FDA Defies Congress, Slips Money to Hospitals, and Stiffs Consumers

But we can stop it now. Action Alert!
For some time now we have been explaining how the FDA appears to be trying to put compounding pharmacies out of business in order to boost the profits of its major client, the pharmaceutical industry. It doesn’t seem to matter to the agency that you will no longer be able to get critically important drugs, or your medications in the right form. All that seems to matter is Big Pharma profits.
We recently also described how part of this same process is not allowing doctors to buy drugs, primarily from compounding pharmacies, for “office use.”
This means you have to go to a doctor, be told that you need a B12 shot, go home while the doctor orders the B12, go back for the shot, and pay four to five times what the shot previously cost—on top of all the time, including recovery time, wasted. This alone shows how completely hypocritical the FDA is about reducing medical costs.
It is possible to fight back, primarily through Congress. In December 2015, our allies in Congress included a provision in an end-of-the-year spending bill that, among other things, directed the FDA to issue a guidance document clarifying how physicians and compounding pharmacists could continue “office use.” The language could not have been clearer: the agency was not to forbid “office use.”
Following Congress’ rebuke, the FDA did indeed release guidance documents pertaining to office use—but outrageously, the agency stated once again that traditional pharmacies cannot engage in office use. In other words, the FDA flagrantly defied Congress’ directive.
Even more unbelievably, the agency issued another guidance document that creates an exception to this ban. Traditional compounding pharmacies that are owned by a hospital or health system (which the FDA defines as a collection of hospitals owned and operated by the same entity) may continue to make customized medications without an individual prescription. They get “office use,” but no other doctors do.
The FDA discriminating in favor of hospital companies and handing them financial windfalls is nothing new. As we’ve noted in our coverage of laboratory developed tests (LDTs), we think part of the reason the FDA has been so hostile to innovators like Theranos is to protect the financial monopolies hospitals and a few large companies have over medical testing.
The creation of local hospital monopolies, probably influenced by campaign gifts and the like, pervades the entire government’s approach to healthcare. Medicare pays out more to doctors affiliated with hospitals, providing very strong direct government incentives for the creation of local monopolies centered on hospital-employed MDs (even though many don’t actually work on the hospitals’ premises). This also helps keep medical costs high.
It is time for the FDA to be held accountable for ignoring the expressed will of Congress, not to mention doctors and millions of patients who need their medications. There is currently an effort in the House of Representatives to withhold funding from the FDA until the agency fixes the problems it has created in the compounding industry, restricting consumer access to this vital branch of medicine. Perhaps the FDA will listen when its budget is in sufficient jeopardy.
Action Alert! Write to your representative in the House and urge him or her to support the FY 2017 appropriations language that would withhold funding from the FDA until the agency states how it will allow “office use” of compounded medicines to continue, and how the compounding of supplements will move forward and at reasonable prices. Please send your message immediately.