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.
Is it just small, opportunistic drug companies that are “gaming” the system, or is this something bigger companies do as well?
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.
What about the rest of the administration? Trump talked a lot about drug pricing on the campaign trail and after, yet we haven’t seen much action other than yours.
I’m not acting as a lone actor. I’m acting in consort with other folks and certainly keeping my superiors informed. I think that there are certainly things going forward that we do in collaboration with other agencies.
We haven’t announced everything that we intend to do. I want to make sure that some of the other things are more fully baked.
What about an executive order on drug pricing — there was talk that Trump was going to come out with something. Is that still being worked on?
I refer all questions to the White House.
What about drugs like EpiPen? Would you come out with new rules there to create more competition? [EpiPen, made by Mylan NV, is what’s known as a drug-device combination, where both the medicine and the device that administers it can have patent protections.]
Sometimes drug-device combinations will have very specific features of their device that correlate with very specific directions for use that have patents associated with it. So it may be like, “twist right, pull out, push down, puncture the patient.”
If you want to develop a generic equivalent of that product, you have to have, under the current interpretation, the exact same instructions for use.
So it begs the question: Could we, under our current rules, take a look at that interpretation?
Now, I’m not speaking about any specific product, I just want you to know that.
But is it reasonable to assume you’re looking at doing something like this, on these types of devices?
That’s something that I think we’re looking at very actively.
One of the things we’ve seen from the administration is, get rid of regulation, get rid of regulation, get rid of regulation. How does your philosophy as a regulator — one of the biggest regulators in the U.S. government — how does that line up with what the Trump administration has called for?
I do think we need to be judged a little bit differently in terms of what our mandate is and the impact of our regulation. We’re not the FTC. We’re not the SEC. We have a public-health mandate.
A lot of our regulations transcend any economic purpose — they have a public-health rationale that sometimes isn’t measured in an economic analysis.
There are regulations that are so outdated that they should be pulled. We have a regulation that sets standards of identity on cherry pie. I’m not sure that in the context of our public-health priorities, putting forth new regulation to update the guidelines on what should be cherry pie falls within the same realm as trying to solve the opioid crisis.
Some of the things you’re doing to create more competition among drugs, people could interpret as a loosening of standards. I wonder if you think that’s the case?
That’s not true. That would be an unfair assessment. A lot of what I’ve done so far is focus on generic drug approvals. The standard for generic drug approvals has gotten more rigorous in recent years.
I think that when people use a generic drug, they should have an absolute assurance that it’s going to be just as safe and effective as the branded alternative and nothing we’ve done — nothing — will have any impact on that.
Through the years we’ve seen the agency go through cycles, of pushing drugs out into the market faster, versus being much more conservative about safety. Is the balance at the FDA changing?
I don’t think that there’s this sort of binary trade-off.
I talk about efficiency. I think we can make the drug development process more efficient and that’s really what we’re talking about here. We’re not talking about the review process. The review timelines are relatively short and we, by and large, hit the review goals that we set.
What we’re talking about is the clinical development process and how long does it take to actually go through the clinical trial requirements that FDA either imposes, or sort of steers toward, in order to demonstrate safety and efficacy to satisfy the regulatory process and increasingly satisfy companies’ commercial prerogatives too.
Just because we’ve done something historically one way doesn’t mean that that’s the best way to measure clinical benefit.
How broadly can you apply new standards or guidelines for drug approval? There’s been talk about it in cancer, but what about other diseases?
You see it outside of cancer, too.
Instead of doing, again to the cancer example, instead of doing 100 patients in pancreatic cancer for this driver and getting approval there, 100 in liver cancer, and 100 in lung, you do a basket trial where you include a certain cohort from each of the cancers, you put them into one trial and that’s how you reach this efficient end to have the statistical power you need, rather than doing individual trials.
It’s a concept in oncology that’s been used, but I think it’s a concept that we can apply more broadly to different areas.