The public’s concerns about prescription drug prices and drug company profits translate into support for many proposals to control drug costs. For example, in 2005, almost two-thirds (65%) of the public say there should be more government regulation of prescription drug prices, and 70% of these people (or 46% of all adults) continue to support more regulation of prices even it leads to less research and development of new drugs.
Plainly, then, all of the economic arguments in favor of deregulation of drugs have fallen on deaf ears. No surprise there. Until I studied economics, I heard nothing but stories about how the FDA saved us from thalidomide.
The second interesting survey comes from Dan Klein's and Charlotta Stern's paper "Is There a Free-Market Economist in the House?" Klein and Stern asked AEA members their attitude about FDA regulation. Results:
Strongly Support 48%
Support Mildly 22%
Mixed Feelings 15%
Oppose mildly 8%
Oppose strongly 6%
Kind of makes you wonder if the economic arguments are as one-sided as I suggest. Notice, however, that economists are clearly more opposed than the public. Most of the public wants more safety regulation; they go beyond mere support for the status quo. And economists are about as likely to favor abolition (that's what I take "strongly oppose" to mean, anyway) as the public is merely to favor less regulation.
What happens, however, if we listen to economists who specialize in the FDA, rather than random economists at the AEA? Klein reports that opposition becomes very one-sided indeed:
Alexander Tabarrok and I review much of the literature in our website “Is the FDA Safe and Effective?” (FDAReview.org). We include a compendium of 22 quotations by economists calling for significant liberalization of FDA control, and we explain that we have been unable to find quotations favorable to current levels of control by economists who work on the FDA. I believe economics reaches a clear conclusion in favor of significant liberalization of FDA control of pharmaceuticals. Thus, given the range of response options provided by the question, the first two options [strongly support/mildly support] are simply wrongheaded.
Bottom line: The public thinks the FDA is great. Regular economists think it's pretty good. And economists who specialize in the FDA think it's pretty bad. I think I see a familiar pattern.