FDA behind price hike for drugs found cheaper overseas

April 4, 2011 4:42:43 PM PDT
When the FDA approves a drug, it oversees production and monitors side effects. Recently, it's been reviewing old, cheap drugs and giving exclusive production rights to one company. It's done for safety, but the result has been some price hikes. So why are they are more expensive here, even though they can be cheaper overseas?

The progesterone shot for pregnant women that went from $20 to $1,500 a dose caught a lot of people by surprise. And it's not the first time that a drug that was around for years skyrocketed in price.

Colchicine, like progesterone ,had been around for decades. The drug for gouty arthritis climbed to $4.85 a pill from 9 cents a pill, according to the New England Journal of Medicine.

Both are old drugs, that the FDA reviewed and then gave the sole rights to make it to one company.

"We give the pharmaceutical companies a monopoly but we do not interfere with what they charge," said Dr. Pauline Rosenau, a professor at the UT School of Public Health.

Rosenau says European countries and Canada balance the monopoly of the patent protection with either price regulation or price negotiation.

"Throughout Europe you have different strategies but in the end, medication costs are much lower than ours, because here we say leave it to the market mechanism, but the market doesn't work when a company has a monopoly," Dr. Rosenau said.

The FDA says it does this for safety. In a statement last year on the Colchicine controversy, the FDA's Janet Woodcock said the FDA has been reviewing old drugs since 2006 and "addressing risks from unapproved drugs is a high priority for the FDA and the agency plans to systematically and responsibly ensure that all products on the U.S. prescription drug market become compliant with current FDA approval requirements."

In the past week, there has been a price drop in the progesterone shot because of public pressure and the FDA's decision to allow local pharmacies to continue making the shot. The price dropped from $1,500 to $690 a shot.

Drug makers say it costs money to do safety tests on old drugs in common use today and then manufacture them to FDA standards. Some experts say if aspirin were to have to go through today's FDA testing process, it would probably end up being a prescription drug because it has side effects. And it would cost much more.

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