Is The FDA Helping Or Hindering Medical Innovation?

from the well,-that's-obvious... dept

Every time we talk about drug patents and the healthcare industry, without fail, someone shows up in the comments and makes the same simplistic claim: "you have no idea how much it costs to bring drugs to market!!!" Of course, that's arguing a slightly different issue, and it's important to break down what's being discussed. First of all, there's the question of how much does it really cost to bring medical innovation to market. There's a great book from a few years ago, called The $800 Million Pill, by Merrill Goozner, which debunks many of the claims about how much it really costs to bring a drug to market, which we noted recently has been updated in recent studies. What you realize is that (surprise, surprise) the pharma industry vastly exaggerates what it really takes to bring a drug to market. That's not to say it's cheap. It's not. But it may be an order of magnitude lower, and that makes a big difference. On top of that, a large percentage of the actual research budget comes from universities and is funded by the government anyway.

But... the defenders respond, the big expense isn't always research, it's clinical testing. And, in many cases that's true. Clinical testing is quite expensive. But why is it so expensive? That's another area worth exploring, and you begin to discover all sorts of issues that suggest this is a case where government regulation can often do more harm than good. David Levine points us to an excellent piece by Carl Schramm at Forbes pointing out how the ridiculous level of controls by the FDA aren't just making this process crazy expensive, but it's also limiting medical and healthcare innovation. And for what benefit? Obviously, the initial response many have to this is that the FDA and massive expensive clinical testing is necessary to protect people from dangerous drugs. But there are serious questions about how effective the FDA actually is in doing that. The clinical testing process often focuses too much on performance against a placebo, and not one whether or not people actually get healthier. On top of that, we've see that the FDA often seems to focus on helping pharmaceutical companies, rather than helping keep people healthy.

Schramm points out that the way to drive innovation is through "messy" capitalism, where lots more players get to test a lot more things -- the exact opposite of what the expensive FDA process entails. And while the obvious retort is that this will create much more dangerous drugs, it's not clear that's necessarily the case:
In any industry within a free-market society, the innovative process works best when it is allowed to be "messy." Lots of people are constantly trying new things, starting new companies and subjecting them to the test of the marketplace. From the cauldron of this market testing a higher order emerges, and the march of progress ensues.

And so it was in the early days of the pharmaceutical industry. Before FDA control, which took hold in the years after the Pure Food and Drug Act of 1906, the market was largely without barriers. A pharmacist might bring forth Bromo-Seltzer, or Noxzema, or Coca-Cola, or little liver pills or laudanum. Market forces would then determine if the product had value. Only tort liability acted as a check on the manufacturer, and, interestingly, there were few lawsuits.

Although extravagant claims were often made for "patent" medicines, the consumer was presumed to have common sense and to undertake some risk in all things. It was also presumed that manufacturers would follow high standards if they wished to stay in business, and indeed many firms and products from that era are still with us today. The Smith Brothers were trusted to make cough drops in a clean factory with good ingredients. Johnson & Johnson became a trusted name -- as did Eli Lilly.
Again, there are obvious problems with the way things were done a century ago. It doesn't mean we need to go back to that entirely, but at some point it should be realized that perhaps we're losing out on the cost side of the cost-benefit equation. Obviously, those making medical products have every incentive to have those products actually work. Rather than saddling them with massive clinical testing regimes, why not focus on transparency, that would provide more data and opportunities for everyone to properly evaluate the effectiveness and risks of certain products? As it stands now, the data from most clinical trials is totally hidden away. Imagine a much more open process that would allow people to access the data, share their own data and determine what really is and is not safe.

Andy Kessler's excellent book The End of Medicine does a nice job highlighting how the FDA's process is also so focused on drugs rather than actually making people healthy that it has created massive stifling effects on non-pharma medical advances. The book highlights all sorts of technological health care advances that could bring the same sort of computer/technology revolution to healthcare (making things faster and cheaper at an exponential rate), but so much of it is stifled by the FDA clinical trial process, meaning all sorts of useful products never actually make it to market.

