I would not have written the paragraph this way

This is from the NYT:

Even the generic drug industry is calling for more regulation. The industry recently agreed to provide the F.D.A. with nearly $300 million annually to bolster inspections and speed drug applications. That amounts to about 1 percent of the industry’s revenues and about 5 percent of its profits in the United States, an extraordinary vote of confidence in the government’s ability to improve the situation.


No shizzle.

The drug and medical device trade associations are also calling for an end to HHS delays in issuing regulations for how they must publicly disclose their payments to physicians. http://www.startribune.com/opinion/otherviews/132658218.html

Even device companies realize that regulations prevent "competition" to the bottom.

Consider this: you are a device company and have invested in, and established your reputation for ethical behaviour. Your rival has been doing something you think is shady involving incentives to investigators or doctors and something you would never do, but is possibly legal and since the rival, an upstart, has nothing to lose because it has not established a reputation, you are reluctant to match this behaviour.

Would you prefer clear regulations or none at all under a system where there is a general law but no regulations.

That's a lot of assumptions Bill. How do you know what device companies 'realize'? How do you know that the customers will accept a 'competition to the bottom' over the long term. That sure is little faith in doctors who would accept lower quality for bribes not just long enough to get an upstart started (they can't make up losses on volume forever).

And you're assuming that the effects of these bad drugs will be so swift that they'll kill people quickly and the market can quickly correct, rather than a case where the market loses all faith in a class of drugs due to long term side-effects in the unethically produced drugs. As with most things in life there's a optimal middle-ground where the market is free to operate, but the market isn't free to kill people.
And frankly this is a reason so many people prefer socialized health care. if 5% of US citizens have to have horrible side-effects or death so that the market can operate "properly", a lot of people are going to choose socialism.

Like Vioxx, right?

Tim, As far as hidden negative long term effects the Government testing process has that same problem.

Second why would they make drugs that kill people rather than just making cheap drugs that are perfectly safe and do nothing. That is what the vitamin pushers, organic food sellers, health food pushers, supplement makers etc. do. If you have the option to produce pill very cheaply that is very safe that does nothing why produce something that might be dangerous unless you think that it is same and you think that it might work? They will only produce dangerous drugs if they think that they might work.

As to how medical device clients think, I represent some. As to faith in doctors, ever see doctors recommend procedures that are useless at best (here I am thinking of a physcial therapist who was going to make my dad walk, not knowing of his specific medical condition which would not make him walk, and which only Jesus could make him walk).

As to bribes and doctors, I suggest you google hearings held by Sen. Grassley on doctor payments, medical devices, and drugs.

So in other words, incumbents want a lot of regulations in order to keep high barriers to entry and prevent competition?

Surprising, isn't it?

No! They want to keep out anyone with low quality because they know they are the only only ones who can provide the acceptable quality level. Right Bill?

evil coporations own the government!...give the government more power so they can protect us!


Cliff, There is always an issue of incumbent protection, but there is also an issue of injuring people by not having regulations. Incumbents, by the way, have to abide by the same rules and regulations.

pretty funny, I wonder where on the political spectrum Gardiner Harris(the reporter) lies? I bet I could guess.

I wonder if the problem isn't so much the reporter's current location on the political spectrum, but rather a degree of economic illiteracy and lack of skepticism.

Looking at his articles (see: http://topics.nytimes.com/topics/reference/timestopics/people/h/gardiner_harris/index.html?inline=nyt-per), he reports a lot on vaccines, FDA issues, and healthcare generally. But without some exposure to economics, game theory, or the like, he may be too ready to take the industry reps at their word. The phrase "regulatory capture" may not be in his vocabulary.

Agree. You can tell from a phrase like "The industry" that the paradigm is "The industry" versus "The regulators."

The phrase "rent seeking" may not be in his vocabulary, either. Actually it's not really in my vocabulary yet, but I've seen it enough times now that I think this is an appropriate use for it.

Grain of salt?

How would you have written it?

Bootleggers & Baptists.


Elsewhere in that article they discuss Obama's campaign against "price-gouging". Just what you want to resolve a shortage!

Larry, he wouldn't have described it as a massive vote.of confidence...the irony in that sentence is only more awesome thanks to the double layer of it!

"The industry"

Please stop linking to articles from the New York Post!

Ok, so I'm naive but what's the incentive to the generics industry at work here? I don't get it. Why donate to a body that's a watchdog on you? Big conflict of interest.

Or is this an indirect bribe? A campaign contribution? What's the game here?

As an aside what mechanism does the FDA have to accept such a donation? If I think the lines at my local DMV are too long can I donate some to the DMV too?

