Toward a 21st-Century FDA?

by on April 16, 2012 at 6:35 am in Economics, Law, Medicine | Permalink

In a WSJ op-ed, Andrew von Eschenbach, FDA commissioner from 2005 to 2009, is surprisingly candid about how the FDA is killing people.

When I was commissioner of the Food and Drug Administration (FDA) from 2005 to 2009, I saw firsthand how regenerative medicine offered a cure for kidney and heart failure and other chronic conditions like diabetes. Researchers used stem cells to grow cells and tissues to replace failing organs, eliminating the need for expensive supportive treatments like dialysis and organ transplants.

But the beneficiaries were laboratory animals. Breakthroughs for humans were and still are a long way off. They have been stalled by regulatory uncertainty, because the FDA doesn’t have the scientific tools and resources to review complex innovations more expeditiously and pioneer regulatory pathways for state-of-the-art therapies that defy current agency conventions.

Ultimately, however, von Eschenbach blames not the FDA but Congress:

Congress has starved the agency of critical funding, limiting its scientists’ ability to keep up with peers in private industry and academia. The result is an agency in which science-based regulation often lags far behind scientific discovery.

Should we not, however, read the following ala Strauss?

The FDA isn’t obstructing progress because its employees are mean-spirited or foolish.

…For example, in August 2010, the FDA filed suit against a company called Regenerative Sciences. Three years earlier, the company had begun marketing a process it called Regenexx to repair damaged joints by injecting them with a patient’s own stem cells. The FDA alleged that the cells the firm used had been manipulated to the point that they should be regulated as drugs. A resulting court injunction halting use of the technique has cast a pall over the future of regenerative medicine.

A peculiar example of a patient-spirited and wise decision, no? And what are we to make of this?

FDA scientists I have encountered do care deeply about patients and want to say “yes” to safe and effective new therapies. Regulatory approval is the only bridge between miracles in the laboratory and lifesaving treatments. Yet until FDA reviewers can be scientifically confident of the benefits and risks of a new technology, their duty is to stop it—and stop it they will. (emphasis added).

von Eschenbach ends with what sounds like a threat or perhaps, as they say, it is a promise. Unless Congress funds the FDA at higher levels and lets it regulate itself:

…we had better get used to the agency saying no by calling “time out” or, worse, “game over” for American companies developing new, vital technologies like regenerative medicine.

Frankly, I do not want to “get used” to the FDA saying game over for American companies but nor do I trust Congress to solve this problem. Thus, von Eschenbach convinces me that if we do want new, vital technologies like regenerative medicine we need more fundamental reform.

Alan April 16, 2012 at 7:39 am

Abolish all government regulation of medical treatment.

Let the sick and the injured subscribe to private evaluation services who will advise on the suitablility and safety of proposed treatment. (These evaluation services might be a branch of health insurance companies.) This will, in turn, create business opportunities for statisticians who can determine which evaluation providers and which practitioners have the best track record. Everyone concerned will, of course, voluntarily conform to the highest standards of accuracy in data collection and openness in publishing the results.

Daniel Dostal April 16, 2012 at 11:21 am

Is the whole thing tongue-in-cheek? Or just the last sentence? Frankly this is a fantastic way to add meaningful and intelligent jobs to the world.

Andrew' April 16, 2012 at 7:46 am

Your own stem cells should be regulated as if they were a drug…because the regulator said so? Thank god!

D April 16, 2012 at 11:44 am

Makes sense only in a world where genes can be patented.

Cliff April 16, 2012 at 12:34 pm

No it doesn’t

Ryan April 16, 2012 at 7:56 am

Health economic regulators see themselves as some sort of important force of counter-balance against what they perceive to be “industry greed.” You can’t solve a problem like this with logic, reason, or economics. Their motives are tainted by their having a skewed perspective.

I once heard a regulator say to me in a private conversation, “The fun part is stomping on the ones who have high prices.” True story.

I mean, it’s a pathology. You can’t reason with someone who thinks service-providers are evil.

Vacslav April 16, 2012 at 8:11 am

Thanks to the FDA the cost of a new drug development was about $500M ten years ago and is projected to reach $1B soon – this makes innovation by small companies and development of treatments for rare diseases nearly impossible.

Given that it is politically impossible to disband the FDA, the right direction is to transform it into a research and advisory institute.

Von Eschenbach writes: FDA scientists I have encountered do care deeply about patients and want to say “yes” to safe and effective new therapies.

Right. Let them care deeply about whatever they want, but “yes” or “no” belongs to the patient and the doctor.

ras April 16, 2012 at 8:29 am

“Give us more money or we’ll forbid treatment.”

Greed is where you find it.

Bill April 16, 2012 at 9:11 am

Sayin this with a Texas and Christian fundamentalist drawl:

“Ya suppose, Mistah FDA Commisionar, tha was sumpin else holdin back stem cell research durin your term?”

