innovator has first dibs on the market. They can charge the most to recoup their investment costs. After investment costs are recouped, they generate tons of profit. I know that sounds horrible in the eyes of many socialists, but what happens next is competitors see the huge profits. They then rush in to capture some of the profits for themselves. By jumping on the profit bandwagon, they bring the goods and services to more people. How do they differentiate themselves in order to get a piece of the profits? They either innovate, making the product or service even better, they seek efficiencies, which lowers costs, or they undercut their competitors, seeking less profits in hopes of taking some of the market. This whole process drives down the cost through innovation, efficiencies, and out right price wars.

This competition always drives profit margins down. Anyone who gets in on the early stage of a new technology can tell you “enjoy it while it lasts.” Once the profit margins are driven down so far, you end up with the companies who can deliver the products or services with the best quality and efficiency.

Meanwhile, the innovators are back at it seeking the massive profits that come from new products and services. This is what leads to our ever improving livelihood.

So what does this mean for health care? If we remove the boot of the government, we can have this same process in health care. It does happen inspite of the government now, but there is no doubt that it is hampered and slowed. For instance, moving a drug through the FDA is estimated to cost close to $1 billion dollars and takes 15 years. How many drugs are there that are needed, but can’t produce the profits necessary to overcome the costs imposed by the FDA? How many people die without those drugs?

If you remove profits, you remove innovation. If you remove innovation, people die. New drugs, treatments and cures are not developed.  If you remove profit, you remove competition. It’s competition that brings products and services at ever cheaper prices to the masses. If people can’t get the products and services, people die. While all these socialists scream, “No profits in health care!”, they should be screaming “Let people die, let people die!”

Watch Stossel’s Health Care show here:

VN:F [1.9.21_1169]
Rating: 0.0/10 (0 votes cast)