Many economists have studied and written on the FDA. It seems that all such economists who pass judgment on the FDA find it to be overly restrictive and favor freer markets. Some propose specific and piecemeal decontrol; others favor creating a free market by abolishing the agency. We have not been able to find a single such economist who defends or supports the contemporary FDA or advocates tighter regulation. Thus, informed economists agree that government should make the drug market freer.
The authorities quoted here are economists (they have received advanced degrees in economics). We do not mean to suggest that only the thoughts of economists are worth paying attention to; rather, we suggest that anyone who studies the issue in a systematic way, as economists are trained to do and are compelled to do to some extent by the standards of their profession, and publishes a judgment invariably favors reform in the libertarian direction.
J. Howard Beales III (1997, 15): “[My study] suggests that there is considerable room for improvement in the existing process. Changes to accelerate approval of new drugs would offer significant health benefits to patients.”
Gary Becker (2002): “...experience indicates that the FDA frequently has delayed approval to avoid embarrassing political and medical mistakes... Eliminating all requirements except a reasonable safety standard would vastly reduce drug prices in the U.S., as companies would be encouraged to develop additional compounds to compete for customers.”
John E. Calfee (1996, 318): “[Where an examination of the effects of the FDA’s pharmaceutical advertising policies is possible,] the evidence is very strong that the FDA suppresses a great deal of useful information. Experience from related markets in this nation and abroad also strongly indicates that informational competition involving drugs and devices is likely to work well, and that the pharmaceutical market does not pose unique problems that make it unsuitable for traditional competitive dynamics.”
Noel D. Campbell (2000, 342): “There is an alternative to reform: abandon the current regulatory process and embrace the free-market that has worked so well for so long in other fields. Free- market third-party certification promises safe and effective devices—quickly and efficiently—and gives consumers the freedom to choose the amount of risk that best suits them. The market provides consumers with the full remedies and protections of our legal system, and it frees businesses from the crippling costs of undue regulation.”
Milton Friedman (quoted in Pearson and Shaw 1993, 39): “‘The FDA has already done enormous harm to the health of the American public by greatly increasing the costs of pharmaceutical research, thereby reducing the supply of new and effective drugs, and by delaying the approval of such drugs as survive the tortuous FDA process.’ When asked, If you could do anything to improve health in America, what would you do? Friedman replied: ‘No more licensing of doctors. No more regulation of drugs. Not of any kind. Period.’”
Dale H. Gieringer (1985, 196): “[T]he benefits of FDA regulation relative to that in foreign countries could reasonably be put at some 5,000 casualties [not lives] per decade or 10,000 per decade for worst-case scenarios. In comparison, it has been argued above that the cost of FDA delay can be estimated at anywhere from 21,000 to 120,000 lives per decade. . . . Given the uncertainties of the data, these results must be interpreted with caution, although it seems clear that the costs of regulation are substantial when compared to benefits” (italics added).
Henry G. Grabowski and John M. Vernon (1983, 71): “A more fundamental kind of regulatory reform could be accomplished through congressional change in the FDA's regulatory mandate. It is possible to envision an FDA regulatory structure that would operate more as a certifier and disseminator of information for the vast majority of new products introduced. . . . Manufacturers would have the option to market a new drug even if it failed to be certified by the FDA.”
Robert Higgs (1995b, 2): “Americans would be better off with drastic curtailment—ideally the complete abolition—of the current regulatory regime, which imposes major costs while providing little if any genuine protection of the public health.”
Randall Holcombe (1995, 116): “. . . .government regulation of medical drugs has several negative consequences: it raises the cost of all drugs, it delays the introduction and use of beneficial drugs, it reduces the amount of innovation in the drug industry, and it prevents certain types of drugs from ever being introduced. In exchange for these costs, the government certifies that medical drugs are safe and effective. The policy experts who have evaluated the costs and benefits of drug regulation have almost uniformly concluded that the costs of the regulations are not worth their benefits.”
Alison Keith (1995, 99): “A more widespread consumer understanding of the benefits and risks of routine aspirin use could produce substantial medical benefits. Suppose that most of the 1.5 million Americans expected to have heart attacks in 1994—and the one-third of those who were expected to die—had taken aspirin routinely. Surely the number of people avoiding heart attacks and staying alive would have been large. On the other side, the medical risk associated with a less restrictive information policy toward consumers is an increase in serious side effects, but for a substantially smaller number of people, since both baseline and aspirin-caused increase[s] in risk of serious side effects are apparently small. The current policy appears to put a much greater weight on the side-effect risk of allowing more information to consumers, relative to the expected benefits.”
Daniel B. Klein (2000b, 95–96): “Even without the government approval systems, voluntary institutions and the tort system would utilize testing and professional certification to screen out unsafe drugs. The government approval process here and abroad is a set of bureaucratic hoops and hurdles often inappropriate or unnecessary for the drug in question. . . . [T]he harms of the FDA are unredeemed.”
Keith B. Leffler (1981, 74): "The empirical results presented here show that product promotion has a significant positive effect on the entry success of therapeutically important new drugs. Given the large potential social benefits from the more rapid adoption of superior drug therapies, restrictions on pharmaceutical promotion appear to risk large losses in consumer welfare for the promise of unproven and perhaps nonexistent gains."
