According to a new study cited by STAT, an FDA program to keep all drugs safe on the market is allegedly adding billions to U.S. healthcare spending.
The reported FDA program which began in 2006 is known as the Unapproved Drugs Initiative. The project allowed drugmakers to get regulatory approval for drugs which they had on market and available on a grandfathered basis because they predated stricter requirements.
The purpose of the program was to ensure that all the drugs in the market were effective and safe. Some of the drugmakers however decided to not pursue regulatory approval, thus opening opportunities for monopolies which lead to price hike, as reported by STAT.
According to a healthcare performance improvement company- Vizient, the program may be adding $20.3 billion to U.S. healthcare spending.
Furthermore, four drugmakers acquired FDA approval for drugs between 2013 and 2019. The approvals were for drugs available on the market. It was revealed that the manufacturers did not have to compete with other versions of the drugs because the manufacturers did not have regulatory approval.
Three cases then also revealed that drugmakers were granted different types of marketing exclusivity. The prices of the drugs were also raised between 525 percent and 1,644 percent, as stated by STAT.
Belcher Pharmaceuticals for instance received orphan drug status for its variant of dehydrated alcohol, a drug that has been available for years, and hiked the price by nearly 600 percent.
Based on a report present by Vizient out of the 19 unapproved drugs on the market would follow the same pattern, thus causing another $8.75 billion in healthcare spending in the next five years.
In the wake of the results revealed, FDA commented, “keenly aware of price fluctuations that can occur on the heels of its regulatory actions and takes steps within its authority to minimize the duration, if not the extent, of those price hikes. Although following the FDA approval process may result in cost increases for a drug over the short term, the risks to the individual patient are substantially reduced, and the benefits are assured for the long term.”