And while I'm sure I'll face accusations of this in the comments, I am not saying that we should just wipe out the whole FDA process. I'm just suggesting that perhaps it's time to rethink how it works and what the real costs and benefits are... and if there might be a better way that is cheaper and actually encourages much more medical innovation.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Michael, Apr 19th, 2011 @ 7:52am


    Why are you trying to kill all of the disabled children with untested medicine? And baby seals - yeah, why are you trying to club them?

    Quit advocating piracy...I mean...quit advocating counterfeit drugs...I mean...stop producing child porn...

    reply to this | link to this | view in thread ]

  2. icon
    The eejit (profile), Apr 19th, 2011 @ 7:59am

    Re: Why?

    Your cause is wrong. It is always, "Quit advocating quantum sociobiological causes of medicinal failure!"

    reply to this | link to this | view in thread ]

  3. icon
    Chris Rhodes (profile), Apr 19th, 2011 @ 8:03am

    I am not saying that we should just wipe out the whole FDA process

    I will: Let's get rid of the FDA.

    reply to this | link to this | view in thread ]

  4. icon
    Chuck Norris' Enemy (deceased) (profile), Apr 19th, 2011 @ 8:19am

    Legal recourse

    Removing all risk is the problem with actually all government programs. Supposedly the FDA was created to eliminate that risk. Problem is, when the FDA assumes the risk then they get sued when things go bad on FDA approved meds. And when they get sued...the taxpayers pay for it. As long as the legal framework exists for consumers to sue pharma companies for bad meds then we will let pharma foot the bill. Either way taxpayers are already paying for the trials. The FDA is just another government subsidy for the rich and powerful.

    reply to this | link to this | view in thread ]

  5. icon
    Hiiragi Kagami (profile), Apr 19th, 2011 @ 8:20am

    The other side of the pharma business.

    I read another report which states the pharma industry isn't about making people healthy, but instead, is about keeping them comfortable. "A pill for every ill" is the motto used by hospitals and pharma alike, and this is very telling.

    Most medical procedures now relate a cause to a pill. Many software programs are sold to hospitals for this sole purpose, and it's absolutely frightening.

    If our medical community, backed by pharma, has a role only to make us comfortable rather than curing our ill, I'll take my financial freedom to enjoy my last days than I will giving it to a system killing me.

    Let's see someone debunk this report, if they can.

    reply to this | link to this | view in thread ]

  6. icon
    Overcast (profile), Apr 19th, 2011 @ 8:32am

    The FDA seems to exist to help pharma companies increase their bottom line. If they do anything else, it's not evident in their work.

    reply to this | link to this | view in thread ]

  7. icon
    Chris in Utah (profile), Apr 19th, 2011 @ 8:37am

    I'll say it!

    I'll say it for you Mike. Abolish the FDA. Seriously what good has come of there meandering? What exactly purpose does a asthma medicine that increases the risk to asthma related death? What use is a Nasal med that causes anal leakage? The list goes on and on and on. But no, we accept a system by somebody higher because the people don't want to think about it. Let alone think for themselves. It's the same shit different day. Sacrifice a bit of liberty for, with emphasis, the illusion of safety.

    reply to this | link to this | view in thread ]

  8. icon
    Chris in Utah (profile), Apr 19th, 2011 @ 8:38am

    Re: I'll say it!

    Oh did I forget to mention. Yes, you also get to pay for that illusion.

    reply to this | link to this | view in thread ]

  9. icon
    Kaden (profile), Apr 19th, 2011 @ 8:39am

    The FDA does good work

    Neupogen is FDA approved.

    Among it's *11* acknowledged life threatening potential side effects is spontaneous rupture of the spleen.

    Read that again: Spontaneous rupture of the spleen.

