« Tom Palmer on positive and negative liberty | Main | How progressive is the American budget? »
FDA payola?
The FDA will soon stipulate that researchers who accept more than $50,000 in corporate grants, contracts and consulting fees cannot sit on FDA advisory committees. This will rule out many current advisors.
First, I wonder how this fits into the old Sam Peltzmann story that the FDA is too conservative in approving new drugs.
Second, what if we reformed in the opposite direction? Why not do away with all the mandatory drug trials and the like, and simply let drug companies purchase approval for new drugs? Think of the companies as posting bonds, and of course they still can be sued ex post if the drug harms somebody. The companies still will have reason to conduct their own tests. Set the price high if you wish.
To be sure, how much a company will pay for approval will depend on expected profits, not social welfare. But even with market power there is usually some connection between those two magnitudes. Or maybe the fear of lawsuits won't deter poorly capitalized companies, but at the very least we could let the corporate giants take this path.
Some companies might be too overconfident about their drugs. If you believe that, I hope you are buying puts on them. Other companies might have excessively short time horizons. If you believe that, I hope you are loading up on drug companies with heavy R&D and raking in your excess returns.
So does this idea have any takers? If not, why not?
Addendum: Matt Yglesias argues regulation is a substitute for litigation.
Posted by Tyler Cowen on March 23, 2007 at 07:25 AM in Medicine | Permalink
Comments
We rely on government approval of medicines because it is nearly impossible for individuals singly to judge the effectiveness or long-term risks of taking a drug. Sure, if a thousand people died in a month after taking ViagCialOxyStatin then the victims’ estates might file a class action against the manufacturer, the press could pick up the story, and the transgressor would be appropriately punished. However you'd also end up with thousands of patent medications of diluted water and food coloring with tons of marketing and no benefit at all.
We pay our government to regulate medicines because we believe that they can qualify and hire scientists who are adept at reviewing the effectiveness and cost/benefit of new drugs better than we can ourselves. Allowing a free market would be akin to getting rid of the requirement for individuals to obtain a driver's license -- the logic is parallel.
On the other hand, the trust that the public has placed in the government to qualify and hire scientists has been breached by examples of manipulation of drug testing results and secretive approval processes. In this case we'd be better served by opening up the operations by which we hire and qualify the government inspectors, and by providing thorough and complete transparency to the clinical-trial testing and approval processes.
-- Jeff
Posted by: Jeff Chapman at Mar 23, 2007 8:25:55 AM
what do you think about iglesias's contention that there's a tradeoff between litigation and regulation, and if libertarians less of the latter, they'll necessarily get more of the former?
Posted by: jason voorhees at Mar 23, 2007 8:47:26 AM
Litigation does replace regulation. Either regulate and pass tort reform, or deregulate and let the court's punish companies that cheat.
I favor a two tiered approach. We need something like underwriters labratory and consumer reports as an independent drug agency. It can be funded by a small tax on medicines. Drugs must get approval from at least this body. The other path (and a company could do both) is to go before the FDA. The FDA will take longer, but once approved the company has zero legal liability (assuming they did not decieve the FDA) and anyone harmed by an FDA approved drug must accept a standard government payout.
Posted by: Matt at Mar 23, 2007 8:58:55 AM
Someone who gets paid $100,000 by Pfizer is not necessarily more likely to approve the drugs of Pfizer competitors. Prisoner's dilemma?
Posted by: Carl Shulman at Mar 23, 2007 9:04:02 AM
I'll go for this. Frankly I think the FDA is silly: let the people take whatever drugs they want, just make sure that manufacturers aren't lying about what chemicals they are selling. The flat fee for approval can cover those oversight costs.
Of course, many more early adopters will get killed/harmed if this is done. But no one is forcing you to be an early adopter, and the rest of us get the benefit of more drug testing for free.
Better get rid of public health care before you try that, though.
Posted by: Brandon Thomson at Mar 23, 2007 9:14:11 AM
Jeff Chapman seems to believe the current drug regulation system is like "the requirement for individuals to obtain a driver's license." This might be true if drug manufacturers were only required to pass a test on drug laws and undergo an onsite inspection of facilities and procedures, but this describes only the first 1% of the regulatory process.
To extend the analogy, if people seeking a driver's license had to undergo a regulatory process similar to drugs, the following would be a few of the steps:
1) Licenses would be issued only for specific routes of travel, using a specific vehicle, and for a specific reason. For example, the driver would decide he would apply for permission to drive his Ford pickup from his house to the Interstate and to his office at 8:00 am, and back at 5:00 pm, every work day for the purposes of going to his job.
