Results for “fda”
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Andy Grove on Reforming the FDA

In an important editorial in Science, Andy Grove, former Chief Executive Officer of Intel Corporation, advocates restricting the FDA to safety-only trials. Instead of FDA required efficacy trials patients would be tracked using a very large, open database.

The biomedical industry spends over $50 billion per year on research and development and produces some 20 new drugs….A breakthrough in regulation is needed to create a system that does more with fewer patients.

While safety-focused Phase I trials would continue under their [FDA] jurisdiction, establishing efficacy would no longer be under their purview. Once safety is proven, patients could access the medicine in question through qualified physicians. Patients’ responses to a drug would be stored in a database, along with their medical histories. Patient identity would be protected by biometric identifiers, and the database would be open to qualified medical researchers as a “commons.” The response of any patient or group of patients to a drug or treatment would be tracked and compared to those of others in the database who were treated in a different manner or not at all. These comparisons would provide insights into the factors that determine real-life efficacy: how individuals or subgroups respond to the drug. This would liberate drugs from the tyranny of the averages that characterize trial information today. The technology would facilitate such comparisons at incredible speeds and could quickly highlight negative results. As the patient population in the database grows and time passes, analysis of the data would also provide the information needed to conduct postmarketing studies and comparative effectiveness research.

Grove cites Boldin and Swamidass and especially Bartley Madden’s important book, Free to Choose Medicine, as inspiration for this proposal. By the way, I also recommend Madden’s book very highly (I am also proud to note my bias in this regard).

I have long advocated restricting the FDA to safety only trials (see, for example, and my paper on off-label prescribing) and it seems that this idea, once considered outlandish, is now rapidly gathering advocates.

Addendum: Derek Lowe offers useful comments (see also Kevin Outterson below). One point that I think the critics miss is that nothing in Groves’s proposal and certainly not in Madden’s proposal which is somewhat different or in anything that I have advocated precludes randomized clinical trials for efficacy. Indeed, I strongly support such trials and have argued for greater funding so such trials can be done not by the pharmaceutical companies but by more objective third parties.

FDA: Moving to a Safety-Only System

It now costs about a billion dollars to develop a new drug which means that many potentially beneficial drugs are lost. Economist Michele Boldrin and physician S. Joushua Swamidass explain the problem and suggest a new approach:

Every drug approval requires a massive bet—so massive that only very large companies can afford it. Too many drugs become profitable only when the expected payoff is in the billions….in this high-stakes environment it is difficult to justify developing drugs for rare diseases. They simply do not make enough money to pay for their development….How many potentially good drugs are dropped in silence every year?

Finding treatments for rare disease should concern us all. And as we look closely at genetic signatures of important diseases, we find that each common disease is composed of several rare diseases that only appear the same on the outside.

Nowhere is this truer than with cancer. Every patient’s tumor is genetically unique. That means most cancer patients have in effect a rare disease that may benefit from a drug that works for only a small number of other patients.

…We can reduce the cost of the drug companies’ bet by returning the FDA to its earlier mission of ensuring safety and leaving proof of efficacy for post-approval studies and surveillance.

Harvard Neurologist Peter Lansbury made a similar argument several years ago:

There are also scientific reasons to replace Phase 3. The reasoning behind the Phase 3 requirement — that the average efficacy of a drug is relevant to an individual patient — flies in the face of what we now know about drug responsiveness. Very few drugs are effective in all individuals. In fact, most are not effective in large portions of the population, for reasons that we are just beginning to understand.

It’s much easier to get approval for drugs that are marginally effective in, say, half the population than drugs that are very effective in a small fraction of patients. This statistical barrier discourages the pharmaceutical industry from even beginning to attack diseases, such as Parkinson’s, that are likely to have several subtypes, each of which may respond to a different drug. These drugs are the underappreciated casualties of the Phase 3 requirement; they will never be developed because the risk of failure at Phase 3 is simply too great.

