Pharmaceutical RegulationMMHA 6135 Week 5 Application

Danielle Tate

Introduction

The Pharmaceutical industry is a highly regulated submarket in terms of what

drugs get approved for national, safe, and legal consumption. This submarket is managed

by a branch of the government called the U.S. Food and Drug Administration (FDA).

“The mission of FDA's Center for Drug Evaluation and Research (CDER) is to ensure

that drugs marketed in this country are safe and effective. CDER does not test drugs,

although the Center's Office of Testing and Research does conduct limited research in the

areas of drug quality, safety, and effectiveness” (U.S Food and Drug Administration

(FDA), 2014). The FDA is responsible for approving drugs for use, performance drug

reviews, and post-marketing risk assessments for prescription drugs and nonprescription

drugs or over-the-counter (OTC) drugs (FDA, 2014). In 1992, the Prescription Drug User

Fee Act (PSUFA) was passed. PDUFA has enabled the Food and Drug Administration to

bring access to new drugs as fast or faster than anywhere in the world, all while

maintaining the same thorough review process. Under PDUFA, drug companies agree to

pay fees that boost FDA resources, and FDA agree to timeframes for its review of new

drug applications” (FDA, 2015).

Regulatory Process

According to the FDA website there are twelve, highly regulated, steps that make

up the pre-clinical process and clinical process that must be followed to get a drug

approved. First the drug must be developed and it is tested on animals for toxicity and

efficacy. Secondly, the sponsor submits an Investigational New Drug (IND) application

to the FDA based on results from animal testing and includes a proposal for human

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testing. Thirdly, human testing begins to determine side effects and how the drug is

metabolized in the body. Fourthly, more human testing is done to determine the

effectiveness of the drug on certain diseases or conditions. In the fifth step, safety and

effectiveness are still evaluated, along with different populations, dosages, and the

combination of this drug with other drugs. The sixth step involves the FDA meeting with

the drug sponsor before an application is submitted. The seventh steps is the formal NDA

application where the sponsor asks for official approval of the drug. The sponsor must

include how the drug is manufactured and all the findings in the animal and human

testing. In the eighth and ninth step the FDA has 60 days to decide if the NDA

Application will be submitted to be reviewed by the FDA team and evaluate the research.

In the tenth step, the FDA reviews the drug’s labeling and assures the right information is

present to health care professionals and consumers. In the eleventh step, the FDA

inspects the facility where the drug is manufactured. And lastly, the twelfth step is drug

approval or a denial/response letter. Periodic post-approval risk assessments are done by

the FDA to ensure the drug’s continued safety and report any serious side effects that

should be put on the label or to pull the drug from consumption (FDA, 2015).

Extent of Regulation

The pharmaceutical industry should be highly regulated due to the safety of the

American people and the high risk of injury or death that could occur if medications are

not evaluated and administered properly. Horn (2011) discusses Daniel Carpenter’s view

of the FDA in his book and explains that the FDA does an incredible job at regulating the

pharmaceutical industry, “focusing on the stellar reputation and its ability to wield power

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as a regulatory body…Specifically, Carpenter complicates the notion that modern

bureaucracy is either ‘captured’ by interests it is assigned to regulate, or that it stands as a

defender of the ‘public interest’”. This suggests that the FDA has pure intentions and

holds the interest of the American people in high esteem (Horn, 2011).

Although the process is highly regulated, there is still room for improvement, due

to the high amount of misuse of prescription drugs. The escalating misuse of long-acting

opioids has prompted efforts to formulate safer therapies for patients suffering from pain

while also taking steps to limit inappropriate prescribing and illegal use. “The US Food

and Drug Administration agreed to tighter controls on widely used combination

hydrocodone therapies. FDA earlier called for labeling changes on long-acting opioids to

heighten awareness of risks and to limit prescribing” (Wechsler, 2013).

