The colchicine case is an interesting one if you dig down into the details.<p>Colchicine has been used for hundreds (?) of years. It never went through phase 3 trials and it was never officially approved by the FDA. Instead it was grandfathered in.<p>This made the FDA pretty uncomfortable [1] and I can't blame them. How do you properly regulate a drug where there is little to no data outlining it's efficacy and safety? So, the FDA decide to dangle a carrot in front of drug developers. If you formally take a grandfathered drug through the approval process, you will be awarded with something call "data exclusivity" (it's not a patent). For a period of 3 or 5 years (it depends on the filing), the FDA will not approve another form of the drug. In addition, they will tell/force all the other grandfathered manufacturers to stop selling their versions.<p>Statement from the FDA: <i>Colcrys is the only FDA-approved single-ingredient oral colchicine product available on the U.S. market. Approved by the FDA in 2009, Colcrys’ prescribing information contains important safety data and recommendations on drug interactions and dosing not available with unapproved products.</i>[2]<p>Of course this is a pretty attractive carrot for a drug company. Spend $X now and you've got a captive market where you can recoup your R&D spend and make a profit over 5 years. Plus <i>the heavy hand of the FDA will help you get rid of competitors!</i>.<p>Due to the the FDA regulatory process, it shouldn't be surprising that the cost of colchicine went up, it's pretty much had to in order to pay for the FDA approval. Did it have to go up 5000%? No, probably not. But it did have to go up if the FDA wanted an approved version since producing a grandfathered, unapproved drug is pretty cheap compared to an FDA approved one. What made the colchicine case particularly unfair was that the company didn't actually run any trials. They just collected all the trial data that already existed (mostly published papers) and submitted that data.<p>Another great example is Mr. Mucus, the cold medicine, it was the exact same play. In fact, a VC firm backed the entire process. The got the active ingredient approved by the FDA (again, it had been grandfathered in) and the FDA forced all other competitors off the market. This blog post has all the details [3]. Suffice to say, Aisling Capital made a 15x return off that investment. And that's why you see Mr. Mucus ads all over the place.<p>[1]<a href="http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/EnforcementActivitiesbyFDA/SelectedEnforcementActionsonUnapprovedDrugs/ucm119899.pdf" rel="nofollow">http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulat...</a><p>[2]<a href="http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm227796.htm" rel="nofollow">http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/uc...</a>
[3]<a href="http://biotechtranslated.com/2011/08/09/how-to-make-the-fda-your-friend/" rel="nofollow">http://biotechtranslated.com/2011/08/09/how-to-make-the-fda-...</a>