    The FDA approved a drug which can make internal organs explode without warning.

    I remember seeing this drug widely advertised on TV: "Ask your doctor if Neupogen is right for you..."

    reply to this | link to this | view in thread ]

  10. identicon
    Rob, Apr 19th, 2011 @ 9:08am

    Re: The FDA does good work

    I can't really understand why a drug of this type would be directly advertised to the consumer, but that's a different topic. (I don't remember the ads, probably due to TiVo. My guess would be chemo patients.)

    On the question of spleen rupture: almost any drug (or other therapy) has some potential side-effects. Then again, not treating many conditions may also have side effects -- or just "effects". So you need to weigh the risks of treatment vs. the risks of no treatment (or of other treatment, if available) and make a choice.

    Consider this. Just going outside on foot or bike or car carries some risk of getting involved in a traffic accident. This sort of trauma can and sometimes does result in a spleen rupture. Knowingly or unknowingly, we decide whether to take that risk all the time.

    Lastly, if it weren't for FDA regulation, we probably wouldn't know nearly as much about potential side-effects. This would not necessarily be better.

    Of course, the FDA, like anything, can be improved to better protect patients while ensuring they can be effectively treated for disease and injury.

    reply to this | link to this | view in thread ]

  11. icon
    ScientiaVinces (profile), Apr 19th, 2011 @ 9:13am

    Re: I'll say it!

    Ah yes, let's all return to the good old days of "Elixir sulfanilamide"!

    reply to this | link to this | view in thread ]

  12. icon
    DannyB (profile), Apr 19th, 2011 @ 9:27am

    Analyzing the cost-benefit, I propose the following.

    How about two for the price of one? Let's get rid of the USPTO at the same time.

    reply to this | link to this | view in thread ]

  13. identicon
    Anonymous Coward, Apr 19th, 2011 @ 9:34am

    The federal govt. and the FDA don't assume liability for the drugs they approve, a consumer can't sue the FDA just because they approved it.

    The current "cause" is tort reform (and in some places, firmly in place)next, get rid of regulation? So we are to expect pharma execs to just be nice guys and protect the public? Does that work with Wall Street? Oil companies? Anywhere?

    Sure, most companies would do ok, but what harm could the others do, especially considering under the current system, companies still get hammered by the FDA.

    Without the FDA, who is to say there is actually clinical data for the public to review? Why do the tests?

    It would be nice if we could eliminate the FDA (something drug companies would love) but I bet their actual profits would go down because other countries wouldn't let their products on their markets.

    reply to this | link to this | view in thread ]

  14. icon
    Kaden (profile), Apr 19th, 2011 @ 9:45am

    Re: Re: The FDA does good work

    I actually like the idea of shifting government program mandates of 'Keep People Safe' to 'Making People Aware of The Potential Risks so They Can Make Their Own Decisions'.

    For one thing, it'd streamline air travel security down to 2 prominently displayed posters...

    "Warning: Could Go Boom"

    "Warning: Could Fly Into Buildings".

    reply to this | link to this | view in thread ]

  15. icon
    Joe Publius (profile), Apr 19th, 2011 @ 9:49am

    Re: Re: I'll say it!

    I think that's a good point. It's not like the days of laudinum and cough medicines spiked with enough heroin to string out an whale was some kind of great age of safe medicine.

    On the other hand, I think there is room to loosen up the trial process to make it more competative and even a little faster. IMO, the key to that new process would be the most honest disclosures the testers can make. A means would have to be developed to let all the subjects* know the possible risks for taking the drug, and be updated on those risks as time goes by and more knowledge is obtained.

    *Yes I know that not everyone may be taking the actual drug, but unless psychology says otherwise, giving everyone the same information ought to make sure that those who are, are informed.

    reply to this | link to this | view in thread ]

  16. icon
    Nastybutler77 (profile), Apr 19th, 2011 @ 10:24am

    Re: The other side of the pharma business.