Congress makes the FDA fund itself partly through fees on drug and hardware manufacturers. That means that when the fees are too low, the FDA approval process is not expeditious. The generic manufacturers are paying for a faster approval process.

That amounts to about 1 percent of the industry’s revenues and about 5 percent of its profits in the United States

A small price to pay to lock out new potential competitors.

This is not the bootleggers and baptists problem. This is not regulatory capture.

The drug companies are paying to hasten the approval process. They're not paying for more regulation. They're paying for less regulation. Or, in some sense, "less inefficient" regulation, if it's not less regulation in absolute terms.

The reporter, viewing this through his progressive liberal lens, can only see this as a "vote of confidence" in more gov't, even though it was the gov't that was screwing it up in the first place. The reporter gets it completely wrong, hence Tyler's post title.


Yeah, the gummint is screwing the drug market up by demanding tests for safety and efficacy. Stupid FDA. If only the gummint would get out of the way, we could go back to the pre-FDA libertarian paradise where anyone could call himself a pharamacist and concoct his own remedies, like radium infused water for the common cold. Life sure was better back then.

1. The FDA's drug approval process is arduous.
2. ????
3. We should go back to radium infused water.

Yup, that's exactly what I said.

OK, so how did the gov't screw it up in the first place (except by demanding evidence of efficacy and safety) and how does it need to be fixed? You seem to think that calling the FDA regulations (by inference) "progressive" and "liberal" counts as evidence of their needless costliness and inefficiency. My understanding is that the FDA has made the generic approval process much easier in the last 20 years - they don't have to jump through nearly as many hoops as for a new drug approval. So what's your evidence that it's the arduous approval process that's causing the supply problem?

Memories around here sure are short. Seems like just last year there was a disaster with contaminated (generic) heparin produced at factories in China. The FDA's problem is that they don't have the resources to inspect all these facilities. Should they just not bother, and let the chips fall where they may? Maybe every patient (who's not unconscious) should ask their doctor the provenance of every medication they're about to be given and decide how they feel about what they're told, right then and there. Isn't that how this works in the libertarian paradise?

From the Reuters article:

"Obama instructed the Food and Drug Administration to get better advance warning of impending supply problems and speed up its review of applications from companies that want to change or ramp up production to address shortages."

Isn't that an admission that the supply problem is the arduous approval process? If you want evidence, why don't you ask Obama or Hamburg?

"Isn’t that how this works in the libertarian paradise?"

You're missing the point. This is probably a waste of my time, but you realize that just because the government isn't doing it doesn't mean no one is doing it, right?

"should [patients ask] ask their doctor the provenance of every medication they’re about to be given and decide how they feel about what they’re told, right then and there."

As you imply, most patients probably don't have the ability to directly evaluate the provenance of their drugs. But how many patients are capable of evaluating the FDA itself? How do they know that the FDA isn't causing more deaths by blocking "good" drugs than it saves by blocking "bad" drugs?

You're also assuming that without the FDA, no other mechanisms of quality assurance would exist. Most doctors care very much about their reputations. In the absence of the FDA, private organizations, like the Underwriter's Laboratory, would spring up to vet drugs and their vendors. While patients might not be able to judge such organizations themselves, doctors certainly can. And unlike the FDA, if my doctor and I disagree with the evaluations of the UL for medicines, I can choose to ignore their recommendations and take the drugs anyway.

"If only the gummint would get out of the way, "

Don't you need to take it up with Obama?

"Just because the government isn’t doing it doesn’t mean no one is doing it, right?"

You mean like the BBB for business reputation (http://www.nytimes.com/2011/02/27/your-money/27haggler.html?pagewanted=all) or Moody's and S&P for CDO creditworthiness? Those sure seem to have worked well.

It does indeed look like BBB and the rating's agencies have done a bad job. Now imagine that you were forced to subsidize them at gunpoint, and would be thrown in jail if you ignored their recommendations. What do you predict would happen to the quality of their evaluations then?

1) We allow people to take all sorts of stupid risks with their bodies (skydiving, motorcycle racing, fatty food). So why aren't they allowed to take risky medicines? Most progressives are "pro-choice" when it comes to the reproductive system--why not be pro-choice about the rest of our bodies?

2) The FDA demands proofs of safety and efficacy before allowing new drugs on the market. So isn't it only logical that we demand proofs of safety and efficacy of the FDA itself? After all, a regulatory body that kills more people than it saves should not be allowed on the market. Given your enthusiasm for the FDA, I'm sure the extensive evidence for the FDA's safety and efficacy is right at your fingertips. Care to share it with us?

Well, since the FDA has been around since 1938, it's a little tough to provide a case study. Perhaps one could look at the sorts of patent medicines running around in the pre-FDA era. Or for that matter look at the scandals that led to its creation.

