David R. Henderson  

The Problem with FDA Restrictions on Drugs

How We Count Counts: Diane Coy... Trump and/or Berlusconi...

Or, actually, one of many problems.

When asked specifically how his wife's illness had changed his work at the F.D.A., Dr. Pazdur said he was intent on making decisions more quickly.

"I have a much greater sense of urgency these days," Dr. Pazdur, 63, said in an interview. "I have been on a jihad to streamline the review process and get things out the door faster. I have evolved from regulator to regulator-advocate."

This is from Gardiner Harris, "F.D.A. Regulator, Widowed by Cancer, Helps Speed Drug Approval," New York Times, January 2, 2016.

Dr. Pazdur, according to the reporter, "has been a man denounced by many cancer patient advocates as a slow, obstructionist bureaucrat." Pazdur, the oncology chief at the FDA, is one of the key gatekeepers. So if cancer drug approvals are slow, he bears much of the responsibility. But now, partly because his wife got cancer and recently died from cancer, he has changed.

In her struggle with cancer and ultimately her death in November, Ms. Pazdur had a part, her husband and a number of cancer specialists now say, in a profound change at the F.D.A.: a speeding up of the drug approval process. Ms. Pazdur's three-year battle with cancer was a factor, they say, in Dr. Pazdur's willingness to swiftly approve risky new treatments and passion to fight the disease that patient advocates thought he lacked.

I generally argue that people respond to incentives. But a careful reading of the piece suggests that that's not what's really going on here. In 2014, he approved a drug for ovarian cancer, against the wishes of an expert advisory panel that voted it down 11 to 2. But, as he pointed out, it was aimed at a cancer that was genetically different from that of his wife. So it doesn't appear to be a narrow issue of incentives.

So why did Dr. Pazdur change? He hinted at it with his self-described move from regulator to regular-advocate. Good for him and I'm sorry for his loss. What he's saying, I think, is that the lives of strangers for whom he was making literally life-and-death decisions have become more real to him.

But he should have always been that way. Do we count a regulatory system as good when the regulator has to suffer a personal loss in order to become an advocate for those whom his decisions are affecting? Is there some other way?

Yes, there is, and it's a way that Alex Tabarrok, Daniel Klein, and a number of others, including Charley Hooper and me, have written about: strip the FDA of its power to make such decisions. Let it serve as an information provider and certifier. Let companies sell drugs that the FDA has not certified, as long as they say in big letters: THIS DRUG HAS NOT BEEN CERTIFIED BY THE FDA.Then we wouldn't have to depend on personal losses of regulator to get them to care more about the lives of people they're affecting.

One other interesting note. Many critics of FDA regulation, like Sam Kazman and the above-mentioned authors, have often pointed out that every month of delay in approving a drug costs lives. It's refreshing to see the New York Times admit as much. Gardiner Harris writes:

Although companies go through a yearslong discovery and testing process with new drugs before filing a formal application with the F.D.A., the average decision time on drugs by Dr. Pazdur's oncology group has come down to five months from six months. That is a major acceleration in a pharmaceutical industry where every month's delay can mean thousands of lives lost and sometimes hundreds of millions of dollars in sales that, given limited patent times, can never be recovered.

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CATEGORIES: Regulation

COMMENTS (17 to date)
Brad writes:

Don't you think that "lives saved" through a lengthy drug screening process is more visible than "lives lost" due to bureaucratic FDA?

I don't understand under what moral framework can one set of human beings (FDA) deny another set of (dying) human beings (cancer patients) access to potentially life-saving drugs? It's morally reprehensible from almost any angle.

ThomasH writes:

"What he's saying, I think, is that the lives of strangers for whom he was making literally life-and-death decisions have become more real to him.

But he should have always been that way."

I do not see the logic of this. The lives of the people who will benefit from a new drug should be no more and no less "real" than those who will suffer the adverse side effects. Both lives should be equally "real" in the cost benefit analysis that FDA does. If we think the FDA has perverse incentives to be to risk averse about side effects, Congress should change the incentives, for example by giving a presumptive pass to anything approved by other (trusted) countries.