Andrew' April 16, 2012 at 9:37 am

The answer is probably no. I’ve heard a stem cell research say that embryonic stem cells is a fund-raising slogan. In other words, the real researchers don’t think of them as the holy grail that the public is led to believe. And as here, these are the patient’s adult stem cells being reinjected. I wonder why you think that embryonic stem cell research is relevant. If it’s not purely a political canard you could say that embryonic stem cells are technically superior and adult stem cells are a workaround, but that is not how I understand the research results and I don’t think it is because of a lack of research, it is because adult stem cells are better and easier to obtain that previously thought.

Andrew' April 16, 2012 at 9:50 am

Btw, the reason, if I’m right, is pretty intuitive. A lot cases these regenerative effects are jobs your personal adult stem cells are already supposed to be doing but for whatever reason need a little boost due to aging, the immune system, the extent of the damage, etc. Using embryonic stem cells for such a job is a lot less natural and much more of a developmental project.

Researchers always want to do whatever they want to do, but since embryonic stem cells are “hot” they are mostly very useful for publishing lots of papers whose only significance is applying known techniques to new cells (along with some truly significant papers I’m sure). Politically, they are of course extremely useful to signal that you are pro science (by that I mean pro government science institutions) and pro abortion. Technically, they are much less promising than advertised.
“There are currently no approved treatments using embryonic stem cells… ES cells, being pluripotent cells, require specific signals for correct differentiation—if injected directly into another body, ES cells will differentiate into many different types of cells, causing a teratoma. Differentiating ES cells into usable cells while avoiding transplant rejection are just a few of the hurdles that embryonic stem cell researchers still face…Additionally, in instances where adult stem cells are obtained from the intended recipient (an autograft), the risk of rejection is essentially non-existent.”

Also, you don’t really need the research on embryonic cells at this point to overcome these hurdles as all technical problems must be overcome in animals first anyway. It is useful to claim that political opposition is what is hindering embryonic stem cells, because otherwise they’d have to admit that they overhyped them to score purely political points. So, at this point, technical failure of embryonic stem cells HAS to be the fault of the ‘anti-science’ groups.

Bill April 16, 2012 at 10:06 am

Andrew, I am so glad to hear that stem cell research was unaffected by the Bush Administration.
So, what you are saying is that it was just for show.

Rahul April 16, 2012 at 9:42 am

This particular op-ed is pure lobbying for more FDA funds. Whatever be FDA’s problems and the case for reforming the FDA, basing a solution on anything von Eschenbach says is a bit iffy.

chuck martel April 16, 2012 at 9:55 am

Of course, it’s bureaucratic extortion, the typical technique used by education, transportation or any other government-organized activity, “If you want results, give us more money!” However, it’s not only the government. There’s a vested interest in maintaining the kidney dialysis industry, which generates millions in profits. Rent-seeking of the most macabre variety.

dead serious April 16, 2012 at 10:07 am

I don’t want to hear calls to ban the FDA from the same group howling about tort reform.

Pick one.

Ryan April 16, 2012 at 10:23 am

That seems like a false dichotomy to me. Regulations aren’t torts.

mpowell April 16, 2012 at 11:40 am

Wow. No kidding. That’s the whole point. You can regulate an industry through direct regulations or through torts. Get rid of both and all you have is buyer beware. I know that for a lot of libertarians, that seems just fine, but most people (especially in a field like medicine and health) anticipate massive problems with that approach.

Ryan April 16, 2012 at 1:06 pm

Hi, mpowell.

I’m okay if you want your health care system regulated. Let’s look at this closely:

Are tort reform and FDA-abolition mutually exclusive? No.
Is tort reform the same thing as abolition of torts? No.
If torts are reformed and the FDA is abolished, are there still opportunities for regulation? Yes.

Conclusion: I’m not sure why anyone must choose between the belief that the FDA is 100% optimal and the belief that torts as they currently stand are 100% optimal. It is a false dichotomy. There are obviously a million blends of choices out there, and no reason to think that any one choice implies the absence of any other choice.

So, uh…?

Cliff April 16, 2012 at 12:37 pm

Who is howling about tort reform? Give me an FDA ban, thanks

dead serious April 16, 2012 at 1:52 pm

If you’re for an FDA ban, most of the rest of your affiliated party/group.

troux April 16, 2012 at 10:56 am

Ryan, the point is that deregulation + tort reform inevitably leads the consumer holding the bag in the event of corporate malfeasance.

Ryan April 16, 2012 at 1:08 pm

As per my comment above: Reforming torts and abolishing torts are two different things, are they not?

dead serious April 16, 2012 at 1:55 pm

Either you’re being dense on purpose or you are unaware that many of the cohort that favors an outright elimination of the FDA also favors massive tort reform (including severe caps on damages).

Which, as others have already pointed out leaves consumers a host of lab rats subject to the experimentation of the entire pharmaceutical industry.

Ryan April 16, 2012 at 3:14 pm

Not being dense, just trying to make sure we don’t throw the baby out with the bathwater. I’m not in favor of caps on damages – that’s a bad idea IMHO. But we shouldn’t take all possible tort reforms off the table just because one commonly suggested reform is bad, right?

dead serious April 16, 2012 at 4:06 pm

No, I would agree with that.