I don't think I'm claiming that the FDA is perfect. Only that a drug system with the FDA as a checkpoint for validation of efficacy and safety is better than one without. If there are problems with the system, by all means solve them. But the tone of most of the comments here seems to be that we'd be better off without any (government run) system of safeguards. I find that fatuous.

"Well, since the FDA has been around since 1938, it’s a little tough to provide a case study."

But surely the government did rigorous studies of the proposed FDA's safety and efficacy before passing a law that would affect hundreds of millions of people. It can't possibly be that the government passed a sweeping law with little or no evidence that it would have the effects it intended, would it? And, as an enthusiastic supporter of the FDA, I'm sure you have ready access to such proof, and are not simply making bald assertions with nothing to back them up.

"Only that a drug system with the FDA as a checkpoint for validation of efficacy and safety is better than one without."

And your evidence for this is...? Just as the burden of proof is upon drug makers to prove the safety and efficacy of proposed new drugs, the burden of proof is on those who claim that the FDA is safe and efficacious.

And, I would note, you have not addressed the question of freedom of bodily choice. Do you believe that women that women should be able to control their own bodies, and have the choice about whether to carry a baby to term or not? If so, why doesn't that right extend beyond her uterus to the rest of her body?

For those who don't like to use teh google, here's Wikipedia on the origins of the FDA. Let me know if after reading this bit of history you think we'd still be better off with a "let everyone risk his own life however he wants" approach.

By the 1930s, muckraking journalists, consumer protection organizations, and federal regulators began mounting a campaign for stronger regulatory authority by publicizing a list of injurious products which had been ruled permissible under the 1906 law, including radioactive beverages, the mascara Lash lure, which caused blindness, and worthless "cures" for diabetes and tuberculosis. The resulting proposed law was unable to get through the Congress of the United States for five years, but was rapidly enacted into law following the public outcry over the 1937 Elixir Sulfanilamide tragedy, in which over 100 people died after using a drug formulated with a toxic, untested solvent. The only way that the FDA could even seize the product was due to a misbranding problem: an "Elixir" was defined as a medication dissolved in ethanol, not the diethylene glycol used in the Elixir Sulfanilamide. Had it been labeled a “solution” instead, it is argued, the agency could have done nothing to track down and confiscate what medication remained in the public’s hands.

That right there is what scientists call "anecdotal data". I don't think anyone doubts that some individuals marketed harmful drugs or products prior to the FDA. But the question is whether the FDA costs more lives by blocking medical innovation, than it saves by blocking quackery. On that question, you have provided no data.

Impossible to measure, Chris. You, as a data-driven type of fellow, surely know that you can't do a scientific experiment to pit the counterfactual against the real world.

I suppose the best we'll get is to look at other countries where medical product regulation doesn't exist to find all the lifesaving breakthroughs that the FDA is hampering. Here is one: I lived in Turkmenistan for two years, where they have virtually no regulation of drugs or devices--you could buy whatever you wanted at the bazaar. Do you know how many novel, innovative, life-saving therapies I found there? Do you know why the US and Europe have all the breakthrough drugs first? Do you think people's willingness to pay for these new products maybe has something to do with an unbiased government agency having evaluated their safety and efficacy?

Jan, it may be impossible to run the counterfactual, but surely Congress did some prospective studies of the FDA's effects before passing the law? After all, would our own Congress callously subject us to an untested law that may well be causing millions of people to unnecessarily suffer and die? And if, god forbid, such studies have not been done, then isn't it of paramount importance that we do some trials of the FDA's effects immediately?

And if it's impossible, as you say, to measure the FDA's safety and efficacy, then at best we can only say that we don't know if the FDA is causing more harm than good, right? In which case, applying the same standards that the FDA applies to new drugs, shouldn't the FDA be barred from interfering in the market until its safety and efficacy has been established?

And the US is almost exactly like Turkmenistan save for some small details, such as the fact that US has a population sixty times larger Turkmenistan. So that's totally a valid comparison.

I read the NY Times article, and it does not adequately explain why there is a shortage. It's a muddle, but it seems like its main purpose is to praise Obama for taking action.

"Some people say it's the government's fault, but the government says it's the market's fault"

Good reporting, guy.

More accurately:
"Some industry insider's [i]claim[/i] it's the government's fault, but Mr. Obama says he'll bypass the Republican's in Congress and order the Justice Department to stop Price Gouging and Collusion".

I just got it. Journalism's problem is they ask people for opinions. They call balance asking the spokespeople for the two most extreme organizations involved in the conflict. This makes them the uber-anti-economists.

its the NYT, their job is to verbally felate democratic party presidents.