Boldrin and Swamidass offer another suggestion:

In exchange for this simplification, companies would sell medications at a regulated price equal to total economic cost until proven effective, after which the FDA would allow the medications to be sold at market prices. In this way, companies would face strong incentives to conduct or fund appropriate efficacy studies. A “progressive” approval system like this would give cures for rare diseases a fighting chance and substantially reduce the risks and cost of developing safe new drugs.

Instead of price regulations I have argued for more publicly paid for efficacy studies, to be produced by the NIH and other similar institutions. Third party efficacy studies would have the added benefit of being less subject to bias.

Importantly, we already have good information on what a safety-only system would look like: the off-label market. Drugs prescribed off-label have been through FDA required safety trials but not through FDA-approved efficacy trials for the prescribed use. The off-label market has its problems but it is vital to modern medicine because the cutting edge of treatment advances at a far faster rate than does the FDA (hence, a majority of cancer and AIDS prescriptions are often off-label, see my original study and this summary with Dan Klein). In the off-label market, firms are not allowed to advertise the off-label use which also gives them an incentive, above and beyond the sales and reputation incentives, to conduct further efficacy studies. A similar approach might be adopted in a safety-only system.

Addendum: Kevin Outterson at The Incidental Economist and Bill Gardner at Something Not Unlike Research offer useful comments.

How the FDA Impedes Innovation

Mike Mandel  has a good piece, significantly published by the Progressive Policy Institute, on the FDA and innovation. MelaFind is a handheld computer vision system, database and expert system that helps dermatologists to identify which skin lesions should be biopsied for melanoma. The device works quite well but the FDA has deemed the device “not approvable” because (quoting Mandel):

  • The device did not do better than the experienced dermatologists in the study (“the FDA review team does not believe this is a clinically significant difference between MelaFind and the examining dermatologist”)
  • The device was tested on lesions identified by experienced dermatologists, not on the broader set of lesions that might be identified by “physicians less experienced than these dermatologists.”
  • The device did not find every melanoma in the sample (“Since the device is not 100% sensitive, if use based on the device’s diagnostic performance reduces the number of biopsies taken, harm could ensue in the form of missed melanomas.”)
  • The device was not demonstrated to make inexperienced physicians the equal of experienced dermatologists (“Currently, formal training is offered to physicians to become board certified dermatologist and thus be able to diagnose clinically atypical lesions. The FDA review team would have to compare this board certification training to that offered by the sponsor to those physicians operating MelaFind to determine if it is found adequate.”

Some of these complaints are legitimate, others not so much. But even if MelaFind is not perfect today nor appropriate in all circumstances it’s exactly the type of innovation that we should encourage. Devices such as MelaFind could not only improve medical care they can reduce costs and make good quality medical care more widely available in developing countries, for example, where experienced dermatologists are in short supply.

Most importantly, innovations get better over time. But if you impede the first generation the second generation may never come into existence and, as Mandel notes, no first-generation device could satisfy the FDA’s conditions. It’s like refusing to give the Wright Brothers a license to fly because their first airplane only flew for 59 seconds.

The signal that is being sent by the FDA impedes all medical innovation.

For more on the FDA see

Device Lag at the FDA

A new survey of the FDAs impact on medical technology innovation reports that the FDA is slow, inefficient and costly.  The survey is from the Medical Device Manufacturers Association so take it with a grain of salt (but see below). What is most telling, however, is how manufacturers rate the FDA compared to its European counterpart(s).

Overall Experience: 75 percent of respondents rated their regulatory experience in the EU excellent or very good. Only 16 percent gave the same ratings to the FDA…

Respondents also cite specific concerns with the FDA process (not just a general complaint of slowness which could be efficient) such as:

…44 percent of participants indicated that part-way through the regulatory process they experienced untimely changes in key personnel, including the lead reviewer and/or branch chief responsible for the product’s evaluation.

As a result:

On average, the products represented in the survey were available to patients in the U.S. a full two years after they were available to patients in Europe (range = 3 to 70 months later).

In some cases, respondents said they initiated their regulatory processes within and outside the U.S. at the same time, but received clearance/approval in the U.S. much later. In anticipation of long, expensive FDA reviews, others said they decided to seek or obtain European approval first in an effort to generate sales overseas that could help fund their U.S. regulatory efforts.