2) The FDA (Ford +other vehicles Driving Agency) would require that the driver certify that his vehicle is safe. It will be helpful when Ford etc. provides testing and evidence of safety, but the driver would still be required by the FDA to do expensive additional testing.
3) Recognizing that some types of vehicles had been on the road for many years, and to provide a less expensive alternative, the FDA would allow 'generic' vehicles to be used. But if the driver wanted to change the color, radio, or godforbid, put on fancy chrome wheels, the FDA would require new testing. This would be true even if the alteration improved safety (e.g., airbags), so many 'generics' would remain creaky, smoky rattletraps without seatbelts because it would cost too much to test the improvements.
4) Once the vehicle, at great cost, was certified as safe, the driver would have to prove the reason for driving (the Indication) was appropriate. Many dollars and much time would be spent proving to the FDA that the driver did, in fact, intend to go to work and that the vehicle and route was effective in getting her there.
5) The driver would also be advised to figure out what other possible Indications he would need, such as shopping or picking up the kids. After approval, the driver could only use the vehicle for a different Indication if a medical professional ordered it, and the driver would not be allowed to tell that medical professional about the new Indication without being fined.
6) After approval, the driver would have to keep copious and complete records about everything related to driving. If she decided to use mid-grade gas instead of regular, she would have to file an amendment with the FDA. If her usual route had construction, she would have to apply to use a different street. If she wanted to go in and leave earlier, she would have to get permission. If she changed jobs... you get the idea.
Posted by: SteveSC at Mar 23, 2007 9:24:02 AM
Right now we seem to have the worst of both worlds - regulation plus litigation. The FDA approval process is slow and very expensive - it can cost over $100 million to bring a new drug to market. Then, if there are adverse results, the companies still get sued. Why should we care? Well, we, the consumers, are the ones who ultimately get stuck with the bills. It's a major reason for the high cost of drugs in this country. Personally, I don't have much use for either trial lawyers or bureaucrats, but, if forced to pick, I'd choose the latter. The FDA is a huge, risk-averse bureaucracy, because patients who suffer horrible side effects from an FDA-approved medication make it into the headlines, while patients who suffer or die because the FDA won't approve their needed medications do not.
I would slim down the FDA and speed up the approval process but then grant tort immunity to companies for drugs that get FDA approval. But if the companies lie, cheat or fudge data during the approval process, the immunity is removed and the tort lawyers can have at them. This would give the drug companies strong incentive to play by the rules.
Posted by: Ned at Mar 23, 2007 9:33:09 AM
I agree that there is too much FDA scrutiny for most drugs, and we would be better off with a less-stringent testing system, but having no FDA would have some side effects that some may not have considered.
A less-stringent approval process would help the smaller drug companies develop new drugs. With (a properly stringent) FDA approval, more people are willing to buy a drug from a smaller company. Without any FDA approval, few would be willing to buy a new drug from a small company, because there would be few assets to obtain if the drug were deleterious. The big companies would be able to sell drugs, but would face reduced competition from the fringe.
Also, we would need to rewrite our medical records protection laws. Properly correlating dangerous-but-rare side effects would be nearly impossible under today's HIPAA rules.
Having said the above, most of us would agree that government tends to grow suggesting that the FDA's stringency would tend to grow over time, meaning that we would never be at the optimal level of stringency, so no FDA may still be the best alternative.
Posted by: Craig at Mar 23, 2007 9:58:45 AM
Important early hurdles to new drugs are clinical trials, which are staged. Fall at an early fence and that is that. Further, the FDA places the bar very high--patients who are sickest, and who have progressed furthest, must be helped by the new therapy or it won't be approved. Yet in a world of increasingly individualized and targeted medecine, something effective at an early stage, a desirable and cost effective new tool, could be screened out by the FDA.
Expertise and information are at the heart of the problem. The FDA hires agents--medical experts--to judge the research of other medical experts. Patients are supposed to know too little to be allowed input. In fact, in the case of clinical trials there is very often a sub-population of patients who know a great deal about the risks and benefits of a therapy, they have an incentive to do so, after all.
So let me make modest proposal for an improvement in the clinical trials process. The FDA judges an early stage trial to have failed if it doesn't help enough people (for example, Genasense, a cancer therapy, was almost killed-off after a stage I trial because "the data showed a 10 percent benefit. More simply put, one in 10 patients who received it had real improvement and often a very significant remission. For the FDA, this was not significant because they saw too many others who didn’t get much benefit and thought the expense wasn’t worth it.." (quote from Andrew Schorr at HealthTalk). Of course, although the FDA didn't like the drug, my guess is that any patient among the 10% helped was pretty happy with it. As it happens, patient driven complaints may have helped to have this case reconsidered.
