How the FDA helps jack up the price you pay at the pharmacy counter

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SOUTH SALT LAKE, Utah–Megan lives in South Salt Lake and takes the drug Kisquali to treat her breast cancer. When she got to the pharmacy counter last year, she found out it would cost $4,000 a month.

“I almost burst into tears. I have to take it to basically live. Guess I’m going to blow through all my savings…And I remember doing the math in my head and thinking, ‘Okay, how much money do I have for how long can I live?'” Megan said.

Just as most people believe prescription drug prices are too high–and point to examples of pharmaceutical companies astronomically hiking the prices of life-saving medications like the Epi-Pen–most economists who study drug pricing think policies at the Food and Drug Administration (FDA) are a major cause of the problem.

The FDA is responsible for handing out patents for new pharmaceuticals. Without permission from the FDA, most companies cannot sell their product.

However, Professor Robin Feldman from the University of California at Hastings was one of many experts who pointed out a huge issue with how the FDA hands out exclusive patents for medications during a Congressional hearing last year.

“More than three-quarters of the drugs associated with new patents are not new drugs coming on the market; they are existing ones,” Feldman said.

This means the FDA is allowing pharmaceutical companies to take over expired patents for drugs.

Once they get that monopoly, lower-cost generics are taken off the market, and the price everyone pays at the pharmacy counter goes up a lot.

Take Colchicine, a treatment for gout that’s been around since ancient Greece. Dr. Gilbert Berdine from Texas Tech University says a couple of years ago the FDA gave URL Pharma the exclusive patent to it, meaning they were the only company that could manufacture and sell the drug in the United States.

“[The company] simply took data that was already in the public domain, and they ran some new statistical analysis. And the FDA granted them a monopoly privilege…Overnight, they took a medication that cost maybe 10 cents a tablet, and they raised the price to $50 a tablet because they could,” Berdine says.

The price most people ended up paying was about $5 a pill, which is still a large increase.

The same thing happened when the FDA let Marathon Pharmaceuticals take over the patent for the muscular dystrophy drug Deflazacort. The price went from a couple of hundred dollars a year to $89,000.

Deflazacort had been around for decades. But the lower cost, generic alternatives had to be taken off the market once Marathon Pharmaceuticals had the exclusive rights to it.

Companies can acquire those patents just by changing the dosage of a drug.

For its part, the FDA says they have to make some products temporarily illegal for safety reasons. For example, regulators believed single-ingredient oral Colchicine was linked to more than 100 deaths.

But those explanations are confusing to doctors and patients, who have used the newly prohibited medications for years with no problems. They also question why some medications that have also been linked to deaths in the past–aspirin, for example–are still allowed on pharmacy shelves.

There are ways around the high prices for some.

Megan, the breast cancer patient at the beginning of our story, got lucky. Although she is taking a brand new drug that has no generic alternative, a pharmacist helped her enroll in a program that reduced her cost to $10 a month.

“What if it was someone else? What if it wasn’t someone who could put in two hours worth of their time searching through coupons and scholarships to find this special deal?” Megan asked.