You mean the way Judith Miller fellated that democrat George Bush on Iraqi WMD?

for confused liberals like myself, can someone explain the inside joke here ? (seriously, I don't get it)
to me, the times graph seems pretty reasonable; drugs are regulated (and people demand that; you see in china and india the growing middle class is demanding more regulation) and regulation is $$, and the industry is offering to pitch in..
My take is that they are trying to emasculate the FDA; if you job at the FDA is dependent on industry money, however indirect that is, you are gonna be softer on bad drugs

I would add, as someone who has worked in FDA regulated biotech, that everyone knows that drugs are a big money stakes game; a seat at the table is ~ 100 million dollars or so- that is the cost to play. Since the industry is profitable, and since they sell way more drugs then we need, I would say that (a) regulation isn't hurting, and (b) we need more regulation, cause many of hte drugs being sold are probably not effective (eg, you really gotta wonder about the epidemic of drugging ADHD kids; I just can't believe that a little exercise or something wouldn't do a lot more good then all this powerful, profitable medical "care)
and lord knows, industry submits a lot of BS crap, trying to sell the American people snake oil.
Oh, I get it, the market is supposed to sort this out...you sell thalidomide, and cause birth defects, then consumers will vote with the pocketbooks and avoid your prouducts in the future; as for the flipper limb babies, tough luck for them.

I believe the implied joke is the article authors somewhat reality challenged post.

The generic drug industry offering $300 million to 'speed up' drug applications and inspections is most likely not a calling for 'more regulation' as the author states, but instead a recognition that the current regulations, staffing and FDA oversight is 'slowing' down the process.

It's more akin to paying the FDA to do their job than a call for 'more regulation'.

Thalidomide, the oft-repeated win for The Feds, probably doesn't mean what the popular narrative thinks (why does it always seem like there is one signature win for each government agency 50 years ago that justifies all manner of subsequent nonsense?). Just for starters, Thalidomide was refused approval due to lack of human trials. Who do you think they do human trials on? (Hint: humans). It's not clear to me that Thalidomide trials would have included pregnant women. It did not fail trials, unless you call Europe our trial population. It was more luck than process that Europe went ahead with the drug. Thalidomide exposed a fetal risk that people didn't think existed (and still misunderstand in many contexts). Now, thanks to the Thalidomide reaction, pregnant women (and fetuses) suffer from a lack of approved drug coverage.

One characteristic of the FDA definitions of the pregnancy categories is that the FDA requires a relatively large amount of high-quality data on a pharmaceutical for it to be defined as Pregnancy Category A. As a result of this, many drugs that would be considered Pregnancy Category A in other countries are allocated to Category C by the FDA. See below.
The FDA has proposed updating its approach to labeling http://edocket.access.gpo.gov/2008/pdf/E8-11806.pdf

I remember my wife being on a cat C med. Rabbit experiments with the drug indicated deformities, but the after-market studies of humans showed none. I read the studies & wondered how many of the rabbits had the condition that the medicine was supposed to treat...

Thalidomide was for morning sickness. If there were phase II trials (the ones after where they check for short-term toxicity), they would have been on pregnant women.

Let's see if re-writing the paragraph helps:

Even the generic drug industry is begging for speedier approvals. The industry recently agreed to provide the F.D.A. with nearly $300 million annually to bolster inspections and speed drug applications. That amounts to about 1 percent of the industry’s revenues and about 5 percent of its profits in the United States, an extraordinary amount of blackmail to pay to get the FDA to move faster on applications.

The word blackmail seems harsh, this seem more akin to a bribe.

Blackmail seems appropriate.
1. The government is the only one that can approve drugs.
2. The government moves much slower than necessary to approve drugs.
3. Generics lose mind share while people who can't afford the name brand go without.

Sounds like blackmailing to me, only blackmailing poor people through drug companies.

I've had experience with the FDA, and I am aware of the slow, sometimes arbitrary nature of the approval process. But this approval is crucial for the drug and device manufacturers, and delays, which occur often and sometimes for no discernible reason, can cost the companies millions. So I'm not surprised that they'll pay to speed it up. And the assertion that this is a vote of confidence in the government's approval process is preposterous. This is akin to saying that a fruit stand operator in an ethnic neighborhood pays protection money to the local thugs because he has confidence in the Mafia. Or that I pay my federal taxes because I have confidence in the federal government. In both cases, the money is paid because the payors have confidence that something much worse will happen if they don't pay.

Yeah...this isn't about more regulation, it's about more inspectors to clear new manufacturing lines, approve process documentation and inspect suppliers. All the i's need dotting and t's need crossing before a plant can come on line.

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