HHS Moves to Terminate FDA Unapproved Drugs Initiative

HHS is sidestepping FDA to terminate the agency’s unapproved drug initiative (UDI) as part of the Trump administration’s efforts to reduce prescription drug costs. UDI is an FDA program launched through guidance documents issued in 2006 and 2011. The program aimed to legalize marketed drugs that lack FDA approvals. An unintended consequence was the potential for market exclusivity for manufacturers that took previously unapproved drugs through the FDA approval process.

Earlier this year, a report from healthcare performance improvement consultants Vizient said UDI would increase healthcare spending by $20.25 billion. In its analysis, Vizient said UDI is an FDA mandate that unapproved drugs that have been in use prior to agency review of safety and efficacy must be approved or removed from the market. The goal of UDI, Vizient says, is to (1) remove potentially unsafe medications to protect the public from direct and indirect health threats, and (2) remove ineffective drugs to protect the public from using the products in lieu of effective treatments.

So far, four of the drugs have been formally approved in recent years — neostigmine methylsulfate, selenium 40 mcg/mL to selenious acid 60 mcg/mL, Vasopressin to Vasostrict, and dehydrated alcohol 98% to dehydrated alcohol 99%. Vizient says that the products have experienced price increases following approval ranging from 525% to 1,644%. The company says it has identified 19 other unapproved products on the market that could experience similar increases, potentially leading to $8.75 billion in added healthcare system costs over five years if manufacturers take similar price increases during their periods of market exclusivity.

HHS says in a notice that it believes terminating the program will prevent actors from using FDA rules to enjoy artificial monopolies over older drugs that are important to the health of Americans. “This action will protect Americans from future drug price spikes and shortages.”