Drug prices are supposed to go down over time, as generic versions of innovative drugs are introduced to the market and drive prices down. So what’s behind the recent significant price increases for well established drugs, such as colchicine and quinine sulfate? Colchicine was used by the ancient Greeks and has a rich history of use in the United States, as exemplified by Benjamin Franklin’s use of the drug during the 1700s. Similarly, quinine sulfate was used extensively by U.S. soldiers during WWII to treat malaria in the South Pacific.  

So why has the price of these drugs risen recently from mere pennies to more than five dollars per pill?

The answer lies in a 2006 Compliance Policy Guide published by the Food and Drug Administration (FDA), announcing that the FDA would remove older, unapproved versions of so-called “grandfathered” drugs once the FDA approves just one manufacturer’s New Drug Application for the drug. Designed as an incentive to bring unapproved drugs into the FDA’s approval scheme, the FDA has successfully encouraged manufacturers to secure approval for a number of commonly prescribed drugs that historically lacked FDA “new drug” approval, including colchicine, quinine sulfate, hydrocodone and morphine.  

These drugs all share one common trait: until recently, they were marketed without first going through the FDA approval process, under the auspices of an exemption in the Federal Food Drug and Cosmetic Act for pre-1938 drugs. Colchicine and quinine sulfate are unique because of the manufacturer’s ability to benefit from market exclusivities built into the Act , which prevent the FDA from approving subsequent versions of the same drug for specified periods. For example, quinine sulfate was recently approved as an orphan drug and granted seven years of orphan exclusivity, even though the manufacturer did not conduct a single trial to prove it was safe and effective. The manufacturer of colchicine was similarly granted seven years of orphan exclusivity for Familial Mediterranean Fever and three years of data exclusivity for acute gout attacks.  

AGG has been working with industry, doctors and key policy leaders opposed to these immense market distortions, and has seen some movement by the FDA away from its original “winner-take-all” approach that would grant complete market exclusivity to just one manufacturer. When the cost of hydroxyprogesterone recently increased 16,000 percent, it attracted the attention of several members of Congress, and the FDA promptly announced that it would allow compounding pharmacies to continue supplying the drug. Colchicine has also received public scrutiny recently, with several members of Congress openly questioning the manufacturer’s pricing for the drug.  

The story is not yet finished. There are still many historic drugs marketed without FDA approval, and the wisdom of the FDA’s approach is still being debated. In the interim, expect further disruptions and price increases in the market as the FDA uses its enforcement muscle to remove older “grandfathered” products from the market.