What if there was a patient driven escape clause in clinical trials as a matter of course? If an FDA approved trial at an early stage failed to pass the agreed bar, what if the drug company got one shot at the next stage if they could round up enough informed patients to participate? Their willingness would itself be a test. This could also require participation by one academic medical center. Such a trial would, at least, collect more data, it would be consumer driven, it might actually help a very sick person or two, and have the effect of taking the FDA out of the hot seat.
Posted by: Roland at Mar 23, 2007 10:25:54 AM
"We pay our government to regulate medicines because we believe that they can qualify and hire scientists who are adept at reviewing the effectiveness and cost/benefit of new drugs better than we can ourselves." NO, we don't. With all due respect, Mr. Chapman, you cannot begin to imagine how frustrating and dehumanizing it is to live with an illness have that decision taken out of your hands. Risk/benefit tradeoffs are unique to the individual. No FDA advisor has ever walked a mile in my shoes, much less the last 20 years. They simply cannot make that decision better than we can ourselves.
Posted by: LisaMarie at Mar 23, 2007 11:40:55 AM
"We pay our government to regulate medicines because we believe that they can qualify and hire scientists who are adept at reviewing the effectiveness and cost/benefit of new drugs better than we can ourselves."
NO, we don't. With all due respect, Mr. Chapman, you cannot begin to imagine how frustrating and dehumanizing it is to live with an illness and have your most important decisions taken out of your hands. Risk/benefit tradeoffs are unique to the individual. No FDA advisor has ever walked a mile in my shoes, much less the last 20 years. They simply cannot make that decision better than we can ourselves.
Posted by: LisaMarie at Mar 23, 2007 11:42:27 AM
Ok, ignoring the attempt to destroy the idea of expertise as relevent (you need to know exactly my situation before you can decide if I should take Asparin or Actiq)...
several problems:
1)In order to win damages with a tort, you need to show causation. With sick people taking a drug, with no studies showing what the effect of the drug is (those studies are mandated by the now impotent FDA...), how the heck could you win a suit?
2) Information assymatry market failure. Drug companies know what their drugs do better then patients, or even doctors.
3) Prevention is valuable, but it's true worth is really, really discounted by the market. Another market failure regulation needs to deal with.
Posted by: Dan at Mar 23, 2007 12:38:36 PM
Expertise is relevant to give advice; not to make another person's decisions for them. If I'm the expert, should whether you need aspirin or Actiq be determined by my fears that you will become a fentanyl addict, or your level of pain and your personal belief about whether the risk is acceptable? As for the information asymmetry, information is a good like any other, and markets will provide the information people demand. The FDA doesn't provid certainty or complete information. If anything, it gives people a false sense of security.
Posted by: LisaMarie at Mar 23, 2007 3:51:34 PM
I don't think that elimination of the FDA has much merit.
The FDA serves as a benchmark seal of approval, relaxing the standards will only cheapen US health care and pharmaceutical development.
Big Pharma could set up companies in bannana republics to sell drugs without FDA approval. I think that few individuals would go for these nonlicensed therapies. Eliminating the FDA standards would reduce the pharmaceutical company products to the same level as herbal and traditional medicines. Some in this plethora of treatments may work as claimed, however in the absence of hard science and testing who do you believe.
I think that the best reform for reducing pharmaceutical costs would be to establish a worldwide pharmaceutical testing standards that are globally accepted.
Currently drugs approved in Europe or japan must be go through phase1-3 studies for approval in the US, basically repeating the same expensive trials conducted in other countries. Small companies that might be able to generate funds for drug trials in the US are often forced to partner up with major pharmaceutical companies to conduct trials in europe, japan, or elsewhere.
The pharmaceutical companies are operating in a global market. The US is currently only a fraction of this market. A drug approval process that is globally recognized would significantly increase the value of any drug that recieved approval.
Posted by: CB at Mar 23, 2007 4:18:01 PM
Shavell has the classic piece on this talking about ex ante regulation versus ex post litigation as substitutes. Kolstad and Ulen have a piece on this in AER 10 or 15 years ago, arguing that litigation and regulation both substitutes and complements.
Posted by: david at Mar 23, 2007 4:35:26 PM
In terms of elimiating the information asymmetry, one somewhat promising idea that I've heard of is a research registry.
If you want to have your data published post-trial, you must register your research project pre-trial. This eliminates the burying of 'inconvenient' data. (It does not, however, guarantee the elimination of data fudging to produce better results.)
