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How Regulation of Medicine is Bankrupting the United States and What Congress Can Do to Stop It

October 2011

By William Faloon

Even Compounded Testosterone Costs Too Much

Even Compounded Testosterone Costs Too Much

As stated earlier, FDA regulations prohibit compounding pharmacies from making production-scale batches of popular drugs. Each compounded drug must be individually formulated by a licensed pharmacist. The result is that the labor involved in making a compounded drug comprises more than what the active ingredient costs.

But there are additional regulations that add even greater costs. Consumers require a prescription to buy compounded testosterone just like they do with FDA-approved testosterone. While competent physician supervision can enhance the safety and efficacy of a testosterone replacement program, the frank reality is that the majority of prescriptions for drugs like AndroGel® are not prescribed by physicians who understand how to optimally manage hormone replacement in men. Seldom are estrogen levels monitored to protect against estrogen overload that can occur when too much testosterone converts (aromatizes) into estrogen in an aging man’s body.41,42

An advantage with compounded testosterone is that if a physician knows how to write a prescription for it, they often have received training on follow-up monitoring. Compounded testosterone cream can be obtained for less than $30 a month, compared to the $348/month price for AndroGel®. Either form can contain the same amount of bioidentical testosterone.

Compounded testosterone cream is 91% less expensive than FDA-protected drugs, yet compounded testosterone is still twice as expensive as it needs to be because of governmental over-regulation.

In dealing with runaway health care costs, a solution is to make drugs like testosterone available to men over age 40 without the need of a doctor’s visit. There have been companies that have physicians review blood tests over the phone and prescribe testosterone, but FDA and state licensing boards have shut many of these down.43 Corrupt regulations ensure that efficiencies that would slash health care cost (at the expense of pharmaceutical profits) are outlawed.

Simple Solution to Avert Economic Ruination

Life Extension initiated a petition drive back in the 1980s to allow individual Americans to “opt-out” of the FDA’s regulatory umbrella. Our rationale was that this would provide consumers with more advanced treatments at lower prices.

Simple Solution to Avert Economic Ruination

Hundreds of our enlightened members petitioned, requesting liberation from the FDA stranglehold. The public, Congress, and media were apathetic at that time.

The FDA was far from lethargic. They responded to our petition in a way that resembled an angry hornet’s nest when disturbed (or how some dictators respond to street protestors). The notion that we dared challenge the FDA’s absolute authority resulted in years of legal battles in which the FDA did everything in its power to destroy us.44

Move forward to today, and the political climate has turned around. The health care cost crisis we long ago predicted has evolved into a harsh reality no one can ignore. It is mathematically impossible to solve it by forcing one group to pay regulated medicine’s inflated costs. The only salvation are the free-market reforms we long ago drafted.

Our proposal is quite simple. Amend the law to allow good manufacturing practice (GMP)-certified facilities to produce generic prescription drugs that do not undergo the excessive regulatory hurdles that force consumers to pay egregiously inflated prices.

To alert consumers when they are getting a generic whose manufacturing is not as heavily regulated as it is currently, the law would mandate that the label of these less-regulated generic drugs clearly states:

“This is not an FDA-approved manufactured generic drug and may be ineffective and potentially dangerous. This drug is NOT manufactured under the same standards required for an FDA-approved generic drug. Purchase this drug at your own risk.”

By allowing the sale of these less costly generics, consumers will have a choice as to what companies they choose to trust.

Equally important in our proposals is allowing consumers to be told about the off-label benefits of prescription drugs, such as the extensive body of evidence that metformin may help prevent type 2 diabetes45,46 (and not just treat it) and that metformin may also prevent and help treat certain cancers.47-54

A concern critics raise regarding this free market solution is safety. Who will protect consumers from poorly made generic drugs, they ask?

First of all, there will be the same regulation of these drugs as there are with GMP-certified supplement makers. FDA inspectors will visit facilities, take sample products, and assay to ensure potency of active ingredient and dissolution. Laboratories that fail to make products that meet label claims would face civil and criminal penalties from the government.

Pharmaceutical Company Propaganda

Secondly, there is no incentive not to provide the full potency of active ingredient in these less regulated generic drugs. The price of the active ingredients makes up such a small percentage of the overall cost that a manufacturer would be idiotic to scrimp on potency.55

Companies that foolishly make inferior generics will be viciously exposed by the media, along with the FDA, consumer protection groups, and even prescribing physicians, who will be suspicious if a drug is not working as it is supposed to.

Companies producing inferior products will be quickly driven from the marketplace as consumers who choose to purchase these lower-cost generics will seek out laboratories that have reputations for making flawless products.

