Posts Tagged ‘pharmaceuticals’

Feds overreach in prosecution of FedEx for failure to snoop

“Federal prosecutors have accused FedEx of knowingly shipping illegal drugs in interstate commerce and laundering money by merely doing its job: delivering packages (in this case, from online Internet pharmacies) to their intended recipients and getting paid for the service. …To avoid the very sort of ‘gotcha’ prosecution at issue here, Congress inserted exceptions for common carriers in each of the relevant statutes” authorizing shipment of prescription medications and controlled substances when done in the usual course of business.

While courts have generated no case law authoritatively interpreting these exemptions in the Controlled Substances Act (CSA) and the Food, Drug, & Cosmetic Act (FDCA), “the need to do so had never presented itself because no prosecutor had ever dared to bring such a dubious indictment in the previous 45 years of the CSA’s existence.” [Cory Andrews, Washington Legal Foundation; earlier (“Feds indict FedEx for not snooping into packages”)]

“New Hedge Fund Strategy: Dispute the Patent, Short the Stock”

Like a sports team getting to bet on its own game? “A well-known hedge-fund manager is taking a novel approach to making money: filing and publicizing patent challenges against pharmaceutical companies while also betting against their shares.” [WSJ; ten years ago on selling short, then suing] More: Bainbridge on an academic paper analyzing the effects when a litigant holds long or short positions in its opponent.

Medical roundup

Medical roundup

  • “No, Donating Your Leftover Tissue To Research Is Not Like Letting Someone Rifle Through Your Phone” [Michelle Meyer answers “Henrietta Lacks” author Rebecca Skloot; related, Richard Epstein/Hoover]
  • “Women Should Not Have to Visit a Doctor for Birth Control” [Jeffrey Singer, Time/Cato]
  • Lawyer ads can scare TV viewers into discontinuing medically indicated therapies. But is more regulation the right answer? [reform group Sick of Lawsuits]
  • Johnson & Johnson followed federal government’s own advice on labeling a drug, and got slammed by a jury in consequence [WSJ editorial]
  • U.S. opinion resistant to ratifying treaties that would create an international-law right to health care, so how about smuggling it in via congressional/executive agreement? [Nicholas Diamond, Harvard “Bill of Health”]
  • Denmark, like other Scandinavian countries and New Zealand, has replaced malpractice suits with iatrogenic injury compensation scheme [Pro Publica]
  • Has liberalized patient access to opioids been a net harm? Study suggests no [Tyler Cowen]

“The biggest obstacle to proper treatment, in Dr. DeVita’s view, is the FDA.”

Longtime director of the National Cancer Institute Vincent DeVita has a new book out (with daughter Elizabeth DeVita-Raeburn) on the fight against cancer. (DeVita is also a former director of the Yale Cancer Center, and a former physician in chief at Memorial Sloan-Kettering Cancer Center). From a New York Times review, via Ira Stoll, Future of Capitalism:

The regulatory caution of the Food and Drug Administration has been a thorn in his side for decades: “I’d like to be able to say that as cancer drugs have become increasingly more complex and sophisticated, the F.D.A. has as well. But it has not.” In fact, he writes, “the rate-limiting step in eradicating cancer today is not the science but the regulatory environment we work in.”

And Laura Landro covers the book at the Wall Street Journal:

The biggest obstacle to proper treatment, in Dr. DeVita’s view, is the FDA. The agency, he believes, acts with an overabundance of caution, approving a drug for one cancer but restricting its use for another. It has created a lot of “Dr. No’s,” who are “prone to saying no to cancer drugs.”…

Dr. DeVita calls on regulators to allow testing at earlier stages of a disease rather than only after current treatments have failed, and he argues that more drugs should be available, before approval, for “compassionate” use in the absence of other treatments. “People are not dying because the drugs don’t exist,” he writes, “but because they can’t get them.”

Medical roundup

  • Surprised this story of interstate lawsuit exposure hasn’t had national coverage: “Texas docs threaten to stop seeing New Mexico patients” [Hobbs, N.M., News]
  • More on the Daraprim episode and the fiasco of FDA generic-drug regulation [Watchdog, earlier here and here] More: Ira Stoll/N.Y. Sun;
  • Warrants, HIPAA be damned: Drug Enforcement Administration agents pose as Texas medical board to get at patient records [Jon Cassidy/Watchdog, Tim Cushing/TechDirt via Radley Balko]
  • Litigation finance and champerty: the reaction is under way [MathBabe, earlier on pelvic and transvaginal mesh surgery speculation]
  • No longer alas a surprise to see JAMA Pediatrics running lame, politicized content on topics like “youth gun carrying” [Jacob Sullum]
  • “Shame, blame, and defame”: in alcohol regulation as in other public health fields, government-funded research can look a lot like advocacy [Edward Peter Stringham, The Hill]
  • More adventures in public health: study finds dry counties in Kentucky have bigger problems with methamphetamine [Christopher Ingraham, Washington Post “WonkBlog”]

Bryan Caplan vs. “Scott Alexander” on labor economics

A rejoinder worth reading on labor markets by George Mason economist Bryan Caplan to the pseudonymous “Scott Alexander,” who writes the popular Slate Star Codex blog [Caplan first, second, third posts, all responding to this critique-of-libertarianism FAQ] If you don’t read Alexander, some of his top posts are here (especially strong on questions of medicine/health care and the way social justice language has developed into a tool of power). Also check out his recent post on the Daraprim mess and the wider failure of generic drug regulation [earlier on which].