Mark Thorson April 16, 2012 at 11:00 am

There’s another side to this. The FDA has barely been able to keep up with the many various forms of quack medicine that run rampant in this country. Stem cells are particularly hot right now, and any slackening of effort to demand a high level of scientific evidence for putative stem cell therapies will have immediate consequences, very bad consequences. The FDA needs more enforcement power, not less.

Doc Merlin April 16, 2012 at 11:01 am

Hrm, it sounds like the FDA is holding sick people hostage to increase its funding. While highly immoral, is typical of what we should expect.

Daniel Dostal April 16, 2012 at 11:26 am

All it takes is one bureaucrat and one lawyer. They are technically correct, which, sadly, is not always the best kind of correct.

Steven Kopits April 16, 2012 at 12:07 pm

Now why is everyone surprised? You haven’t aligned the damned incentives.

What is the objective function of a politician operating a cost center–because that’s what government is. It’s primarily to avoid Type I errors, that is, to avoid doing something they shouldn’t have (like let bad medicine reach the market or a terrorist get on an airplane). Because politicians are not paid for assuming Type II errors–not doing something you should have done–Type II errors are effectively ignored. No one complains about the treatment they didn’t get (unless you have cancer–and then it’s just pointless).

If you do the root cause analysis on this, you’ll see it’s because politicians are not incentivized to maximize GDP growth (subject to fiscal sustainability). This is not a hard analysis (and in Hungary, I beat my head against this wall many times). I am frankly astounded that that no one in the economics profession has taken the 30 minutes to work through the problem.

So, economists, why not take 30 minutes at your blackboard and think through the following questions:

1. Is not the central liberal (libertarian) critique of government its insensitivity to Type II statistical errors?
2. If so, why is the government insensitive to Type II errors? What is the objective function of the bureaucrat? (Argue a counter-factual here, if you like.)
3. How does the objective function of the bureaucrat relate to the objective function of the politician above him? Does the organization assume the objective function of its owners, ie, will the FDA assume the objective function of Congress? (I have argued that it does; again, this is very clear from the Hungarian privatization experience.)
4. If politicians’ objective function is to be politically acceptable subject to a budget constraint (which I have also argued–and, boy, did I see this in Hungary), then how might we alter the objective function to better allow it to balance Type I against Type II statistical errors?

If you’re able to do this analysis, then congratulations! You have all the skill of a first year management consultant.

Jonathan Biggar April 16, 2012 at 6:30 pm

This is a general problem with the increase in regulatory law instead of leaving things where they should be: torts tried in court. We’ve gotten no reduction in lawsuits that regulation promised to deliver. Instead we now have a bunch of bureaucrats that must justify their existence by being activists that seek out new ways that someone is “harming society”, or are so afraid of risking their own reputation that they act as roadblocks to innovation.

dead serious April 16, 2012 at 10:21 pm

Quite frankly, if we’re giving up on regulation of critical industries (pharma being one since its products can kill unwitting people) – I want not only tort relief but criminal penalties at my disposal.

Kevin Outterson April 18, 2012 at 8:51 pm

Please provide a list of fabulous stem cell treatments available abroad that have been killed by the FDA.

And I thought it was the Republicans who blocked stem cell research, not the FDA.

Patricia April 19, 2012 at 9:11 am

Yes Bill, It was most likely a cover up or lie. Both the Republicans and the FDA are connected at the hip. I do appreciate reading both sides of this coin…but really….do any of us think the Republicans are going to work honestly for the good of All people. Not gonna happen in my life time….

Joanna April 23, 2012 at 12:25 am

Doctors have a long history of prescribing harmful or merely useless treatments, and consumers have a long history of gratefully paying for quack treatments. Neither doctors nor patients are very concerned with clinical trial evidence. Given current patterns of off-label prescription, I see no evidence that insurance companies are either. If the FDA doesn’t enforce them, they won’t happen. The FDA isn’t primarily about evaluating evidence: its more important function is to ensure that evidence is produced in the first place.

Many, many promising treatments fail in randomized clinical trials performed to minimal standards of rigor. Without the FDA, this wouldn’t happen, because the trials would not be done. Those FDA refusal are great for patients, because they spare huge number of people from harmful treatments. The FDA’s bigger job is not to ensure that treatments are “safe” because a dirty secret is that there is no such thing as a safe treatment. The FDA’s job is to make sure that trials show that benefits of a treatment exceed the harms. In my opinion, they have not refused enough, for example patients with mild depression are receiving harms, but no benefits, from their SSRIs.

It is very clear that when the FDA cannot act to demand high quality evidence, the evidence does not appear. Eg, the FDA can only require placebo-controlled trials, not comparisons to the best available treatment. So the latter are rarely performed by their manufacturer. If the FDA could no longer require quality placebo-controlled trials, I see no reason why those would be performed either.

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