The survey has a good discussion of potential biases. To those not familiar with the industry it might seem obvious that the MDMA would want to bash the FDA but my experience is that companies in the business don't like to complain. Indeed, the survey notes:

A number of companies indicated that they would not respond due to fear of retribution from the FDA (despite assurances we would maintain their confidentiality).

See FDAReview for more on the FDA. Hat tip: Mike Mandel.

Addendum: Loyal reader Josh Turnage has produced a video plea to the FDA on behalf of his mother to leave Avastin approved for breast cancer.

FDA Overreach

From the Washington Post:

The Food and Drug Administration on Friday ordered five companies that offer genome-sequencing tests to consumers, or that provide the scientific services for them, to prove the validity of such products.

The FDA said the tests, which scan a person's DNA for gene variants associated with specific diseases, are medical devices requiring the agency's approval.

The ability of genetic tests to predict diseases is currently limited; if the FDA were simply to require firms to acknowledge this point, say with a clear statement of probabilities, that would be one thing (although this task is better met by the FTC under advertising regulation).  But the FDA is brazenly overreaching in trying to regulate genetic tests as medical devices. First, there is no question that these tests are safe–safer than brushing your teeth!–and also effective in identifying genetic markers.  Thus, there is no medical reason whatsoever for regulation.

Moreover, genetic tests provide information, personal information about our bodies and our selves.  The FDA has no standing to interfere with the provision of such information.

Consider, I swab the inside of my cheek and send the sample to a firm. The idea that the FDA can rule on what the firm can and cannot tell me about my own genes is absurd–it's no different than the FDA trying to regulate what my doctor can tell me after a physical examination or what my optometrist can tell me after an eye examination (Please read the first line.  "G T A C C A…").

The idea that the FDA can regulate and control what individuals may learn about their own bodies is deeply offensive and, in my view, plainly unconstitutional.

*Reputation and Power*, a new theory of the FDA

The subtitle is Organizational Image and Pharmaceutical Regulation at the FDA and the author is Daniel Carpenter.  Here is the book's home page but I don't yet see an Amazon listing.  Here is a Barnes&Noble listing, note the price discount.

Where to start?  It exhausts me to even write about this book, which is the most comprehensive and most detailed study of a regulatory agency written — ever – to the best of my knowledge.  It supplements and overturns all existing work on its subject and it will prove a model for future investigations.  It's not short!

The starting point is the notion of reputational capital and the claim that the FDA seeks to preserve and extend its reputation, for a variety of political reasons.  One implication of this is that the FDA is sometimes too loose and other times too strict but that both biases are possible.  The framework is then used to address numerous questions, including the following:

1. Why the U.S. has the most bureaucratically intensive drug regulation in the world.

2. Why the 1962 amendments were passed.

3. Why FDA regulation is so often treated as de facto irreversible.

4. Why the tenure of a division director matters for how the decisions of that division are treated.

5. Why there is so much judicial deference to the FDA.

6. Why the FDA has been so influential on a global scale.

7. How public attention affects the speed of FDA procedures.

The author makes a strong case that the FDA is one of the most powerful and most important regulatory agencies in the world and one of the most important extensions of state power.  Everyone interested in the economics of regulation should read this book, just be prepared to be a little overwhelmed.  I would also note that this is not mainly a partisan book in one direction or the other, though on net I read the author as wishing to see a stronger FDA.  (On p.379, for instance, I read Carpenter as overly dismissive of the "drug lag" argument.)

Here is Carpenter's previous book, which I have not read.  For the pointer to this work I thank Steve Teles.

Why should the FDA ban drugs?

305 Economists Called to Smart Questionnaire on the FDA:

Daniel Klein, Jason Briggeman, and Kevin Rollins have designed a questionnaire about the economic rationale for the policy that makes new drugs and devices banned until individually permitted by the FDA. Klein and Briggeman present the questionnaire and the list of economists. Will anyone provide a sensible market-failure rationale for the policy?