Sam Peltzman (1973, 207–8): “If the Food, Drug and Cosmetic Act [of 1938] was intended to benefit consumers, the inescapable conclusion to which this study points is that the intent is better served by reversion to the status quo ante 1962. This conclusion follows fairly directly from the size of the 'problem' with which the 1962 Amendments sought to cope. Consumer losses from purchases of ineffective drugs or hastily-marketed unsafe drugs appear to have been trivial compared to their gains from innovation. In this context, any perceptible deterrent to innovation was bound to impose net losses on consumers and the Amendments seem clearly to have provided such a deterrent. Indeed, the conclusion can be put more strongly. If our estimates of the gains and losses due to exceptionally beneficial and unsafe drugs respectively are at all reasonable, there was already a bias costly to consumers contained in the pre-1962 proof-of-safety requirement of the [1938] Act. . . . [T]he [1962] Amendments have simply exaggerated this bias.”
Paul Rubin (1995, 48): “When we think of the FDA and overregulation, we tend to think of the inexcusable delays in approval of new drugs. Scholars have long been aware that the agency causes unnecessary deaths and suffering by this policy. Nothing in this chapter is to be interpreted as minimizing this cause of needless suffering. But this is only part of the problem with the FDA. . . . [The] FDA’s policies greatly retard the spread of [drug] information. . . . The FDA should allow manufacturers to advertise any claim for which reliable scientific evidence exists, whether or not this claim has been approved for the label, and this advertising should be allowed for both consumers and physicians. No policy requiring prior approval of advertisements would be mandated, by Congress or by the FDA. With respect to ads to consumers, the requirement of the ‘brief summary’ should be abolished. The FDA should allow free and unrestricted advertising of pharmaceuticals on TV and in print, subject only to regulation for ‘falsity’ but not for ‘deception’ as currently defined. The results will be greatly improved health of consumers and reduced prices of pharmaceuticals.”
Russell S. Sobel (2002, 378): “A free market in over-the-counter medicines, with laws regarding only the factual content of statements would result in an improvement in public health.”
Meir Statman (1983, 62): “A number of alternatives have been suggested to counter the trend of decreasing incentives for pharmaceutical R&D caused by FDA regulations. The more modest of these alternatives involve increasing the efficiency of the regulatory process, thereby reducing some of the regulatory costs. More radical alternatives involve the abandonment of the requirement for FDA approval of drugs in favor of a new role for the FDA as a provider of information on drugs. Since consumers can sue for damages the manufacturers of drugs that are not safe or effective, there may be sufficient incentives for drug firms to introduce only safe and effective drugs even without FDA regulations.”
Alexander Tabarrok (2000, 48): “I find that the largely unregulated system of off-label prescribing has large benefits and few costs. Off-label prescribing speeds medical innovations to patients, it increases the number of drugs available to doctors, and it lowers the costs of medical innovation. Consistent with these benefits, off-label prescribing is widespread and common in the United States today. The largely unregulated system of off-label prescribing is thus working well and should be extended. . . . [A]n analysis of off-label prescribing strongly suggests that the FDA's authority over new drugs, particularly the requirement that new drugs be tested for efficacy[,] appears to be detrimental to the health and welfare of U.S. health consumers and thus should be ended.”
Peter Temin (1980, 206, 213): “Current drug policy ignores [the trade-off between a therapy's effectiveness and its painfulness]. By denying this choice [a less-effective but less-painful therapy], the policy restricts people more than it should. I would favor allowing people to choose this intermediate treatment position, although I would try to make sure that their choice was an informed one. But whether or not people are capable of understanding the relevant information, I still would favor giving people more choice for their own well-being than the current system allows. . . . The [program] I have in mind combines less surveillance at the premarket level and more surveillance, of a particular kind, at the prescription level.”
Robert D. Tollison (1996: 37): “The model of government oversight with private certifiers has several advantages. It would bring state of the art scientists and scientific methods into the process of drug and device certification. It would foster innovation in drug and device evolution, oversight, and certification procedures, leading to lower costs, faster approval rates, and enhanced safety and effectiveness. It would cut down on bureaucratic red tape and delay. It would not require any changes in the existing legal standards applied by the FDA. For these and various other reasons, movement to a system of competitive certification performed by private laboratories and testing groups commends itself for the consideration of policymakers.”
W. Kip Viscusi (1996: 90): “There is a widespread consensus in the literature that the current FDA drug approval process establishes safety incentives that are excessive. The stringency of the process and the meticulous review of new pharmaceutical drugs is reflected in the substantial delays that U.S. consumers have experienced with respect to the introduction of new pharmaceutical products. . . . Studies have also shown that because of these delays Americans have been prevented from having access to new drugs with beneficial effects, as the agency places a greater weight on errors of commission rather than errors of omission. This imbalance in the emphasis for these two types of errors has led to excessive deterrence of new risks that may be created by pharmaceutical products and inadequate weight on reducing existing risks that patients now experience.”
Murray Weidenbaum (1993, 89): “The first [lesson of this article] is that while some drugs are very profitable, many more are not. The second is that price controls would be a mistake. The third is that what's needed is more competition. Warts and all, the competitive marketplace is the best protector of consumers.”
Steven N. Wiggins (1981, 619): “The results [of this paper] indicate that regulation has had a major direct impact on [drug] introductions as well as a significant indirect effect through a reduction in research spending. These estimates indicate that regulation has reduced introduction rates by approximately 60%... The results indicate a steep trade-off between greater certainty about drugs' effectiveness and the rate of drug introductions...This trade-off needs to be taken into account by regulators in their attempts to set appropriate standards for the marketing of new products.”