The idea of allowing the sale of uncertified drugs (although still with a doctor's prescription) is probably a good idea, although my guess is that most doctors' aversion to the risk of a lawsuit after a bad reaction to a merely permitted but "uncertified" drug would not make this measure very effective (unless there are also lawsuits for non-prescription). And would dueling lawsuits be a more cost effective way to make these decisions?

Jon Murphy writes:

The FDA already does this on the "food" side of the agency. Shouldn't be too hard for them to do it on the "drug" side.

Jim Glass writes:


How the patent system and the FDA discourage study of cancer prevention (quoting...)

“R & D on cancer prevention and treatment of early-stage cancer is very socially valuable,” the authors told me in an email, “yet our work shows that society provides private firms — perhaps inadvertently — with surprisingly few incentives to conduct this kind of research.”

To secure F.D.A. approval, after patenting a drug, drug companies race the clock to show that their product is safe and effective. The more quickly they can complete those studies, the longer they have until the patent runs out, which is the period of time during which profit margins are highest. Developing drugs to treat late-stage disease is usually much faster than developing drugs to treat early-stage disease or prevention, because late-stage disease is aggressive and progresses rapidly. This allows companies to see results in clinical trials more quickly, even if those results are only small improvements in survival.

This very lesson is taught in some medicinal chemistry textbooks. For instance, one notes that “some compounds are never developed [into drugs] because the patent protected production time available to recoup the cost of development is too short.”...

Between 1973 and 2011 ... there were over 17,000 trials of patients with the lowest chance of survival (those with recurrent cancers) but only 500 for cancer prevention, which confer the longest survival gains....

Bedarz Iliaci writes:

Perhaps the insurance companies might be averse to paying for non-FDA certified drugs. Or might they be obliged to pay irrespective of the cost and effectiveness of the drug?
It is the third-party payment this creates a role for an agency like FDA.

Daniel Klein writes:

Nice post. One comment: The focus of the NYT article is on shaving months off the decision on a new drug application. But the real issue is the extremely protracted many-years-long process of testing that precedes even submitting the application, a process ruled over by the FDA.

It's great that Pazdur shaves a month or two off the final step, but the real issue is the regimented system of requirements preceding the application.

Debating the speed with which the FDA decides new drug applications is a bit like debating how quickly a state Bar examination is graded.

John Hayes writes:


The FDA does not perform drug screen or operate RCTs, that's done by the pharma companies. The FDA also doesn't assume liability (mostly pharma companies, sometime doctors), determine cost-benefit (pharma companies, insurers), or really perform any research (NIH, pharma companies, private foundations).

I think your moral question is right but does anyone know specifically, what takes 5 months and is there any added value at all?

Nathan W writes:

I think it is legitimate to be concerned that desperate people will end up paying through the teeth, perhaps all of their life savings and more, for treatments which prove to be no better, or perhaps even worse, than snake oil.

People should have better access to drugs which have not been approved, but this should be as a part of voluntary trial usage, free of charge to the desperate consumers who are essentially guinea pigs.

BorrowedUsername writes:

Is there a way companies can have a similar incentive without the delay? Maybe have companies post large bonds when they start selling a drug after some trials (presumably you don't want someone marketing PEZ as a cancer treatment). Then they post a bond and continuing studies are done with the drug in practice. After X year's there's a review and if the drug is ineffective they forfeit the bond (or portion of the bond depending on the actual outcome)?

Basically the idea is you backload the costs conditional on an unsuccessful drug?

db writes:
strip the FDA of its power to make such decisions. Let it serve as an information provider and certifier. Let companies sell drugs that the FDA has not certified, as long as they say in big letters: THIS DRUG HAS NOT BEEN CERTIFIED BY THE FDA.

