U.S. Food and Drug Administration Commissioner Scott Gottlieb spoke with Bloomberg News about drug pricing, new medicine and regulations. This transcript of the interview has been edited for clarity and length.
Bloomberg: What’s the FDA’s role to play in drug pricing and what can the agency do, given that it hasn’t traditionally had a mandate to address the issue?
Gottlieb: There are situations where drug companies -– branded companies -–- are taking advantage of certain rules to prolong monopolies beyond the point in which Congress intended, and that’s what I’ve called the “gaming.”
We want to have more generic drugs approved on the first cycle. That’s not only going to get more competition into market, it’s also going to end what I call the opportunity for regulatory arbitrage where you see speculators come into the market and pick off a generic drug that might not face a lot of competition.
Now they have a monopoly for themselves and they’re able to jack up the price because our process itself isn’t efficient. So we’re going to try to target those products.
Bloomberg: Is it just small, opportunistic drug companies that are “gaming” the system, or is this something bigger companies do as well?
Gottlieb: It runs the gamut. I think that if a company has the opportunity to take legal advantage of certain regulations to extend the franchise, more often than not they’re going to do it, and more often than not they’re going to say that they have a fiduciary obligation.
In most cases, we’re talking about activity that isn’t explicitly illegal, or hasn’t been deemed illegal, and just is antithetical to the principles that I think we support when we want to support a market-based pricing system.
I still want to focus attention on making sure that the new drug approval process is efficient, science-based and that we have sort of clear efficient rules there. Because, as we all know, drugs are ultimately priced to some measure on the cost and capital spent.
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