The link is here, take a look.  I believe Congress should eliminate the "effective" part of the "safe and effective" clause, dating from 1962.  If the question is allowing people to experiment with all pharmaceutical products, I see a few possible arguments (I'm not necessarily endorsing them) against doing that:

1. There will be more successes but also a greater number of bad events.  This will possibly cause people to lose confidence in pharmaceuticals, just as many crazy theories circulate about vaccines and many people refuse them or refuse them for their children.

 2. Our courts are not up to handling a greater number of liability suits, whether in terms of the quality of those courts or their ability to handle the case load.  See Andrei Shleifer's recent paper on regulation as a substitute for an imperfect court system.

3. I am a fan of Robin Hanson's paper "Warning Labels as Cheap Talk: Why Regulators Ban Products."   This was the piece Robin presented when we hired him, and it later appeared in JPubEc.  The main point is that a verbal governmental warning: "We're really not sure this is safe, caveat emptor!" is not usually credible and people will regard the product as safe, thinking the government would not have otherwise let it come to market.

4. Parents cannot be trusted with their children.

Still, I think there is a good case for greater freedom for choice when it comes to pharmaceuticals.

The FDA regulation of tobacco

Here is an NYT summary of what it means:

…the law would give the F.D.A. power to set standards that could reduce nicotine content and regulate chemicals in cigarette smoke. The law also bans most tobacco flavorings, which are considered a lure to first-time smokers.

For purposes of argument, let's say you buy into paternalism and the government's ability to do a good job with it (no need to reargue those points in the comments, they are only simplifying assumptions for the purpose of focusing on another question). 

My question is: why impose quality restrictions when higher taxes would appear to be more efficient in limiting consumption and raising revenue at the same time?  Revenue is especially scarce right now and making cigarettes less appealing lowers the revenue that can be raised by taxing them.

Can you derive the conditions under which such a quality restriction might be efficient nonetheless?  I see a few cases:

1. More government revenue is a bad thing. 

2. You have a funny model where a quantity restriction serves as a non-convex "notch" incentive and has a more powerful disincentive effect, yet with lower deadweight loss, than the smoother incentive embedded in the higher tax-enhanced price.  (Heterogeneous consumer groups can contribute toward such a result but these are exactly the kind of theory papers which many people hate.)

3. The black market is a big problem.  Quality regulations mean that good black market cigarettes must be made with illegal inputs and thus those inputs can be detected at the factory source and also remain detectable throughout the life of the cigarettes.

What else am I missing?  Overall, given the initial premises, I still suspect that higher taxes are a better policy than quality restrictions.

Priorities for the New FDA Commissioner

 The Manhattan Institute asked a number of experts in health care policy to provide brief words of advice to the new FDA commissioner.  Here is one bit from yours truly:

The most difficult but valuable pharmaceutical policy for the new administration will be to resist the temptation to impose price controls.  Price controls promise lower prices but the cost is fewer new drugs and diminished medical progress. Moreover, the promise is illusory. Since new drugs typically lower total health care costs (by reducing time in hospital) price controls will raise total health care costs. Prizes and patent buyouts, two innovative ways of reducing pharmaceutical prices while maintaining incentives to develop new drugs, should be investigated and tested.

Henry Miller, Paul Rubin and Mary Woolley also comment.

Should we waive legal liability for FDA-approved drugs?

So asks Megan McArdle.  The argument runs as follows:

I don’t understand quite why FDA approval of drugs and medical devices
hasn’t long provided legal safe harbor for their manufacturers. The
defects that show up, such as the Vioxx and Fen-Phen problems, are
discovered long after approval precisely because they’re so rare that
they don’t show up in ordinary clinical trials. If the government
experts, who are presumably highly motivated to avoid catastrophes,
can’t spot the danger, why do we expect the drug companies to?

I can think of three possible rebuttals:

1. We simply can’t trust the bureaucrats to find the flaws with drugs.  But note this is inconsistent with both the rhetoric of FDA defenders ("the FDA can work") and FDA critics, who argue we are overinvesting in drug safety as it is.

