Stardate 20031121.1349

(Captain's log): With respect to European caution compared to American courage, Ed writes:

Surprisingly, they seem to be much less cautious regarding introduction of new drugs/meds.

After the Thalidomide catastrophe, the FDA became notoriously cautious about approving new drugs. Thalidomide wasn't approved in the US (it was still in process at the time) and Thalidomide caused no deformed babies in the US. This reinforced the bureaucratic culture of caution at the FDA.

But the FDA is also inherently cautious, simply because of the situation they're in. If they approve a drug which ends up being dangerous, they will get roasted for it. But if they refuse to approve a safe drug, or if the approval process is extremely slow, they don't get roasted for all the people who suffer and die who could have been helped if the drug had been approved sooner. It's inherent in their situation that they will err on the side of caution because it's much riskier for the FDA bureaucrats to be too eager to approve a drug than to be too cautious about doing so. Whether that's good or bad for the rest of us is less clear.

The approval process is so long and so involved and requires such a mountain of data to be collected, that it is massively expensive. The total cost for development and approval can exceed $100 million per drug. And a lot of money can be consumed during the testing and approval for drugs which are ultimately rejected.

Pharmaceutical companies have to recoup that cost, and the money can only come from sales of drugs after approval. That's why drugs which are still under patent are so expensive compared to generics after patent expiration. Generics are priced based on a markup over manufacturing and distribution costs, whereas drugs under patent are priced to amortize the cost of development and regulatory approval, as well as to amortize the money spent on other drugs which were rejected.

The amortization premium paid by Americans is all the greater because most other nations in the world "free ride" on American drug development. (The majority of that development is done here, even by European pharmaceutical companies.) They pay something like the generic price even for drugs still under patent, letting the US alone pay the amortized development cost. When it comes to nations like Zambia and Botswana, I think it's reasonable, but not for nations like Germany and the UK. There's no excuse for them not paying their share of the development costs, and the only reason they don't is that we let them get away with it. If other wealthy nations did not free-ride that way, the drug companies could spread the amortized cost over a larger number of sales and reduce the price we Americans pay.

Canada is one of the nations which free-rides, and as always happens when there's a major price difference across a border, smuggling has become a problem. (TMLutas speculates that the result won't be a huge flood of drugs from Canada to the US so much as empty shelves in Canadian pharmacies. I think he's right.)

The approval process is extremely long. There needs to be testing and there needs to be an approval process, and some testing is inherently time-consuming, but the process doesn't need to be as long as it actually is. A lot of people have suffered and even died during the years-long interval between discovery of drugs which could have helped them and the point when those drugs finally reached the market and could be legally purchased. No matter how expensive a drug ends up being, it cannot help someone if they're not permitted to buy it at all.

This finally got noticed once the AIDS pandemic reached large size, as it was pointed out that there were drugs available which could help AIDS patients and in turn potentially slow the spread, which were also stuck in the FDA process and couldn't be legally sold. The FDA streamlined things a bit for some of those drugs, but didn't really change the process overall.

Because the approval process is so expensive, it didn't make economic sense for drug companies to pursue it unless there was a large potential market. That only makes sense, but it meant that there were drugs which had been developed to treat rare and obscure diseases (many of which are genetic in origin) which were (probably) both safe and effective, but which could not legally be provided to the people who needed them. The drugs had been found, purified, and had gone through preliminary clinical testing to show effectiveness, but were then shelved by the drug companies for financial reasons. Some of those drugs amounted to miracles for some people, but they were illegal miracles without FDA approval.

Those have become known as "orphan drugs", and advocacy groups for those diseases banded together and lobbied Congress to pass a law to create a special streamlined process by which those drugs can be made available to the people who need them. What's surprising is how "rare" a "rare disease" has to be, and the law defines this cutoff:

...the term "rare disease or condition'' means any disease or condition which (A) affects less than 200,000 persons in the United States, or (B) affects more than 200,000 in the U