    Doctors are taught in medical school, thanks to the AMA (which is funded in large part by the major pharma companies), that the answer to anything is either surgery or pharmacology. Or both.

    Of course before they can decide which option to charge you for, they have to run you through as many tests as your insurance company will allow.

    Never forget, as well meaning as doctors are, they have been essentially brainwashed by the AMA and pharmacutical reps. You thing the health care industry is there to cure you? No, it's a multi billion dollar industry run by large corporations (pharmacutical, HMO's, hospital conglomerates, not to mention GE and other medical equipment manufacturers) who all have shareholders and are seeking to maximize profits. Healthy people are their worst nightmare.

    reply to this | link to this | view in thread ]

  17. identicon
    whisk33, Apr 19th, 2011 @ 10:25am

    Misleading Topic

    It seems to me that this was written on the premise that the purpose of the FDA is to promote medical innovation. "The main purpose of the FDA is to protect citizens from products that are inherently unsafe or that make claims of effectiveness that cannot be substantiated."
    Which includes food and cosmetics,in addition to pharmaceuticals. But your last line says "there might be a better way that is cheaper and actually encourages much more medical innovation." which is NOT the purpose of the FDA. I think you might have good points to make on changing the FDA to actually encourage innovation (if only in the medical department), but since innovation is not part of it's current directive it would be inaccurate to measure it's effectiveness on that standard.
    Perhaps I'm wrong, and while I am certainly no expert of the FDA, I think it is specifically set up to place the prohibition of unsafe goods at a higher priority and ignore the cost of the regulations almost entirely.

    reply to this | link to this | view in thread ]

  18. identicon
    Anonymous Coward, Apr 19th, 2011 @ 10:42am

    Oh, the irony of average Joe discussing the specialized issues!
    The reality is simple: There are no absolutely safe drugs (hey, you can hurt yourself with a band aid!) and there are no drugs without any side effects (even placebo has a few).
    But that does not deter people from taking Aspirin (stomach bleeding?), Tylenol (Liver failure?) and quite a few of others. Are those drugs absolutely safe? No! Then why do people take them? Probably, because they help an absolute majority.
    Now, about the horrifying list of side effects on newer drugs. It’s a simple liability issue. Evil Pharma MUST disclose ALL side effects, regardless whether they are caused by the drug, or not. In fact, it is too costly to figure out if the tested drug is a real cause or not. Hence, if you take a closer look at the actual occurrence of those horrific side effects, in most cases they will be BELOW 1 present of total population tested. In plain terms, if some poor schmuck got in a car accident and ruptured his spleen while being a part of the clinical study, there is a good chance that “spleen rupture” will be on the list of side effects. Does it makes sense? No. Can it be a reason to prevent a frivolous law suit – you betcha.
    So, he did we get here? Simple answer – idiotic law system and overall society desire to always blame somebody for their own mishaps. Plus pure greed which works all that well with current legal system.

    reply to this | link to this | view in thread ]

  19. icon
    Atkray (profile), Apr 19th, 2011 @ 10:43am


    You took my post.

    reply to this | link to this | view in thread ]

  20. icon
    Atkray (profile), Apr 19th, 2011 @ 10:48am

    Re: Re: Re: The FDA does good work


    I can't decide if this is insightful or funny.

    reply to this | link to this | view in thread ]

  21. icon
    John Gardner (profile), Apr 19th, 2011 @ 12:10pm


    ^^ this

    FDA used to be about making sure the drugs didn't kill people, as if that's somehow a successful business model, but now drugs must also pass an effectiveness test.

