THE FDA VS. SMALL PHARMA

September 24, 2007

In a little-noticed program, the Food and Drug Administration (FDA) is cracking down on legacy drugs: those that are generally recognized as safe and effective, and have been prescribed by physicians for decades, or longer.  But since they lack a formal FDA stamp of approval, they're being yanked from the market, says the Wall Street Journal.

Consider:

  • Legacy drugs form about 2 percent of the total pharmaceutical market, and they're generally prescribed not to cure illness but to relieve symptoms -- cough, cold and allergy, as well as other specialty medications.
  • They're manufactured by several hundred small- and medium-sized companies; the active ingredients and compounds are approved by the FDA and the drugs are synthesized in FDA-licensed facilities.

Legacy drugs aren't medical moonshine cooked up in somebody's bathtub; nor are they new or experimental drugs.  Nonetheless, the FDA is requiring them to be put through the same regulatory wringer, says the Journal:

  • Some must complete a New Drug Application, which requires clinical trials and can cost between $5 million and $10 million per legacy drug.
  • The alternative, an Abbreviated New Drug Application, still costs over $1 million (a lot of money to reinvent the wheel).

These costs are of course passed on to patients in higher prices -- assuming the drugs remain on the market and their makers stay in business.  The industry has small profit margins and lacks the deep pockets and compliance teams that Big Pharma uses to navigate the FDA bureaucracy.

Source: Editorial, "The FDA vs. Small Pharma," Wall Street Journal, September 21, 2007.

For text:

http://online.wsj.com/article/SB119034314050334867.html 

 

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