Another area of the pharmaceutical industry that requires more regulation, is the

realm of pricing. It is considered a free market place where pharmaceutical companies

can charge what they want, especially if the drug is in high demand and there’s a lack of

biosimilars, a lack of generics, and patents that prevent other companies from duplicating

the medication. Some legislation is being proposed to control drug costs. An example of

legislation that is being proposed to improve drug transparency for the purpose of

lowering costs is The Oregon House Bill (H.B.) 3486. This H.B. “requires drug

companies to provide a breakdown on costs associated with research and development,

clinical trials, manufacturing and distribution, as well as government grants and a number

of other items, on any therapy with a wholesale acquisition cost that exceeds $10,000

either annually or over the course of one treatment” (Connole, 2015). This H.B. could

allow consumers and even pharmacies to make more educated decisions. The better-

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educated consumers are regarding the origin of price inflation, could lower their

willingness to pay (Connole, 2015). Also, Obamacare has increased access to care which

should result in the market price falling (Martin, 2015).

With the aforementioned issues, it is clear that the U.S. Government’s and the

FDA’s involvement needs to have a stronger presence in the regulation of drugs and

healthcare as a whole. The Government could fund research for safer, less addicting

biosimilars that could help chronic patients. The Government funded insurances could

cover better substance abuse treatment programs and more alternative treatments to pain

medication, such as acupuncture, biofeedback training, and massage training. More

research could be focused on biosimilars, which could reduce drug prices. Capitations

could be put on drug prices. More drugs could be included on formularies and preferred

drug lists to give patients more options, which could also reduce price. These

propositions could make prescription drugs more of a public good.

Conclusion

The FDA has a diligent process for approving drugs and ensuring the safety of

patients. There is room for improvement regarding options for chronic pain patients and

lowering drug costs. The above suggestions could bring about positive externalities for

patients. Possible negative externalities that could occur are lower incomes for

pharmaceutical representatives and more debt for the U.S. Government. Something to

consider regarding drug price regulation is, “price constraints affect the profitability,

stock returns, and R&D of EU and U.S. firms...Had the U.S. used controls similar to

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those used in the EU, we estimate it would have led to 117 fewer new medicines and

4368 fewer research jobs in the U.S.” (Golec & Vernon, 2010).

References:

Connole, P. (2015). States target prescription drugs in ‘cap the copay’ bills; analysts warn

of offsets. Health Plan Week, 25 (13). Retrieved from:

http://aishealth.com/archive/nhpw042015-02

Golec, J., & Vernon, J. (2010). Financial effects of pharmaceutical price regulation on

R&D spending by EU versus U.S. firms. PharmacoEconomics, 28 (8). 615-628.

Retrieved from: http://search.proquest.com.ezp.waldenulibrary.org/pqcentral/docview/

603590364/DC60E45200F742EBPQ/2?accountid=14872

Horn, S. (2011). Reputation and power: organizational image and pharmaceutical

regulation at the FDA. Choice, 48 (6), 1170. Retrieved from:

http://search.proquest.com.ezp.waldenulibrary.org/pqcentral/docview/862161883/

fulltext/24055696427B4401PQ/1?accountid=14872

Martin, E. (2015). Healthcare policy legislation and administration: patient protection and

Affordable Care Act of 2010. Journal of Health & Human Services Administration, 37

(4), 407-411. Retrieved from:

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http://web.b.ebscohost.com.ezp.waldenulibrary.org/ehost/detail/detail?sid=73da358a-

b16a-47cc-af74-

a35168bd1b50%40sessionmgr113&vid=5&hid=101&bdata=JnNjb3BlPXNpdGU

%3d#db=bth&AN=101080018

U.S. Food and Drug Administration. (2014, November 11). How drugs are developed and

approved. Retrieved from the Food and Drug Administration website:

http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandAp

proved/

U.S Food and Drug Administration. (Accessed: 2015, June 6). Drug approval process.

Retrieved from the Food and Drug Administration website:

http://www.fda.gov/downloads/Drugs/ResourcesForYou/Consumers/UCM284393.pdf

Wechsler, J. (2013). Opioid regulation challenges FDA and manufacturers.

Pharmaceutical Technology Europe, 25 (12), 18-19. Retrieved from:

http://search.proquest.com.ezp.waldenulibrary.org/pqcentral/docview/1501845394/

AE499D6BE9844B28PQ/3?accountid=14872

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