Competitive Enterprise Institute | 1899 L ST NW Floor 12, Washington, DC 20036 | Phone: 202-331-1010 | Fax: 202-331-0640
The FDA is the nation's most ubiquitous regulatory agency. It oversees products that account for 25 cents of every consumer dollar, with a value of over a trillion dollars annually—and it's in turmoil.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
First the agency was blindsided by Chiron Corporation's inability to provide flu vaccine this season due to contamination at its manufacturing facility, depriving Americans of half the usual supply. Then came Merck's withdrawal from the market of its blockbuster anti-inflammatory drug, Vioxx, because of cardiovascular and cerebrovascular side effects. This led one of FDA's medical officers, in congressional testimony last week, to accuse his own colleagues of discounting recommendations from the agency's safety researchers, and of consistently being in denial when data indicates safety problems from an approved drug.
The FDA is a favorite target of critics, who variously accuse regulators of excessive risk-aversion and delay of approvals, or of too cozy a relationship with the drug industry. Former FDA Commissioner Frank E. Young once characterized his agency as "a slow-moving target that bleeds profusely when hit."
Sen. Charles E. Grassley, chairman of the Senate Finance Committee, which held hearings last week, chided the agency, "The health and safety of the public must be the FDA's first and only concern." He is right, but particularly when governmental pre-marketing approval of a product is required, greater safety is not synonymous with more stringent regulation. In fact, net benefit to patients often suffers because of an obscure regulatory anomaly: the asymmetry of outcomes from the two types of mistakes that regulators can make. A regulator can commit an error by permitting something bad to happen (approving a harmful product), or by preventing something good from becoming available (not approving a beneficial product). Both outcomes are bad for the public, but the consequences for the regulator are very different.
The first kind of error is highly visible, causing the regulators to be attacked by the media and patient groups, and to be investigated by Congress. But the second kind of error—keeping a potentially important product out of consumers' hands—is usually a non-event, eliciting little attention, let alone outrage. Former FDA Commissioner Alexander Schmidt aptly summarized the regulator's conundrum: "In all our FDA history, we are unable to find a single instance where a Congressional committee investigated the failure of FDA to approve a new drug. But the times when hearings have been held to criticize our approval of a new drug have been so frequent that we have not been able to count them. The message to FDA staff could not be clearer."
As a result, regulators make decisions defensively, so they tend to delay or reject new products of all sorts, from fat substitutes to vaccines and painkillers. That's bad for public health and for consumers' freedom to choose. Congressional oversight is supposed to provide a check on regulators' performance, but rarely does it focus on their unnecessarily delaying product approvals. After all, a premature or mistaken approval makes for more exciting hearings, with injured patients and their families paraded before the cameras. Even when regulators' inappropriate delays are exposed, they can fall back on the "erring on the side of caution, better safe than sorry" defense. Too often, legislators, the media, and the public accept these euphemisms uncritically, making our system of pharmaceutical oversight progressively less accountable and less relevant to the public interest.
If we are to balance drug safety, innovation in R&D, and the availability and price of new medicines, we must find a way to make regulators accountable for costly errors of all kinds. One way would be to create a vigorous, independent agency ombudsman that could compel regulators to act in the public interest. The office would have to possess the following attributes: (1) independence from the agency and the FDA commissioner; (2) access to independent expertise in relevant disciplines, including medicine, pharmacology, science, regulation, and law; and (3) the power to levy sanctions against FDA employees found to be responsible, individually or collectively, for flawed decisions or policies that constitute severe, avoidable errors.
Americans are, literally, dying for regulatory reform. It's past time they got it.