2015-08-13

FDA Approval

Tyler Cowen has an almost-interesting post on the idea that reliable drugs could be approved "at full Medicare and Medicaid reimbursement rates, if not higher. Drugs with lesser efficacy or higher risk could be approved at lower reimbursement prices."

A Couple Of Problems With Cowen's Post

First, the FDA does not grant approvals for drug reimbursement. Rather, the FDA determines whether a drug can be sold on the market - regardless of who will reimburse anyone for anything. It is then Medicare, Medicaid, and private insurance companies that determine whether they will reimburse anyone for the medication. Unless I'm misunderstanding Cowen, it sounds like he thinks that an FDA approval is the same thing as Medicare reimbursement.

Second, private payers have already implemented this plan. They have a formulary - a list of approved medications for which they will reimburse the patient - and if you choose an alternative therapy, they will often reimburse the patient for the cost that the formulary drug would have incurred. Certain exceptions apply, but the point is that it's not exactly a revolutionary idea. Cowen says "proposals of this kind deserve further attention," but from my vantage point, they are already being practiced.

How Should FDA Approvals Actually Work?

Most of us are patients, not pharmaceutical employees, so we have no vested interest in cleaning up the approval process. In addition, most of us aren't insurers, so we are somewhat insulated from the market price of a medication.

Thus, the only thing we should really care about is whether we have access to medications for which we might some day see a use. The approval should be a one-step process: submit a form, presto, you're approved. This is to ensure that patients have access to every therapy they might want to try.

Stop objecting before you start. :) This means that potentially unsafe medications will gain approval. Yes, but potentially unsafe medications already do gain approval. The only differences between a rubber stamp process and the current status quo are (1) it's a lot more efficient to just rubber stamp the darn thing, and (2) patients will not be under the mistaken impression that an FDA approval means that the drug is safe.

Drugs aren't safe. Doctors aren't pharmaceuticals experts. The only way to make sure you get the health care you need is to do your own research and critical thinking. Your doctor cannot do it for you. The pharmaceutical companies will not do it for you. The FDA lies about doing it for you.

So, approve everything and leave it to us individuals to do our due diligence. We who are informed already are!