Though I'm not sure if these registries are currently in use, it would allow for the individual to be able to sift the data themselves and roll the dice as they see fit. Without house-skewed odds.
Posted by: kevin at Mar 23, 2007 11:20:35 PM
Some people here are making a common error about new drugs and clinical trials. The problem is - and I speak, unfortunately, from experience here - is that we don't actually know all the things that might happen when a new compound reaches the market. Clinical trials will uncover the largest sets of side effects (or they should!), but no trial can mimic what will happen in the real world. The difference is the diversity of patients out there - and more importantly, their sheer number.
Never forget this: the people at every single drug company hold their collective breath when a new compound goes into animal toxicity testing. And again when it goes into phase I, and phase II, and again in phase III. And they hold it again when the compound hits the market. It's quite a business to be in, let me tell you.
Posted by: Derek Lowe at Mar 24, 2007 9:08:01 AM
I think Derek Lowe hit the nail on the head. The FDA cannot magically eliminate information asymmetry simply because it does not possess the required information- no one does. The stamp of FDA approval makes people think that a drug must be safe, and that nothing bad can happen to them if they take it. Nothing could be further from the truth. The only way to know a drug's effects is to have people try it. The only way to "protect" yourself from a drug's risks is never to take it at all. No regulation is going to change that.
Posted by: LisaMarie at Mar 24, 2007 11:54:06 AM
If the FDA will me make it alright for companies to buy their drug into the market, then the reputation of the FDA will be scrutinized because the american public is led to believe that the drugs that the FDA approves are safe. There will be no reason for a companie that wants to make a drug that everyone would want with little testing, put it on the market, receive the profits and disappear.
Posted by: neil henry at Mar 26, 2007 12:17:30 PM
liqingchao 07年8月17日
google排名
google排名
wow gold
wow gold
powerleveling
powerleveling
wow gold
wow gold
powerleveling
powerleveling
wow powerleveling
wow powerleveling
wow power leveling
wow power leveling
wow power level
wow power level
world of warcraft powerleveling
world of warcraft powerleveling
world of warcraft power leveling
world of warcraft power leveling
china tour
china tour
hongkong hotel