    Also, how many people does the FDA kill by not allowing drugs to the market? Has anyone done any studies on that?

    reply to this | link to this | view in thread ]

  22. identicon
    From The Source, Apr 19th, 2011 @ 12:39pm

    Re: Misleading Topic

    Here's what the FDA lists as its responsibilities:

    * Protecting the public health by assuring that foods are safe, wholesome, sanitary and properly labeled; human and veterinary drugs, and vaccines and other biological products and medical devices intended for human use are safe and effective

    * Protecting the public from electronic product radiation

    * Assuring cosmetics and dietary supplements are safe and properly labeled

    * Regulating tobacco products

    * Advancing the public health by helping to speed product innovations

    * Helping the public get the accurate science-based information they need to use medicines, devices, and foods to improve their health

    reply to this | link to this | view in thread ]

  23. identicon
    Anonymous Coward, Apr 19th, 2011 @ 2:03pm

    Add the PDUFA to the list of FDA actions hindering progress

    Add the Prescription Drug User Fee Act to the list - a company has to pay a minimum of $497,000 per year to be inspected by the FDA plus another $91,000 per dosage form strength manufactured. Add to this a $1.5 MM ($750,000 for generics) fee for the FDA to review your paperwork (NDA/ANDA) on each drug, and small companies are entirely excluded from manufacturing pharmaceuticals. The big boys don't mind - its a drop in the hat. This is another major reason you see far less innovation in the US. The EU has similar fees, but they are closer to $250,000 for a paperwork (NDA/ANDA) review and for small companies about 90% of the fees are waived.

    reply to this | link to this | view in thread ]

  24. identicon
    Anonymous Coward, Apr 19th, 2011 @ 5:30pm

    We should get rid of the FDA, because we all know that 99% of pharmaceutical company employees are actually interested in helping create a better and healthier world.

    Too bad those 99% of employees work for their evil bastard bosses that make up the other 1%

    reply to this | link to this | view in thread ]

  25. icon
    Chris in Utah (profile), Apr 19th, 2011 @ 11:46pm

    Re: Re: Re: I'll say it!

    Ye know a private company (that the free market demands) can handle this testing as well. Come to think of it its good business model too, if drug is not tested the people scorn you. Then its just a matter of which do you trust more; International body of health, your government, corporate entity or a local business.

    Why do I feel old knowing the origin of calling a doctor a quack was from giving quick (quicksilver, aka mercury)

    The world is a horrible place and there will and always be forces that want to kill you but the answer is not to ask some higher authority to resolve your issue. Look to the person next to you and you may just get somewhere.

    reply to this | link to this | view in thread ]

  26. identicon
    Anonymous Coward, Apr 20th, 2011 @ 9:05am

    Consistency, anyone?

    What I can't figure out is why real pharmaceutical companies have to put up with all the FDA regulations, while Kevin Trudeau just keeps on selling. If Smilin' Bob can pitch useless junk, why can't Glaxo? Whatever the standard is, it should be the same.

    reply to this | link to this | view in thread ]

  27. identicon
    patent litigation, Apr 25th, 2011 @ 3:29pm

    Perhaps the impending "patent cliff" will help refocus pharma. As a recent New York Times article points out, rather than inventing new ailments so that they can invent new drugs to sell to more people, maybe now the pharmaceutical companies will have more of an incentive to streamline their operations and create drugs for people who really need them. If cures for cancer and other such serious ailments result from it, then I gladly welcome the patent cliff.

    reply to this | link to this | view in thread ]

  28. identicon
    mole removal at home, Sep 9th, 2011 @ 5:29am

    In fact, medical innovation is for making the individual's life easy disease free... But the main purpose is forgot and medicines are made for temporary relief. So, it doesn't matter whether ti helping or hindering.

    reply to this | link to this | view in thread ]

  29. identicon
    wizard, Jul 9th, 2013 @ 8:59pm

    Re: Why?

    what a fruit cake, I hope you never get cancer

    reply to this | link to this | view in thread ]

  30. identicon
    wizard, Jul 9th, 2013 @ 9:04pm

    Re: Re: The FDA does good work

    How old are you??
    I see you believe in fairytales

    reply to this | link to this | view in thread ]

  31. identicon
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  32. identicon
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