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Remember Martin Shkreli, the pharmaceutical executive who jacked up the prices of an off-patent drug used by some AIDS patients last year and who was recently perp-walked for securities fraud? The Left treated his arrest as a victory for the common man, but it hasn’t made pyrimethamine, the active ingredient in Daraprim, any more available to those who need it.
Mark Baum, however, has done just that: Since last year’s media fiasco, the compounding pharmacy he runs has been selling drugs with the same chemical properties (with an added, relevant vitamin) for about a $1 a pill. That’s among the reasons why Shkreli’s antics didn’t lead to a pile of dead bodies.
The reason Baum’s company has been able to do this so quickly and inexpensively is because compounding pharmaceuticals are not subject to the same regulatory scrutiny as generic manufacturers and are often able to charge prices closer to the costs of manufacture.
Once the patent on a drug expires, other pharmaceutical companies are allowed to produce it. However, generics are still subject to the same manufacturing standards as the original drug and operate under a presumption of guilt; i.e., once the patent expires, manufacturers still have to prove to the FDA that their generic drug is bioequivalent to the patented drug before anything can be sold. (It’s as if, once the copyright expired, you weren’t allowed to reprint Tom Sawyer under that name until you’d demonstrated to the Manuscript and Book Administration that the text is identical to the original.)
In contrast, compounding pharmacies — who produce custom-made drugs to order — are not subject to the same presumptions of guilt: Assuming they have the rights to a chemical or can find one in the public domain, they can sell prescription drugs without first having to get FDA approval for each novel concoction. Unlike generics, they operate under a presumption of innocence.
While compounders have much greater flexibility, they have two catches. First — by both their nature and the presumption of innocence — they have fewer protections against risk, as FDA regulations do likely contribute to safety standards. In Massachusetts, there was a scandal a few years back about a slip-shod compounder that was implicated in dozens of deaths in the region. On the flip side, even a drug manufacturer with an impeccable record and multiple Nobel-prize winners on staff would have to pass a lengthy series of tests before being allowed to bring a tried-and-tested drug to market. Second, compounded drugs are generally not reimbursable through Medicare.
In his WSJ piece, Baum makes three proposals: allowing Medicare to reimburse for compounded drugs; provide incentives for doctors to prescribe less-expensive drugs; and:
Allow compounded copies of generics. Drugs approved by the FDA nevertheless have to go through a long and costly new FDA approval process before another manufacturer can bring the generic version to market. The agency instead should establish standards for generics producers and compounded-drug producers to copy drugs that have been off-patent for more than five years. This would increase patients’ choices for safe and reasonably priced drugs.
In other words, have the FDA switch its off-brand focus from prohibitive regulation under a presumption of guilt to protection against fraud under a presumption of innocence. That’s more likely to help people get the medication they need — and at no additional cost — than any budget busting proposal Sanders or Clinton will ever offer.