2. Lawsuits encourage the companies to look for problems once a drug is already approved.  Regulation does not.

3. People need lawsuits as a way of emotionally striking back.  If they are denied that privilege, they will demand ridiculously oversafe levels of regulation in the first place.  In this view regulation is as much about building consumer confidence in a health care system as it is about protecting people.

I do not currently have a view on this matter.  Do you?  Kevin Drum is opposed.

FDA Delay

Last year the Abigail Alliance won a stunning decision from the DC Circuit Court of Appeals that dying patients have
a due process right to access drugs once they have been through
FDA approved safety trials.  Here’s a sad update from Kerry Howley writing in the Aug/Sept. issue of Reason Magazine (not yet online):

After last year’s ruling in the alliance’s favor, the FDA argued that the group no longer had legal standing to sue it, since none of the patients who had signed the original affidavits were still members.  They were all dead.

See for more on the FDA.

How Should the FDA Incentivize?

The FDA often wants manufacturers to provide additional studies such as for pediatric uses or for testing of off-label uses of already approved drugs.  How should the FDA incentivize these studies?  Long-time reader Steve (who has good reason to know and thus shall otherwise remain anonymous) writes:

I was reading an article about pediatric drug testing and the BPCA, and I had an epiphany–the people at the 
table don’t have the incentives necessary to solve the problem.

…possible solutions to the problem of limited pediatric testing appear to boil down to: 1) Modify the reward (primarily through exclusivity); 2) 
Give out grants; and 3) Force studies through a government mandate. 
These solutions reflect the interests of the three groups sitting at 
the bargaining table, i.e., 1) Big pharma, 2) Academics, and 3) 
Bureaucrats. What is totally missing is the idea that incentives can be created on both the risk and reward side of the equation. … For example, if the FDA fast-
tracked NDAs with pediatric data, and guaranteed a decision in 90 days, they could, with minimal cost, cause a major shift in incentives. 

    …Any thoughts on how the situation can be improved?

The FDA significantly raises the costs of creating new drugs – there are some benefits in better safety and efficacy but I think the current system results in too much drug lag and drug loss.  I would cut back on FDA regulation considerably but I am not against more government-financed studies of safety and efficacy.  Once a drug is on the market and especially when it is off-patent, knowledge about the drug is a public good and thus often underprovided.  I would thus reduce the FDA’s control over drug choice but increase the budget for drug information e.g. through NIH financed studies like the Women’s Health Initiative which shockingly showed that then widely used homorone replacement therapy increased not decreased coronary disease.


FDA payola?

The FDA will soon stipulate that researchers who accept more than $50,000 in corporate grants, contracts and consulting fees cannot sit on FDA advisory committees.  This will rule out many current advisors.

First, I wonder how this fits into the old Sam Peltzmann story that the FDA is too conservative in approving new drugs.

Second, what if we reformed in the opposite direction?  Why not do away with all the mandatory drug trials and the like, and simply let drug companies purchase approval for new drugs?  Think of the companies as posting bonds, and of course they still can be sued ex post if the drug harms somebody.  The companies still will have reason to conduct their own tests.  Set the price high if you wish.

To be sure, how much a company will pay for approval will depend on expected profits, not social welfare.  But even with market power there is usually some connection between those two magnitudes.  Or maybe the fear of lawsuits won’t deter poorly capitalized companies, but at the very least we could let the corporate giants take this path.

Some companies might be too overconfident about their drugs.  If you believe that, I hope you are buying puts on them.  Other companies might have excessively short time horizons.  If you believe that, I hope you are loading up on drug companies with heavy R&D and raking in your excess returns.

So does this idea have any takers?  If not, why not? 

Addendum: Matt Yglesias argues regulation is a substitute for litigation.

Abigal Alliance v. FDA

In May I wrote about the stunning ruling by the DC Circuit Court of Appeals that dying patients have
a due process right to access drugs once they have been through
FDA approved safety trials.  (See the link for some amazing quotes from the ruling.)  The case is now on appeal and possibly headed to the Supreme Court and I am thrilled to have a role.

