Is the FDA Digging Its Own Hole on Drug Pricing and Opioids?

The Food and Drug Administration may be digging a huge hole for itself by singling out drug pricing and opioid abuse for priority and focused attention. These two highly-visible and highly-charged issues have been pushed into the political arena. The FDA has, unwisely, agreed to take them on.

Both issues are mission impossible for the FDA, which has neither the authority nor the resources to solve either problem. The agency is setting itself up to be perceived as having failed.   

The price of drugs and the opioid crisis are two of the most highly-visible and challenging issues that face the world of medicine and health care. Concern about drug prices was one of the few issues that candidates Donald Trump and Hillary Clinton agreed on during the campaign, and President Trump has mentioned drug pricing several times in many different contexts. The opioid crisis/epidemic has been front-page news for years and will remain so — opioid abuse and addiction are killing Americans, and every major medical leader has spoken out about the challenge.

Scott Gottlieb, the new FDA commissioner, has just pushed these two issues to the top of FDA’s agenda. In his initial speech to FDA staff, which largely covered broad challenges and goals, Gottlieb singled out drug pricing and opioids for special attention. He said at an “all-hands” meeting on May 15, just four days after being sworn in:

“For one thing, too many consumers are priced out of the medicines they need. Now, I know FDA doesn’t play a direct role in drug pricing. But we still need to be taking meaningful steps to get more low cost alternatives to the market, to increase competition, and to give consumers more options. This is especially true when it comes to complex drugs and biosimilars. …

“But unquestionably, our greatest immediate challenge is the problem of opioid abuse. This is a public health crisis of staggering human and economic proportion. The epidemic of opioid addiction is not a problem that FDA can solve alone. But we have an important role to play in reducing the rate of new abuse, and in giving health care providers the tools to reduce exposure to opioids to only clearly appropriate patients, so we can also help reduce the new cases of addiction. Addressing this tragedy is going to be one of my highest initial priorities.

“Now, I know FDA has already taken many important steps to address the opioid crisis. But the epidemic has continued to grow. I’ll be working with FDA’s senior career leadership and in the coming weeks hope to have more to say on how we take even more forceful steps to address this crisis.”

 The reality is that drug pricing and opioid abuse are issues that the FDA has very limited ability to control, as Gottlieb conceded.

The FDA does not set or even directly influence the price of drugs. Prices are set by drug companies and influenced by health insurers and pharmacy benefit managers.

The FDA can approve new generic versions and biosimilars of expensive drugs, which encourages competition and leads to reduced drug prices. But the FDA can approve generics and biosimilars only when the patents on the original drugs expire. The most expensive drugs today generally have patent protection that enables their manufacturers to maintain exclusivity and to set their own prices — and the FDA can do nothing about that. As new drugs come on the market, they tend to be highly priced and without competition. Again, the FDA can do little about that, other than to delay the approval of new drugs or seek to limit their use through restrictive labeling. In short, the influence that the FDA can have over drug prices is limited and indirect.

With regard to opioids, the FDA does approve these drugs and can encourage the development of products that are less addictive and have less abuse potential. But opioids have valuable medical uses in treating pain and are on the market to stay. The FDA can require, as it has, extensive educational efforts for health care professionals and can seek to restrict the distribution channels of opioid drugs. But the opioid solution requires fundamental changes by individual physicians and individual patients. The FDA has very limited ability to change behavior on that scale short of removing the drugs from the market, which is medically infeasible. 

So to the extent that FDA is viewed as the “solution” to the high price of drugs and to the opioid epidemic, that observation is false. Gottlieb acknowledged in his speech to staff the FDA’s limited authority and influence, but by singling out these two problems as his own priorities, he has created what may be a no-win situation for himself and for FDA. Congress and senior administration officials will hold him and the agency accountable for solving problems of a complex dimension and over which the agency has extraordinarily limited powers.

Wayne Pines is president of health care at APCO Worldwide and a former associate commissioner of the FDA.

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