The Theory
At the American Society of Clinical Oncology (ASCO), FDA Commissioner Dr. Scott Gottlieb introduced the Drug Competition Action Plan, which aims to lower new drug pricing by increasing generic (alternative) drug competition in the pharmaceutical market. Gottlieb suggested that when the production of new drug hits the market, the pharmaceutical companies should base the pricing on the market and its consumer. He sensed that top companies are abusing their authority to bring down companies that are producing generic drugs.
Root of the Problem
Many cancer drug executives at the conference disagreed with Gottlieb, saying that higher competition does not bring down the price. The drug pricing problem is mainly due to the higher prices of a specific drug. Also, it could be the increase in prescription prices that patients paid for at the pharmacy counter, which resulted in high-deductible health plans and usage of co-insurance. For example, the PD-L1 (a drug that targets specific cancer immunology cells) drug and treatment costs more than $100,000 a year, while generic drug comes with a lower price.
Implementing the Plan
Scott Gottlieb came up with the Drug Competition Action Plan to increase generic drug competition. The Drug Competition Action Plan consists of introducing generic drugs into the pharmaceutical market for patients to gain access to more affordable prices. The FDA has the plan mapped out, but cannot implement it yet because they are still in the early stages of executing it.
References
Center for Drug Evaluation and Research. (n.d.). FDA Drug Competition Action Plan. Retrieved October 16, 2019, from https://www.fda.gov/drugs/guidance-compliance-regulatory-information/fda-drug-competition-action-plan.
Holtz-Eakin, D., Holtz-Eakin, D. H.-E. P. D., Holtz-Eakin, I. D., Holtz-Eakin, R. D., Holt, C., Holt, C., … Freddie Mac. (2019, May 21). Improving Drug Pricing Transparency and Lowering Prices for American Consumers. Retrieved from https://www.americanactionforum.org/testimony/improving-drug-pricing-transparency-and-lowering-prices-for-american-consumers/.
Steenhuysen, J. (2018, June 3). FDA wants to shorten new drug monopolies to cut costs. Retrieved October 11, 2019, from https://www.reuters.com/article/us-health-cancer-fda/fda-wants-to-shorten-new-drug-monopolies-to-cut-costs-idUSKCN1IZ0V2.
Woodcock, J. (2019, June 19). Access to affordable medicine. Retrieved October 11, 2019, from https://www.fda.gov/news-events/congressional-testimony/access-affordable-medicine-06192019.