Hoover Daily Report

Americans Are Dying for FDA Reform

Monday, April 9, 2001

New medicines are the most cost-effective means of treating disease. Increasingly, they will replace more expensive and invasive medical treatments and, therefore, can reduce overall health care costs. But the regulation of new drugs is a shambles. Drug regulation, a monopoly of the federal Food and Drug Administration (FDA), has become overkill and actually threatens public health. Regulation by the FDA is slow, bureaucratic, and expensive, and drug development in this country is more lengthy and expensive than anywhere in the world. Bringing a single drug to market requires, on average, 12–15 years and upward of $400 million.

Americans are, literally, dying for fundamental reform of drug regulation. It can be done. We can remove the monopoly over regulation, introduce competition, and alter the existing distorted incentives to regulators that slow drug development and make it expensive. A reformed drug review system can retain the legal requirement for premarket demonstration of new drugs’ safety and effectiveness, the FDA’s final sign-off authority for product marketing, and the agency’s responsibility for overarching safety issues. Thereby, we can maintain existing standards of product purity, potency, and quality.

The change would be that day-to-day oversight of drug testing and review of the application for marketing approval would be performed by nongovernmental, FDA-certified entities. The FDA thereby becomes primarily a certifier of certifiers, rather than a certifier of products. Delegating a significant portion of the oversight responsibility to these nongovernmental certifiers will generate competition among the certifiers for drug companies’ business and create pressure for greater efficiency in the oversight process.

Although we tend to take government regulatory monopolies for granted, they are not sacrosanct. Nongovernmental, nonmonopolistic regulation of consumer products operates efficiently and safely in the United States and abroad. Nationally Recognized Testing Laboratories, the prototype of which is Underwriters Laboratories, certify more than 16,000 categories of consumer products, many of which, such as electrical equipment and fire-resistant building materials, present potential hazards.

Another example is the regulation of medical devices in the European Union (EU), which relies heavily on various sets of product standards and does not involve government regulators directly in product oversight. For low-risk devices, such as tongue depressors, manufacturers are allowed to certify that their products meet the necessary standards. For higher-risk devices, manufacturers must obtain third-party reviews from private sector “notified bodies,” which test products, inspect manufacturing systems, and verify that EU standards have been met. Following this certification, the products can be marketed. Because these notified bodies vie with one another for business, they have reason to be expeditious but thorough. As a result, approval of new medical devices in Europe takes only half as long as in the United States, shortening the development process by roughly two years without compromising safety.

FDA reform that introduces incentives to get safe, effective drugs to patients can transform the drug development process and reverse the current upward spiral of increasing time and costs. The public will benefit directly by earlier access to greater numbers of less costly drugs and indirectly by greater robustness and productivity in the pharmaceutical industry.