This would be similar (but on a much larger scale than) the regulations allowing for homebuilt aircraft. The FAA regulations allow for an aircraft to be built for personal use and educational/recreational uses by a non-certified builder. There is a thriving industry in building components and equipment for such aircraft. The whole thing is predicated on the idea of placing the risk on the builder/pilot/passengers. Indeed, the regulations require that all such aircraft be marked "EXPERIMENTAL" and have a placard visible to passengers that reads to the effect of "THIS AIRCRAFT HAS NOT BEEN CERTIFICATED BY THE FAA AND DOES NOT MEET REGULATORY STANDARDS FOR CERTIFICATED AIRCRAFT"

Often, builders suffix the required language with "...IT EXCEEDS THEM."

Professional aircraft mechanics can work on such aircraft without endangering their certificates or taking on any more liability than they would working on a certificated aircraft. This would provide an analog to licensed doctors experimenting with unapproved drugs.

It may be wise to set the liability standards a bit higher for medical experimentation, but there is a precedent in federal regulations for allowing this type of action in an otherwise extremely overregulated industry.

Thomas B writes:

It strikes me that some thought might be given to the liability side of things. For example, by taking a non-FDA-approved drug, the user might be required to waive all liability rights (thereby creating a disincentive to use). On the other hand, this could create a disincentive to drug companies' certification of the drugs. I don't have an opinion on the right answer, at present.

BTW, I am also familiar with some of the work the FAA has done in this area with ultralight, "experimental", and Light-Sport aircraft, which all operate under "lighter regulation" regimes. The approach has been very successful, and while I'd like to see it used more widely in small aircraft, kudos to the FAA for its willingness to innovate on that front.

Joe writes:

I agree with ThomasH.

Sadly, the incentive to do your job requires at least one of your family members or close friends to be negatively impacted so you finally do your job. I am no crazy anarchist but this is just another insane reason why public control over ANY activity is a cause for suspicion by some, even if they are not camped out in Oregon.

Henry Miller writes:

Reciprocity of drug approvals with (certain) other countries could have numerous benefits. See http://www.forbes.com/sites/henrymiller/2015/10/14/an-antidote-for-escalating-drug-prices-reciprocity-of-regulatory-approvals/ and http://www.nationalreview.com/article/428302/drug-prices-less-government-involvement

Charley Hooper writes:


If we think the FDA has perverse incentives to be to [sic] risk averse about side effects, Congress should change the incentives,...

For the record, the FDA does have perverse incentives and they are due, in part, to Congress. The FDA has long known that it is far better (for the FDA's health) to not approve a good drug (the victims are invisible) than to approve a bad drug (the victims are very visible).

As Henry Miller once said, "This [latter] kind of mistake is highly visible and has immediate consequences—the media pounces, the public denounces, and Congress pronounces."

Charley Hooper writes:

@Jim Glass,

You are entirely correct. As someone in the pharmaceutical industry, I've thought about this problem for years. If you could develop a drug that would prevent all heart attacks thirty years hence, you would have a hard time making a compelling financial case to do so.

The clinical trials would be prohibitively expensive, the patent would have long since expired, and the approval date would be long past the careers of many of those involved.

One thing I do for drug companies is consider the financial case for new drugs. I've recommended against the development of a number of drugs for a variety of reasons. I'm a drug killer.

Charley Hooper writes:

@Nathan W,

(1) Most people pay only a small percentage of the cost of the drugs they use. People without insurance or with low incomes can often get drugs for free from pharmaceutical companies through patient assistance programs. Don't forget that any "snake oil" drugs would still need to be accepted (covered/prescribed/purchased) by insurance companies, doctors, and patients. So the drug company would need to fool all three groups. And, then, if something went wrong, the drug company would need to answer to trial lawyers.

(2) We are all essentially guinea pigs and will be well into the future. Aspirin is over 100 years old and has been administered a trillion times, and yet no doctor can tell me definitely whether I should take it daily to prevent a heart attack.

Bill Drissel writes:

As I understand it, the time required for the FDA to approve a drug is mostly spent demonstrating the efficacy of that drug. 12/13ths of the time, as I remember an article read long ago. Only 1/13th would be required to demonstrate safety. How about restricting the FDA to safety approval and let the Docs concern themselves about efficacy?
Bill Drissel
Frisco, TX
P.S. Maybe a presumptive pass (mentioned above) after safety is demonstrated?

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