FDA Makes One Small Regulatory Change in Effort to Stop the Next Martin Shkreli

March 15, 2016
By Alex Keown, BioSpace.com Breaking News Staff

WASHINGTON – A U.S. Food and Drug Administration regulatory tweak to the abbreviated new drug applications could stop predatory pharmaceutical companies from acquiring older drugs and dramatically increasing the price.

The new tweak for generic submissions for which there is currently only one manufacturer would prevent skyrocketing prices on older drugs like what happened with Daraprim, the 65-year-old toxoplasmosis treatment last year. Hedge fund manager turned pharmaceutical chief executive Martin Shkreli and his startup Turing Pharmaceuticals, acquired Daraprim for $55 million in August, then promptly increased the cost of the treatment by 5,000 percent. The medication went from about $13.50 per pill to $750 per pill.

The FDA’s change would speed up the review of generic submissions for drugs for which there is only one manufacturer. An FDA spokesperson told Bloomberg the regulatory change “could expedite review of as many as 125 generic drug applications.” In the case of Daraprim, had lost patent protection, but no other drug was developed to treat the parasitic disease that can impact those with weakened immune systems, such as cancer patients, AIDS patients and pregnant women. With a single drug on the market, the owner of the drug has tremendous power to price the drug where it wants. Even after Shkreli became the most hated man in America due to the Daraprim price increase, he lamented that he did not raise the price even more. Shkreli said he had a responsibility to his shareholders to generate strong revenue streams.

“No one wants to say it, no one’s proud of it, but this is a capitalist society, capitalist system, capitalist rules,” Shkreli said during a December Forbes panel. “My investors expect me to maximize profits, not to minimize them, or go half or go 70 percent.”

“Submissions for drug products for which there is only one approved drug product listed in the Prescription Drug Product List (the ‘active section’) of FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the ‘Orange Book’) and for which there are no blocking patents or exclusivities may receive expedited review, except where the approved drug product was approved pursuant to a suitability petition under section 505(j)(2)(C) of the Federal Food, Drug and Cosmetic Act.” The FDA said in its new ruling.

Additionally, the FDA said submissions that do not receive expedited review will be reviewed in the order in which they are received.

After the price increase for Daraprim, San Diego-based Imprimis Inc. announced it has developed a compound of pyrimethamine and leucovorin as a low-cost alternative to Daraprim. Imprimis said its combination treatment will have a price tag of $99 for 100 tablets, slightly less than $1 per pill.

In December, Shkreli was charged with seven counts of securities fraud related to his tenure as chief executive officer of Retrophin Inc. , the company he helmed before founding Turing. Shkreli is being charged with a misuse of company funds when he was CEO of that company. Prosecutors allege that Shkreli took company stock and used it to pay off personal debts. Additionally, Shkreli is charged with playing shell games with his former hedge fund, MSMB Capital Management, which lost millions of investor’s dollars, Bloomberg said.