I am one of the authors of an Amici Curiae brief, a friend of the court brief.  The DC Circuit Court of Appeals made it’s ruling based on the right to control one’s own body:

A right of control over one’s body has deep roots in the common law. The
venerable commentator on the common law William Blackstone wrote that the right
to “personal security” includes “a person’s legal and uninterrupted enjoyment
of his life, his limbs, his body, [and] his health,”…barring a terminally ill
patient from use of a potentially life-saving treatment impinges on this right
of self-preservation.

But the court noted that a patient’s fundamental right could be rebutted if the FDA can show
that its policy of barring access to these drugs is "narrowly tailored
to serve
a compelling governmental interest."

The brief, submitted by Jack Calfee, Dan Klein, Sam Peltzman, Benjamin Zycher and myself, argues that barring access to experimental drugs does not serve a compelling governmental interest and in fact reduces patient welfare.

Unfortunately, I do not think that the Abigail Alliance can win the case; recognizing the rights that the DC Circuit of Appeals recognized would be too big a blow to our nanny state.  Nevertheless, if we can help the court to be aware of some of the tradeoffs involved with drug regulation that will be valuable and it’s also great to be on a paper with Peltzman.

Thanks also to Ted Frank and others for acting as Counsel for the Amici Economists.

FDA Shock

In a stunning
the DC Circuit Court of Appeals ruled yesterday that dying patients have
a due process right to access drugs once they have been through
FDA approved safety trials.  The FDA’s refusal to allow firms to sell and
patients to buy these drugs "impinges upon an individual liberty deeply
rooted in our Nation’s history and tradition of [respecting the right of]

A patient’s fundamental right could be rebutted if the FDA can show that its policy of barring access to these drugs is "narrowly tailored to serve
a compelling governmental interest."  (This issue will be decided on
remand).  But the opinion, by Clinton appointee Judge Judith Rogers and backed by Chief Judge (and GMU faculty
member) Douglas Ginsburg, is strongly worded.

The court writes:

A right of control over one’s body has deep roots in the common law. The
venerable commentator on the common law William Blackstone wrote that the right
to “personal security” includes “a person’s legal and uninterrupted enjoyment
of his life, his limbs, his body, [and] his health,”…barring a terminally ill
patient from use of a potentially life-saving treatment impinges on this right
of self-preservation.

In perhaps the most shocking statement the court says the FDA is like
someone who interferes with another person trying to aid a third.
The court cites the Restatement (First) of Torts:

[someone who] intentionally prevents a third person from giving to another
aid necessary to his bodily security, is liable for bodily harm caused to the
other by the absence of aid which he has prevented the third person from

The Court also notes:

Government regulation of drugs premised on concern over a new drug’s
efficacy, as opposed to its safety, is of recent origin. And even today, a
patient may use a drug for unapproved purposes even where the drug may be
unsafe or ineffective for the off-label purpose.  Despite the FDA’s claims
to the contrary, therefore, it cannot be said that government control of access
to potentially life-saving medication “is now firmly ingrained in our understanding
of the appropriate role of government,”…

If the court’s ruling is upheld it will begin a return to the pre-1962 system in which safety trials alone were required for marketing approval.  I have long advocated returning to a safety-only system.  FDA regulation creates drug lag and drug loss – delays in the introduction of new drugs and increases in the costs of R&D resulting in fewer new drugs.   While more extensive testing is not without benefits, FDA incentives practically ensure that caution will be excessive.

The court was also right to point to the vitality and importance of off-label prescribing.  Once a drug has been approved for some use it can be prescribed for any use, even one quite different than the one for which it was approved.  Since new uses for old drugs are discovered all the time what this means is that we already have a voluntary system of drug review and approval that exists outside and apart from the apparatus of the FDA.  A safety-only system does not mean an absence of regulation it means greater reliance on a voluntary regulatory system that better takes into account the hetereogeneity of patient diseases and preferences – what I have called the Consumer Reports model of regulation rather than our current paternalistic model.

The case, by the way, was brought by the Abigail Alliance named after Abigail Burroughs who died after repeated requests to access experimental drugs were denied, it was later shown that the drugs were effective and could have prolonged her life.