Yes, that $750 generic pill is a pure artifact of regulation

As you probably know if you follow the news, a man named Martin Shkreli in charge of a startup firm called Turing Pharmaceuticals bought the rights to a drug called pyrimethamine (brand name Daraprim), used in the treatment of AIDS and malaria, and announced that he was jacking up its price from $13.60 to $750. Massive outrage resulted, which has echoed through social media for the past week.

Pyrimethamine is long since off patent. It is not difficult to manufacture, and sells cheaply in Europe. But under the distinctive food and drug laws of the United States you can’t just start turning out pills in your factory to compete with Shkreli, at least not without compiling and submitting a huge pile of regulatory paper with the U.S. Food and Drug Administration. This calls on the services of lawyers and scientists, costs a lot of money, and takes time, and you might or might not be able to recover the costs from the relatively small pool of users.

Alex Tabarrok and commenters explain, and pharmaceutical blogger Derek Lowe has much more detail in a series of posts:

The FDA grants market exclusivity to companies that are willing to take “grandfathered” compounds into compliance with their current regulatory framework, and that’s led to some ridiculous situations with drugs like colchicine and progesterone. (Perhaps the worst example is a company that’s using this technique to get ahold of a drug that’s currently being provided at no charge whatsoever).

Among laws that used the “marketing exclusivity” technique to award monopolies on older drugs, on the logic that otherwise no one would step forward to handle the heavy costs of getting those drugs regulatory clearance, were the Drug Price Competition and Patent Term Restoration Act of 1984, better known as the Hatch-Waxman Act, originally introduced by Sen. Charles Mathias (R-Md.), and the Orphan Drug Act of 1983, introduced by Rep. Henry Waxman (D-Calif.) (We covered the issue briefly in this 2011 post.) In various ways that backers appear not to have foreseen, opportunistic actors have succeeded in seizing the legal-monopoly status made available for various compounds without always providing as much public benefit in return as had been expected. To enforce their legal monopoly, some of these companies sue rival drugmakers to force them to pull their competing offerings off the market.

Underlying it all — but seldom asked — was whether the gigantic costs of regulatory approval are really a necessary evil. Libertarian-minded critics were especially inclined to question whether hugely expensive studies and paperwork should really be required in the case of grandfathered or “generally recognized as safe” drugs, many of which have been familiar to the medical profession for decades or even centuries, allowing for a collective sense to emerge of their safety and effectiveness. But the view that progressives tended to champion — which prevailed — was that older compounds and those used for rare diseases should be held to no less stringent a standard than any other, and should either be withdrawn from the market or have their safety and effectiveness proved at someone’s expense.

At the Niskanen Center, Will Wilkinson ties together several of these themes. “Martin Shkreli… bought himself a monopoly made entirely of health-and-safety red tape,” he notes. The most-hated businessperson of the year is “cashing in precisely because the American pharmaceutical market is so far from free.”

Meanwhile, today’s moralistic politicians denounce the resulting fiasco without acknowledging the role of yesterday’s moralistic politicians in helping to bring it about (cross-posted in adapted form at Cato at Liberty).

More: “if another company wanted to compete to sell the same medicine [Daraprim], it would need to apply for a new generic drug approval, by submitting an ‘Abbreviated New Drug Application’ to the FDA. Filing one of these applications with the FDA used to cost as little as $1 million; today it can run as high as $20 million, sometimes more. …On average, it takes about 50 months for the FDA to approve a single generic application.” [Scott Gottlieb, WSJ] To clarify what I should have spelled out above: while exclusivity grants under the 1983 and 1984 laws have been associated with price jumps for a range of older drugs, the ANDA obstacle to entry by itself accounts for Shkreli’s monopoly position, which he cleverly amplified by sharp practices described by Ronald Bailey: “First, he apparently talked Impax [a predecessor holder of the sole FDA rights to market Daraprim] into starving the wholesale market of the drug, so that when Turing completed its purchase of the rights there were no extra pills floating around. Next, he set up an exclusive distribution network as a way of preventing potential competitors from obtaining enough Daraprim to conduct [the equivalence] trials for the FDA” necessary to develop an ANDA so as eventually to challenge his regulatory monopoly. And Scott Alexander at Slate Star Codex adds the Daraprim episode to a list of calamitous failures of generic drug regulation.

Eric Schneiderman’s herbal-supplements adventure

“Never apologize, never explain” is not a maxim to recommend for a state’s top law enforcer, and that goes for New York’s Attorney General Eric Schneiderman, the subject of my recent City Journal piece. Early this year Schneiderman charged that herbal supplements on sale at GNC, Walmart and other major retailers, when subjected to special tests arranged by his office, were found to lack DNA associated with the advertised herbs. Within days close observers and experts in the field had deduced why Schneiderman’s tests had produced such remarkable results: he had relied on testing methods badly unsuited to identifying active ingredients in substances that, like most of the supplements, had undergone extensive processing [see, e.g., Nicola Twilley, New Yorker; Live Science; Bill Hammond, New York Daily News]

Other officials might have beat a timely retreat. Schneiderman’s office instead dug in, refusing to apologize, back down or even publicly disclose key facts about its testing methods. I’ve done a Cato Daily Podcast with Caleb Brown about the whole episode, including what is perhaps the most ominous aspect: such is the legal leverage of a New York attorney general that the targets chose to settle anyway. City Journal piece, again, here.