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TOTM ICLE President Geoffrey Manne and Director of Innovation Policy Kristian Stout's latest post on Truth on the Market about how the successful COVID-19 vaccine trials demonstrate the value of the patent system.
With the COVID-19 vaccine made by Moderna joining the one from Pfizer and BioNTech in gaining approval from the U.S. Food and Drug Administration, it should be time to celebrate the U.S. system of pharmaceutical development. The system’s incentives—notably granting patent rights to firms that invest in new and novel discoveries—have worked to an astonishing degree, producing not just one but as many as three or four effective approaches to end a viral pandemic that, just a year ago, was completely unknown.
Read the full piece here.
TOTM No matter your Twitter feed, “vaccines have been one of the greatest public health tools to prevent disease,” as The New York Times explained in . . .
No matter your Twitter feed, “vaccines have been one of the greatest public health tools to prevent disease,” as The New York Times explained in January…
Many are terrified that the Food and Drug Administration may hastily authorize injections into hundreds of millions. The FDA and drugmakers are trying to assuage such concerns with enhanced commitments to safety. Nonetheless, fears have been stoked by President Donald Trump’s infomercial-style endorsement of hydroxychloroquine as a COVID-19 remedy, his foolhardy disdain for face masks and campaign rally boasts of a preelection cure.
TOTM The brutal toll of the coronavirus pandemic has delivered dramatic public policies. The United States has closed institutions, banned crowds, postponed non-emergency medical procedures and . . .
The brutal toll of the coronavirus pandemic has delivered dramatic public policies. The United States has closed institutions, banned crowds, postponed non-emergency medical procedures and instituted social distancing. All to “flatten the curve” of illness. The measures are expensive, but there is no obvious way to better save lives.
TOTM Abstinence approaches work exceedingly well on an individual level but continue to fail when applied to populations. We can see this in several areas: teen . . .
Abstinence approaches work exceedingly well on an individual level but continue to fail when applied to populations. We can see this in several areas: teen pregnancy; continued drug use regardless of severe criminal penalties; and high smoking rates in vulnerable populations, despite targeted efforts to prevent youth and adult uptake.
Written Testimonies & Filings Summary Chairman Marino, Ranking Member Cicilline, and Members of the Com- mittee, thank you for giving me the opportunity to testify before you today. The . . .
Chairman Marino, Ranking Member Cicilline, and Members of the Com- mittee, thank you for giving me the opportunity to testify before you today.
The overriding point of my testimony is that the proposed CVS Health/Aetna merger presents a creative effort by two of the most well-in- formed and successful industry participants to try something new to reform a troubled system. Absent overwhelming evidence that the merger would create an unacceptable risk of harm, the effort should be welcomed and en- couraged. And, as it happens, I have seen no evidence of even a small risk of harm.
It seems fair to say that the predominant characteristic of the CVS Health/Aetna merger is its prospect of developing, on a larger scale than ever before, innovative approaches to healthcare that could transform our healthcare system. As one analyst noted in an article titled, “Why CVS/Aetna Could Be a Game Changer”:
What CVS seeks to do with this deal is to dramatically accelerate that process, and change the nature of the neighborhood pharmacy. For example, we already know that getting a flu shot at the pharmacy is more convenient than making an appointment with a doctor.
What if an entire array of services was available at the pharmacy? Better yet, what if it would cost less to have those services performed at the pharmacy? The advantage to the provider is clear; send the patients to the pharmacy, and free up the doctors for more pressing needs.
Even this touches on only the tip of the potentially transformative iceberg. The proposed merger has the aim and the potential to demonstrate that it is feasible to provide integrated care with a focus both on both lowering costs for therapeutic treatments, such as prescription drugs, as well as enhancing the effectiveness of preventive care in order to reduce the need for therapeutic treatments in the first place.
In this light, I believe that it is important to view this merger not as a combination tending to concentrate economic power in the existing industry structure, but as a significant step toward a reorganization of the industry itself.
Written Testimonies & Filings Written Statement of Geoffrey A. Manne on “Antitrust Concerns and the FDA Approval Process” U.S. House of Representatives Committee on the Judiciary, Subcommittee on Regulatory Reform, Commercial, and Antitrust Law.
Written Statement of Geoffrey A. Manne on
U.S. House of Representatives Committee on the Judiciary, Subcommittee on Regulatory Reform, Commercial, and Antitrust Law
Poorly drafted regulations, especially in heavily regulated industries, can create opportunities for anticompetitive abuse. Established companies know how to navigate regulatory mazes, and the complexities of such regimes create innumerable opportunities for nominal compliance at the expense of competition, innovation, and new entry.