Substandard companies would not only be castigated in the public’s eye, but face civil litigation from customers who bought the defective generics. When one considers that GMP-certified manufacturing plants can cost hundreds of millions to set up, a company would guarantee itself future insolvency if it failed to produce generic drugs that met minimum standards.

Pharmaceutical Company Propaganda

No matter how many facts show that free market generic drugs can be made safe, there are alarmists who believe that even if one person suffers a serious adverse event because of a lower-cost generic drug, then the law should not be amended to allow the sale of these less regulated products.

What few understand is that enabling lower-cost drugs to be sold might reduce the number of poorly made drugs. The reason is that prescription drug counterfeiting is a major issue today.56 Drugs are counterfeited because they are so expensive. Yet in the free market environment we espouse, a month’s supply of the popular cholesterol-lowering drug like simvastatin would sell for only $3. It is difficult to imagine anyone profiting by counterfeiting it. So amending the law to enable these super low-cost drugs to be sold might reduce the counterfeiting that exists right now.

Another reason these less regulated generics will do far more good than harm is that people who need them to live will be able to afford them. The media has reported on heart-wrenching stories of destitute people who are unable to pay for their prescription drugs. They either do without or take a less-than-optimal dose. The availability of these free-market generics will enable virtually anyone to be able to afford their medications.

Those who think generic drugs are safe today should be aware of isolated instances when improperly made active ingredients make it into prescription drugs sold in US pharmacies. These defective ingredients often emanate from FDA-approved manufacturers in China and India. The FDA gives false assurances that these government-approved laboratories are safe. The reality is that the FDA can only inspect each Chinese drug-making factory at best only once every 13 years.57 So the protection consumers think they have today is a facade. I would feel more comfortable buying generics from a company that had its own inspectors in offshore manufacturing facilities as opposed to relying on meaningless FDA rhetoric.

As this Article Was Being Finalized…

As this article was being finalized, news broke that the FDA had just granted an exclusive monopoly to a company to sell a non-patented progesterone drug that prevents premature births.58

Healthy women naturally secrete huge amounts of progesterone during pregnancy that helps maintain their uterine lining. To protect against premature births and miscarriages in women at risk, enlightened doctors have for decades prescribed progesterone medications that were made by state-licensed compounding pharmacies. The cost per injection was around $20.

By granting orphan drug status to one company (KV Pharma-ceutical), FDA rules banned all other forms of progesterone for this indication. The immediate impact was that the cost per injection skyrocketed to $1,500—or as much as $30,000 for a full-term pregnancy.59

An uprising over this price gouging forced the FDA to back down and state it “does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate.”

What the FDA is saying is that while it has the discretion to arrest compounding pharmacists for making this drug, it does not “intend to” do so. After the FDA made this announcement, KV Pharmaceutical reduced the price to $690 per injection—which is still more than 34 times its previous free market price.

It is unclear how private insurance and Medicaid will determine whether to pay $690 per injection for the version FDA rules state is the only one that can be legally sold or continue paying for the much lower-cost compounded version.

Women who are denied access to this drug because of the regulatory quagmire face increased risks they will deliver pre-term babies. In these cases, the costs for intensive neonatology care can run into the hundreds of thousands of dollars per premature-born baby, a price often borne by Medicaid or private insurance.

No country on earth can afford this kind of institutionalized corruption, where the chosen few pharmaceutical companies favored by the FDA reap extortionist profits as the nation collapses into a financial abyss. This rare instance in which public backlash forced the FDA to back away from protecting a pharmaceutical company’s obscene profit reveals that citizens have the power the save this country from financial Armageddon.

Fight Back Against This Institutional Corruption

The United States of America faces a health care cost crisis that will render Medicare, Medicaid, and many private insurance plans insolvent. The shocking details about this country’s inability to fund future medical costs are no longer confined to the pages of Life Extension Magazine®. You are reading about them virtually every day in the mainstream media.60,61

When terrorists attacked the United States in 2001, there were patriotic Americans who enlisted in the armed services. Many lost their limbs, their vision, and their lives.

No one has to engage in physical combat to save this country from the institutionalized inefficiencies and corruption that plague today’s disease-care system.

My new book Pharmocracy presents irrefutable logic to reform today’s broken health care system. The cover price for each copy of Pharmocracy is $24. Life Extension members obtain it at a 60% discount and pay only $9.60.

We are offering four copies of Pharmocracy to Life Extension members for only $32 (or $8 each). The reason we want you to purchase four copies is so you can send a copy to your Representative and two Senators.

We believe if enough citizens send Pharmocracy to Congress, that our leaders will be forced to recognize the obvious free-market solutions to today’s broken health care system.

To order one or four copies of Pharmocracy today call 1-800-544-4440.

For longer life,

For Longer Life

William Faloon


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