hongkong hotel
beijing tour
beijing tour
翻译公司
翻译公司
上海翻译公司
上海翻译公司
北京翻译公司
北京翻译公司
北京搬家公司
北京搬家公司
鼓风机
风机
风机
货架
光盘刻录
光盘刻录
光盘制作
光盘制作
光盘印刷
光盘印刷
红外测温仪
红外测温仪
超声波测厚仪
超声波测厚仪
超声波探伤仪
超声波探伤仪
频闪仪
频闪仪
涂层测厚仪
涂层测厚仪
电火花检测仪
电火花检测仪
google排名
仓库
仓库
仓库出租
仓库出租
物流园区
物流园区
集团电话
集团电话
四环素牙
口腔常识
口腔常识
口腔医生
口腔医生
网站设计
网站设计
多媒体
监控
监控
监控系统
监控系统
门禁
门禁
门禁系统
门禁系统
搬家公司
搬家公司
条码打印机
条码打印机
牙周炎
牙周炎
Posted by: wslmwps at Aug 16, 2007 11:18:49 PM
大阪 風俗--大阪風俗店中心の関西風俗情報紹介サイト
風俗 大阪--大阪風俗店中心の関西風俗情報紹介サイト
大阪風俗情報--大阪風俗店中心の関西風俗情報紹介サイト
風俗情報 大阪--大阪風俗店中心の関西風俗情報紹介サイト
大阪 風俗店--大阪風俗店中心の関西風俗情報紹介サイト
風俗店 大阪--大阪風俗店中心の関西風俗情報紹介サイト
大阪風俗案内--大阪風俗店中心の関西風俗情報紹介サイト
風俗案内 大阪--大阪風俗店中心の関西風俗情報紹介サイト
東京 風俗--東京風俗デリヘル・ホテヘル中心の関東風俗情報サイト
風俗 東京--東京風俗デリヘル・ホテヘル中心の関東風俗情報サイト
東京風俗情報--東京風俗デリヘル・ホテヘル中心の関東風俗情報サイト
風俗情報 東京--東京風俗デリヘル・ホテヘル中心の関東風俗情報サイト
東京 風俗店--東京風俗デリヘル・ホテヘル中心の関東風俗店情報サイト
風俗店 東京--東京風俗デリヘル・ホテヘル中心の関東風俗店情報サイト
横浜 風俗--神奈川風俗デリヘル・ホテヘル中心の関東風俗情報サイト／横浜・川崎・相模原・平塚・伊勢原エリア等の風俗情報
風俗 横浜--神奈川風俗デリヘル・ホテヘル中心の関東風俗情報サイト／横浜・川崎・相模原・平塚・伊勢原エリア等の風俗情報
横浜風俗情報--神奈川風俗デリヘル・ホテヘル中心の関東風俗情報サイト／横浜・川崎・相模原・平塚・伊勢原エリア等の風俗情報
風俗情報 横浜--神奈川風俗デリヘル・ホテヘル中心の関東風俗情報サイト／横浜・川崎・相模原・平塚・伊勢原エリア等の風俗情報
横浜 風俗店----神奈川風俗デリヘル・ホテヘル中心の関東風俗情報サイト／横浜・川崎・相模原・平塚・伊勢原エリア等の風俗情報
風俗店 横浜----神奈川風俗デリヘル・ホテヘル中心の関東風俗情報サイト／横浜・川崎・相模原・平塚・伊勢原エリア等の風俗情報
渋谷 風俗--渋谷デリヘル、ホテヘルなど渋谷風俗情報ページ
風俗 渋谷--渋谷デリヘル、ホテヘルなど渋谷風俗情報ページ
渋谷 風俗店--渋谷デリヘル、ホテヘルなど渋谷風俗店情報ページ
風俗店 渋谷--渋谷デリヘル、ホテヘルなど渋谷風俗店情報ページ
渋谷 風俗情報--渋谷デリヘル、ホテヘルなど渋谷風俗情報ページ
風俗情報 渋谷--渋谷デリヘル、ホテヘルなど渋谷風俗情報ページ
池袋 風俗--豊島区・池袋のデリヘル、ホテヘルなど豊島区・池袋風俗情報ページ
風俗 池袋--豊島区・池袋のデリヘル、ホテヘルなど豊島区・池袋風俗情報ページ
池袋 風俗情報--豊島区・池袋のデリヘル、ホテヘルなど豊島区・池袋風俗情報ページ
風俗情報 池袋--豊島区・池袋のデリヘル、ホテヘルなど豊島区・池袋風俗情報ページ
池袋 風俗店--豊島区・池袋のデリヘル、ホテヘルなど豊島区・池袋風俗情報ページ
風俗店 池袋--豊島区・池袋のデリヘル、ホテヘルなど豊島区・池袋風俗情報ページ
風俗 新宿--新宿風俗デリヘル・ホテヘル中心の関東風俗情報サイト／新宿エリア等の風俗情報
新宿 風俗--新宿風俗デリヘル・ホテヘル中心の関東風俗情報サイト／新宿エリア等の風俗情報
新宿風俗情報--新宿風俗デリヘル・ホテヘル中心の関東風俗情報サイト／新宿エリア等の風俗情報
風俗情報 新宿--新宿風俗デリヘル・ホテヘル中心の関東風俗情報サイト／新宿エリア等の風俗情報
新宿 風俗店--新宿風俗デリヘル・ホテヘル中心の関東風俗情報サイト／新宿エリア等の風俗情報
風俗店 新宿--新宿風俗デリヘル・ホテヘル中心の関東風俗情報サイト／新宿エリア等の風俗情報
表札--表札・マンション表札・オリジナル表札・手書き表札・店舗看板の製作販売の通販サイト
表札オーダーメイド--オーダーメイド表札の製作と販売
銘板--銘板の製作と販売
特注表札--特注表札の製作と販売
手作り表札--手作り表札の製作と販売
表札マンション--マンション用表札の製作と販売
表札ステンレス--ステンレス表札の製作と販売
断熱塗料--塗るだけで断熱効果・防音効果・結露を抑制できる断熱塗料GAINA（ガイナ）
uguisu--うぐいす
php--php manual
アダルトレンタルサーバー--アダルト、風俗店専用レンタルサーバー
アダルトレンタルサーバー--アダルト、風俗店専用レンタルサーバー
Posted by: Mike at Sep 24, 2007 5:42:24 AM
大家好，我是臺灣人，從臺灣一個人搬家來到美國，環境很陌生，感覺很孤單。以前在臺灣幾家知名的徵信社工作過，我是一個優秀的徵信工作者，希望早點找到適合自己的工作。希望通過貴站，認識更多的朋友。
Posted by: 謝文豪 at Apr 1, 2008 11:12:02 PM
Posted by: masinn at Dec 20, 2008 5:20:13 AM
Please come to cheap linden, we will give you a great surprise.
Posted by: buy lindens at Dec 31, 2008 3:42:35 AM