The legislative and regulatory impulse when faced with deeply entrenched regulations and their competitive manipulations is often to pile on, either with even more-complex regulatory amendments or else antitrust enforcement that side-steps the root problem, focusing on “fixing” allegedly anticompetitive conduct rather than reforming the underlying laws that facilitate it.
But the government has a questionable track record in promoting competition, not infrequently adopting policies seemingly tailor-made to perpetuate, rather than constrain, harmful conduct.
The FDA Act and the regulations promulgated under it by the agency stand as Exhibit A in this regard. Last year’s controversy over Mylan Pharmaceuticals’ price hike on the EpiPen, for example, is symptomatic of the problem. The market for pharmaceuticals is complicated, but one thing seems clear in the pricing controversy: the FDA has been an effective ally for Mylan in keeping out competitive producers of generic epinephrine auto-injectors. Drug safety is important, of course, but since 1962 the FDA has also reviewed drugs for “efficacy,” which introduced massive delay and uncertainty, arguably without concomitant benefit. And the FDA’s approval and oversight processes for generics and biosimilars, although improved since 1962, continue to impede effective entry. Thus, with the field clear of competitors, it is no surprise that Mylan was able to raise prices. Only following the angry public outcry did the FDA finally accelerate its review process and approve a competing product last month.
But efficacy review is not the FDA’s only regulatory cul de sac through which pharmaceutical manufacturers can employ regulatory policies to keep unwanted competitors off the block. In particular, one aspect of the FDA’s drug safety oversight regime has emerged as a device for some manufacturers to delay generic entry: the Risk Evaluation and Mitigation Strategies, or “REMS,” program.
What I will refer to collectively as the FDA Act’s REMS program comprises two elements that are relevant here: First, it requires branded drug manufacturers to make samples of their drugs available to would-be generic entrants so that they can use them in the lengthy safety and efficacy testing process required to secure FDA approval. Second, it requires brand drug companies to adopt a concerted set of practices and policies aimed at mitigating the risks inherent in the use of most drugs, and additional, more restrictive practices to ensure the safe use of particularly dangerous or addictive drugs — the so-called “REMS with ETASU” (“Elements to Assure Safe Use”). The program also requires that brand manufacturers allow generic entrants to share in these enhanced mitigation processes in order, presumably, to streamline the process and economize on compliance costs.
By forcing collaboration between competitors, the REMS program is practically tailor-made for problems. Although the FDA Act specifically prohibits the use of these regulatory elements to block lower-cost, generic alternatives from entering the market (of course), almost immediately following the law’s enactment, a small handful of branded pharmaceutical companies began using REMS for just that purpose (also, of course).
Some (now-former) FTC commissioners, among others, have raised concerns that brand drug manufacturers can (and do) take advantage of these provisions by adopting tough negotiating positions that, they allege, amount to anticompetitive exclusion requiring agency enforcement. I believe that that would be decidedly the wrong approach to dealing with the issue. These are not properly antitrust problems; they are problems of poor regulatory design.
But it is also true that the program itself exists to implement an underlying policy that may be even worse, and it is likely that reforming a few key elements of the program would help prevent such abuses — but Congress should adopt more fundamental policy changes, as well.
The first part — sharing samples — cannot easily be fixed by removing the required collaboration, at least not without completely revamping (or removing) the FDA’s drug safety and efficacy oversight function (however desirable reform of these functions would be). But the second — sharing REMS programs — can be.
Read the full statement here.
TOTM In Brussels, the talk of the town is that the European Commission (“Commission”) is casting a new eye on the old antitrust conjecture that prophesizes . . .
In Brussels, the talk of the town is that the European Commission (“Commission”) is casting a new eye on the old antitrust conjecture that prophesizes a negative relationship between industry concentration and innovation. This issue arises in the context of the review of several mega-mergers in the pharmaceutical and AgTech (i.e., seed genomics, biochemicals, “precision farming,” etc.) industries.
TOTM I’d like to begin by discussing Geoff’s post on the pending legislative proposals designed to combat strategic abuse of drug safety regulations to prevent generic competition. Specifically, . . .
I’d like to begin by discussing Geoff’s post on the pending legislative proposals designed to combat strategic abuse of drug safety regulations to prevent generic competition. Specifically, I’d like to address the economic incentive structure that is in effect in this highly regulated market.
TOTM Brand drug manufacturers are no strangers to antitrust accusations when it comes to their complicated relationship with generic competitors — most obviously with respect to . . .
Brand drug manufacturers are no strangers to antitrust accusations when it comes to their complicated relationship with generic competitors — most obviously with respect to reverse payment settlements. But the massive and massively complex regulatory scheme under which drugs are regulated has provided other opportunities for regulatory legerdemain with potentially anticompetitive effect, as well.
