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FDA Reverses Decision to Give Drug Company Right to Ripoff Pregnant Women

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(photo: doug88888)

This is a rare piece of good news reflecting the positive impact investigative journalism and public outcry can have. The Food and Drug Administration has partly reversed its horrible decision to grant a drug company an exclusive monopoly over an already commonly used medication, which allowed that company to jack up prices 15,000%. From the Washington Post:

The Food and Drug Administration on Wednesday took the unusual step of announcing that it would allow pharmacies to continue to produce less expensive versions of a drug long used to reduce the risk that women will give birth prematurely.

The move was aimed at defusing a controversy that erupted after the agency approved the drug Makena to prevent preterm births. Makena’s owner, KV Pharmaceutical of St. Louis, is charging $1,500 a dose for the drug. The same compound had been available for years for about $10 to $20 a dose.

[…]

Although the agency usually does not recommend patients use compounded versions of FDA-approved drugs, “in order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound” the agent, the statement said.

The public domain drug progesterone become popular when research fully paid for by the government through the National Institutes of Health showed it was very effective at preventing preterm birth. As a result, it was made by compounding pharmacies and sold cheaply to women for several years. The FDA decided to give a company an exclusive monopoly over the medication, and the company did what unregulated monopolies always do, raise prices as high as possible to extort massive profits.

This egregious case is a prefect example of two of the biggest problems with brand name drugs in this country. Government patents and exclusive rights are meant to be a reward to private spending on innovative research, but, like this case, much of the innovative research is actually being paid for directly or indirectly by the taxpayers while private companies reap the rewards.

Then, once the government creates monopolies, it refuse to subject these monopolies to any form of price control. Unlike even a government-created monopoly for, say, a new phone, these drugs are often essential life-saving treatments meaning that, from an economic perspective, there is no price so high people won’t be willing to pay. The drug companies know this, and so they can and do charge outrageous prices.

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FDA Reverses Decision to Give Drug Company Right to Ripoff Pregnant Women

This is a rare piece of good news reflecting the positive impact investigative journalism and public outcry can have. The Food and Drug Administration has partly reversed its horrible decision to grant a drug company an exclusive monopoly over an already commonly used medication, which allowed that company to jack up prices 15,000%. From the Washington Post:

The Food and Drug Administration on Wednesday took the unusual step of announcing that it would allow pharmacies to continue to produce less expensive versions of a drug long used to reduce the risk that women will give birth prematurely.

The move was aimed at defusing a controversy that erupted after the agency approved the drug Makena to prevent preterm births. Makena’s owner, KV Pharmaceutical of St. Louis, is charging $1,500 a dose for the drug. The same compound had been available for years for about $10 to $20 a dose.

[…]

Although the agency usually does not recommend patients use compounded versions of FDA-approved drugs, “in order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound” the agent, the statement said.

The public domain drug progesterone became popular when research fully paid for by the government through the National Institutes of Health showed it was very effective at preventing preterm birth. As a result, it was made by compounding pharmacies and sold cheaply to women for several years. The FDA decided to give a company an exclusive monopoly over the medication, and the company did what unregulated monopolies always do, raise prices as high as possible to extort massive profits.

This egregious case is a prefect example of two of the biggest problems with brand name drugs in this country. Government patents and exclusive rights are meant to be a reward to private spending on innovative research, but, like this case, much of the innovative research is actually being paid for directly or indirectly by the taxpayers while private companies reap the rewards.

Then, once the government creates monopolies, it refuse to subject these monopolies to any form of price control. Unlike even a government-created monopoly for, say, a new phone, these drugs are often essential life-saving treatments meaning that, from an economic perspective, there is no price so high people won’t be willing to pay. The drug companies know this, and so they can and do charge outrageous prices.

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Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is an expert on politics, health care and drug policy. He is also the author of After Legalization and Cobalt Slave, and a Futurist writer at http://pendinghorizon.com