THE FDA CAN BE DANGEROUS TO YOUR HEALTH DEREGULATION
(FORTUNE Magazine) – American medicine remains troubled. Costs continue to rise, and access remains unduly restricted for some people. One way the President and Congress could improve things would be to apply the principles of choice, competition, and deregulation to the markets for prescription drugs and medical devices. Today the Food and Drug Administration (FDA) simultaneously discourages the development of new products and increases their cost. Simply relaxing Washington's bureaucratic stranglehold over pharmaceuticals and devices would be good; reconsidering the role of the FDA itself would be even better.
Today the federal government must certify prescription drugs for both safety and efficacy before their sale. The latter requirement, passed after the thalidomide scare in 1962, is unnecessary--effectiveness is best tested in the marketplace-- and has greatly exacerbated the agency's natural bias against risk.
Product development has slowed as FDA power has expanded. Up through 1965, for example, the U.S. led Britain in the introduction of new drugs. Of 204 new drugs introduced in America between 1977 and 1987, however, 114 were sold first in Britain. By the early 1990s, total approval and development times ran 100% and 75%, respectively, higher in America than in other industrialized states. Of 150 new drugs and vaccines approved by the FDA between 1990 and 1994, 61% were available first overseas.
People suffer and die as a consequence of the FDA's dithering. Explains Robert Goldberg of Brandeis University: "By a conservative estimate, FDA delays in allowing U.S. marketing of drugs used safely and effectively elsewhere around the world have cost the lives of at least 200,000 Americans over the past 30 years." The agency's casualties include Alzheimer's patients denied access to the drug THA, long available in other nations; those with cardiac conditions, who waited years for FDA approval of beta-blockers; people suffering from kidney cancer, who were prevented from taking Interleukin-2; and AIDS patients, who died while the FDA decided whether drugs such as AZT were cost- effective.
Manufacturers of medical devices face similar regulatory barriers. Band-Aids, nuclear magnetic resonance machines, and more than 40,000 other products come under the purview of the FDA. During the 1980s and early 1990s, the FDA dawdled as huge application backlogs developed. The number of device approvals fell steadily from 1989 to 1992, before rebounding slightly in 1993. The number of so-called 510(k) applications, for the simplest products pending before the FDA for more than 90 days, rose from two to 713 between November 1991 and 1992. The average review time hit 200 days in 1993 and 216 in 1994, before dipping to 185 in early 1995. Approval times for more complex goods were running 823 days in 1994. Yet the FDA's response to criticism was to tighten its controls. Only after the 1994 election did the agency make a concerted effort to reduce approval backlogs. The ultimate victims again are patients.
FDA officials claim to have gotten religion. David Kessler, for instance, devoted virtually his entire speech to the Food and Drug Law Institute in December 1995 to extolling his agency's speedier decision-making processes. "This, I believe, is the model for reinventing government," he opined. Unfortunately, little fundamental has changed. As Joanna Siegel and Marc Roberts of Harvard explain: "The changes do not constitute basic reforms. They are instead departures for exceptional circumstances, carefully targeted to AIDS and other life- threatening illnesses." The overall system remains bureaucratic, costly, and time-consuming.
Congress should restrict FDA oversight to safety, leaving efficacy up to the marketplace, or allow firms to opt out of agency efficiency reviews with appropriate labeling. Evaluation of devices could be similarly liberalized. Another option, suggests Sam Kazman of the Competitive Enterprise Institute: "Change [the] FDA's veto power over new drugs to a system of certification. Let the agency continue to review safety and efficacy, but allow unapproved drugs, clearly labeled as such, to be available by prescription." Patients, doctors, hospitals, and insurers could choose to rely on FDA approval, foreign certification, industry recommendation, or private sanction.
For years American firms have led the world in the discovery and marketing of new medical treatments despite stultifying regulation. But so much more could be accomplished if the federal government removed its roadblocks to the development, testing, and marketing of new drugs and devices.
DOUG BANDOW is a Senior Fellow at the Cato Institute.This article was adapted from a forthcoming study for the Institute for Policy Innovation.