By Justin Wenig (PO ’19)

Drug manufacturer Mylan made headlines last week when it was revealed that the price of its lifesaving generic medical device called the EpiPen rose more than 500% since 2007. The EpiPen is the latest in a series of widely publicized generic drug price hikes including a 2800% increase to the popular heart-rhythm drug isoproterenol and a 5000% increase to the life-saving AIDS drug Daraprim. Despite the negative publicity generic pharmaceutical companies have received for raising prices of essential generic drugs, many of these companies continue to engage in price hikes. With no end in sight to the wave of generic drug price increases, the Federal Drug Administration (FDA) has several options it can take to ensure that essential off-patent pharmaceuticals are affordable.

One way that the FDA can make generic drugs more affordable is by prioritizing review of pharmaceuticals that may increase market competition and reduce costs for consumers. Researchers at Johns Hopkins have suggested that under the 1992 Prescription Drug User Fee Act (PDUFA) the FDA can prioritize review of life-saving off-patent drugs as long as the drug “could help mitigate or resolve a drug shortage and prevent future shortages.” By moving generic drugs that may enhance competition to the top of the review queue, the FDA may shorten the lifespan of markets with little or no competition that permit companies to engage in price gouging.

Another way the FDA can take action is to permit non-FDA approved drugs to be sold when uncompetitive markets emerge. The FDA can permit a practice called compounding, defined as when an outsourced facility or licensed pharmacist makes a medication that has not undergone the FDA’s drug approval process, according to the Compounding Quality Act of 2013. While the act only permits certain listed medications to be compounded, it also retains the right for the FDA to add other compounded medications to the list under exceptional circumstances. Exceptional circumstances could include an uncompetitive generic drug market that endangers public health. Therefore, the FDA can legally permit compounding of generic drugs when they become unaffordable and public health is threatened. Permitting prohibited compounded medications is not without precedent; in 2012 the FDA waived enforcement action against compounded versions of a lifesaving injectable, hydroxyprogesterone caproate, after the FDA-approved form became too expensive.

A riskier way the FDA can promote affordability of off-patent medical products is to loosen standards for its drug review process. Pharmaceutical companies and its allies have long argued that uncompetitive medical product markets are a result of the FDA’s competition-stifling review process. Mylan’s EpiPen monopoly, for example, was aided by the FDA’s rejection of three separate competitors since 2011, according to Bloomberg.

This solution is risky, however, because it could allow deficient or even dangerous pharmaceuticals to reach the market. Still, the FDA could consider the potential benefit of creating competition in the generic drug market and its potential impact on affordability and thus public health. The increased affordability caused by competition could be considered the tiebreaker when a generic drug is on the fence for approval.

Pharmaceutical companies will not stop taking advantage of uncompetitive markets anytime soon. The recent wave of generic drug price hikes indicates that the FDA should to take steps to prevent and shorten the lifespan of uncompetitive markets. There are clear-cut steps the FDA can take to stimulate competition and reduce costs for consumers. With cost prohibiting some consumers from accessing lifesaving generic drugs, it is clear that the FDA must look to take action to make generic drugs more affordable.