In Defense of Free to Choose Medicine

The FDA monopoly on drug approval costs too much in time, money, and lives. There is a better way.

Introductory note from FEE President Lawrence W. Reed: On August 18, we published my article entitled “Herpes Cure Needs Free to Choose Medicine”  on FEE.org. It generated quite a stir, both pro and con, including a harsh response at ScienceBlogs. In my August 18 article, I quoted author and Free to Choose Medicine advocate Bartley J. Madden. Because the ScienceBlogs post specifically attacks Mr. Madden, we give him here an opportunity to respond.

A recent ScienceBlogs article, “Right To Choose Medicine: The free-market fundamentalist assault on the FDA continues,” is highly critical of the Free To Choose Medicine (FTCM) proposal and my thinking about FDA regulation in particular. The main conclusion is that I must not know anything about science or FDA clinical testing to propose a competitive alternative to the FDA process.

The sensible starting point is to focus on the goal of the drugs-to-patients system. All should be able to agree that the appropriate goal is better drugs, sooner, at lower cost. The FDA is failing to achieve this goal because it has an antiquated system that assumes that you and your doctor are not smart enough to access relevant data and make informed decisions about the use of not-yet-approved drugs, decisions attuned to your unique health conditions and preferences.

The FDA Is Far from Perfect

Since the 1960s, the FDA’s relentless demand for ever more expensive (both in time and money) clinical testing is the main cause of sky-high prescription drug prices. However, the more one understands the economics of achieving the goal of better drugs, sooner, at lower cost, the more appealing FTCM becomes. This would offer a competitive alternative (not a replacement) to the conventional FDA testing and approval process. The benefits of consumer choice and competition require an economic way of thinking that is totally missing from the ScienceBlogs criticisms. I’ll focus on just two benefits of FTCM that are readily apparent with an economic mindset plus an eye on advancing technology.

First, to reduce the cost of drugs, we need to lower FDA-imposed regulatory costs and simultaneously advance competition in the biopharmaceutical industry. The FTCM proposal is the only practical plan that strikes at the heart of ever-rising drug costs. In a recent speech, Dr. Scott Gottlieb, current FDA commissioner, shows a clear command of the economic issues. Dr. Gottlieb notes:

We’re on an unsustainable path, where the cost of drug development is growing enormously, as well as the costs of the new medicines. We need to do something now, to make the entire process less costly and more efficient. … When drugs succeed, they’re ultimately priced in a way that reflects a lot of factors, including their value to patients. But on some level, the prices also reflect some measure of the high development costs, and in particular, the cost of the capital that it took to develop them. …That cost of capital is affected the most by the risk of failure. As the risk of failure grows, entrepreneurs seek a higher potential return in order to support the initial investment. The cost of capital is also significantly impacted by the time anticipated it will take to develop a new medicine.

The Economics of Pharmaceuticals

In an FTCM world, the cost of capital dramatically declines. Keep Dr. Gottlieb’s insightful economic perspective in mind and consider a radical innovation with a new drug developed by a small biotech company. This innovation will never have a chance to save lives unless it gets funding from investors to finance a decade of FDA clinical testing and approval processes; but investors see super high risk and a very long time before a possible payout. In particular, who knows what clinical milestones the FDA will demand for a new drug that sharply differs from existing drugs (i.e., high risk)? As Dr. Gottlieb also notes in his speech, capital moves away from high risk and uncertain investor returns in the distant future. In contrast to this status quo world, let’s consider investors operating in an FTCM world.

In an FTCM world, investors see an opportunity for the highly innovative new drug to demonstrate safety and effectiveness -- and possibly a new standard of care -- up to seven years earlier than the status quo process (much lower investor risk). Moreover, the complete FTCM proposal includes an alternative FDA approval—Observational Approval, based on exceedingly strong observational data. Such an approval would expedite insurance reimbursement. In an FTCM world, the cost of capital dramatically declines, investment flows to the most promising new drug developers, and patients have freedom of choice to gain early access.

More Than One Way to Test

In contrast to a total-systems perspective that focuses on the system goal, economics, and patient access, the ScienceBlogs article touts the benefits of randomized control trials, regardless of how high their costs (in time and money). Since I disagree, I must be unaware of the details of randomized control trials --or so goes the criticism. Not true. In my book, Free To Choose Medicine: Better Drugs Sooner at Lower Cost, I review the pros and cons (including the serious ethical issues with some randomized control trials) of both observational data and randomized control trial data.

The second benefit of FTCM obscured by the ScienceBlogs article involves how FTCM is a self-adjusting, dynamic system whereby patients voluntarily select a not-yet-approved drug that has passed Phase I safety trials and one or more Phase II trials. All treatment results, adverse side effects, and patients’ genomic makeup and relevant biomarkers would be posted on an Internet-accessible Tradeoff Evaluation Drug Database (TEDD). The observational data on TEDD enables patients, advised by their doctors, to make informed decisions. Importantly, up-to-date information about subsets of patients that do well or poorly with not-yet-approved drugs would be readily available. TEDD would also be a treasure trove of data that promotes improved R&D decisions by drug developers. FTCM would bring a fast-paced competitive world that ultimately benefits patients similar to the rapid innovation that takes place in the private sector with cell phones, personal computers, and the like.

Observational data is not just a convenient component to a free-market approach that ignores the science of randomized control trials, as purported by the ScienceBlogs article. Big data analytics applied to observational data is currently improving processes in many areas of business, and it plays a key role in FTCM. As to how this technology applies to medicine, here is a quote from a September 12, 2017 article in the Wall Street Journal, “Clinical Drug Trials May Be Coming to Your Doctor’s Office,” by Dr. Amy Abernethy, chief medical officer of Flatiron Health, and Dr. Sean Khozin, director of the FDA’s Oncology Center of Excellence:

There is strong demand for access to experimental therapies in clinical trials, but only an estimated 3% to 5% of adult cancer patients in the U.S. end up participating. … Electronic health records, now common in U.S. medical practices, allow physicians to collect timely and detailed data [observational data] that could be used for exploring ways of bringing clinical research directly to patients. Those records are becoming the technological building blocks of a new research model based on real world evidence …such information could help doctors personalize therapies based on the patient’s genomic makeup.

This resonates with FTCM’s TEDD, is forward-looking, and is focused on using technological advancements to help patients. The myriad criticisms in the ScienceBlogs article are rooted in a paradigm for FDA clinical testing that goes back to 1962 legislation. It is out of step with today’s technology to the detriment of patients. On a more optimistic note, Dr. Gottlieb and Dr. Khozin of the FDA represent thinking that is innovative and addresses the fundamental goal of better drugs, sooner, at lower cost.  

Free To Choose Medicine legislation has the potential to gather bipartisan support as a practical means to accelerate innovation and lower the costs of prescription drugs. For more information, readers should see Lawrence Reed’s article and, in particular, the listing it provides for further information. 

Every American should have the right to make informed decisions that can improve health and save lives.

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