David R. Henderson  

Choose for Yourself, Not Others

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Two Nobel Prize winners, 18 ye... Dementia, Antihistamines, and ...

Don't let your own perceived limits cause you to use force on others who have different views.

Over at Cafe Hayek, Don Boudreaux quoted one of my favorite passages from my book The Joy of Freedom: An Economist's Odyssey:

The FDA may have some expertise when it comes to drug safety and efficacy, but on the only issue that matters - your trade-offs between various risks - you are the expert, and the FDA's scientists are rank amateurs.

One of his commenters, Thomas Hutcheson, agreed with that, writing:
True, but so what? With virtually zero information of the risks of millions of drugs and potential drugs, I'm not in a good position to act on my risk preferences. I'm happy to delegate a large chunk of that to the FDA. Do I think (based on snippets of information) they are generally too cautious about risks? Yes. I'd like them to do better cost benefit analyses, but not get out of the regulation business.

Don, and many of his commenters, replied well, pointing out that there are alternate sources of information available and that other sources would be available if the FDA did not have life-or-death power over drugs. My co-author Charley Hooper and I made this point recently in the Journal of Clinical Pathways. We wrote:
The second change we propose is to allow drug companies to sell drugs that are not FDA-approved as long as the drug company states clearly, in large letters, in the package insert and on the container in which the drug is sold, "This drug has NOT been certified by the FDA." Pharmacists could help disseminate this caution. This second reform sounds radical; but it can actually make all patients either better off, or at least not worse off, by their own standards.

Patients can be divided into two categories: (1) those who insist on FDA certification of any drug they take, and (2) those who are willing to take drugs that are certified by non-FDA certifiers. These non-FDA certifiers could include: U.S. Pharmacopeia, U.C. Berkeley Wellness Letter, Consumer Reports, Drug Facts and Comparisons, medical journals, the multitude of guideline-setting bodies (e.g., American Academy of Pediatrics, American Thoracic Society, National Comprehensive Cancer Network, National Kidney Foundation, and American Heart Association), the Agency for Healthcare Research and Quality, and even HMOs, hospitals, health insurers, or patients' doctors. These organizations review the available evidence and, using a variety of criteria, make recommendations about which drugs are safe and efficacious for various conditions and which ones aren't. Indeed, many of these organizations are more knowledgeable about diseases and their treatments than FDA employees. Drugs that are approved by any of these other certifiers, but not by the FDA, will not be taken by patients in the previously described first category; therefore, they will be neither better nor worse off under the new proposed system.

But consider patients in the previously described second category. These patients will not have to wait for a drug to be approved by the FDA before they can take it. Therefore, some drugs will be available to them more quickly. Therefore, these patients, by their own standards, will be better off. One might argue that people should not be allowed to take drugs that have not been approved by the FDA. But a large majority of Americans now take drugs that the FDA has not certified; we refer to off-label uses of drugs. An off-label use is a use of a drug that the FDA has not approved for that particular use. Off-label prescribing is legal, widely practiced, and actively encouraged by Congress, the National Institutes of Health, Medicare, the Veterans Administration, and the National Cancer Institute. [italics ours]


Commenter on Cafe Hayek Ken MacDonald makes some similar points. I'll quote two of them. First, his point that drugs are not that different from other things:
"With virtually zero information of the risks of millions of drugs and potential drugs, I'm not in a good position to act on my risk preferences."

This is, literally, true with thousands of things in our lives for which there is no government agency telling you what you can and cannot buy. Somehow you manage to get by. Why do you suppose that is? Do you think it has something to do with the fact that sellers of a particular product have great incentive to provide you with information about the products they are trying to sell you?


Second, MacDonald, says what my first response to Hutcheson would have been, pointing out that Thomas Hutcheson is substituting his own preferences for those of others:
"I'm happy to delegate a large chunk of that to the FDA."

And in your "happ[iness]" you've callously taken away everyone else's liberty because YOU felt insecure in YOUR decisions.


Well done, Ken MacDonald.


Comments and Sharing






COMMENTS (39 to date)
Ben H. writes:

I'm 95% on board with this sort of analysis, but for health care in particular it seems to me to break down, in two ways. First of all, other people's healthcare decisions affect my health. If people choose not to vaccinate their children, my risk of getting sick goes up. If people choose to misuse antibiotics, the risk of antibiotic-resistant diseases goes up for everybody. And so forth. Second of all, other people's healthcare decisions affect me monetarily. If people made bad treatment decisions, and thereby make themselves even sicker, the ultimate healthcare costs of their bad decision will be shared by me, because we are all in the health insurance pool together. These are not trivial problems, I think, and they lead me to be somewhat persuaded that some amount of governmental regulation (i.e. coercion) is worth the loss of freedom. If I end up contracting antibiotic-resistant MRSA, or the cost of my health care doubles, as a result of somebody else's stupid decisions, that would also seem to be a loss of freedom for me; so the choice is not really between "freedom" and "lack of freedom", it's between losing some amount of my freedom in either of two different ways. I am not a huge fan of the FDA, but I do trust them to make reasonably rational choices more than I trust the average person to do that. (One glance at the anti-vaxxer movement provides ample evidence for that claim.)

David R. Henderson writes:

@Ben H.,
You make a very good point. It’s not that relevant to the issue at hand, though. The FDA is not the agency that decides on whether vaccination should be enforced or whether doctors should be able to prescribe existing antibiotics. The FDA’s role currently is to restrict or allow vaccines and antibiotics. You won’t get more vaccines with FDA regulation; and you won’t get more antibiotics to fight the current resistant infections with FDA regulation. You’ll get fewer. We might disagree about how far government should go in requiring vaccines or in limiting use of antibiotics. We also might agree. But our agreement or disagreement should not affect our views on the FDA monopoly.

David R. Henderson writes:

@Ben H.,
Also note the particular point I was responding to with this post: one person’s view that because he didn’t know enough about particular drugs (and he said nothing about externalities), he was comfortable with the FDA’s role and therefore it should choose for all of us.

Thomas Hutcheson writes:

It's nice to have someone argue against ones opinions; what the use of expressing them otherwise?

You have successfully identified me as a non-Libertarian. I do not reject on first principle that there may be classes of decisions in which politically decided constraints on individual decisions may be beneficial. I think that the ability to choose among any drugs that a firm may non-fraudulently sell me is very possibly one of those classes.

Specifically, I was not addressing the issue of whether FDA should become one certifying entity among others or whether foods and drugs should be sold with no entity certifying safety and/or efficacy, embedded only in a system of tort law. Perhaps that was a mistaken road not taken in 1906. Or maybe not. The possibility of private information providers/certifiers certainly existed in 1906 and yet we got the system we got. I'm also open to the possibility that democratic decisions can sometimes be right and this may have been one of them.

David R. Henderson writes:

@Thomas Hutcheson,
I think that the ability to choose among any drugs that a firm may non-fraudulently sell me is very possibly one of those classes.
Again, and others might find this interesting too, notice what Ken MacDonald and I both noticed and remarked on: Hutcheson’s emphasis on “me.”
What makes this particularly ironic is that it is so often libertarians who get accused of caring only about themselves.

Rich Berger writes:

Mr. T.

"I do not reject on first principle that there may be classes of decisions in which politically decided constraints on individual decisions may be beneficial. I think that the ability to choose among any drugs that a firm may non-fraudulently sell me is very possibly one of those classes."

So you restated your position in convoluted language and you think that makes it a better argument? You have hidden your own choice in this language in order to conceal it.

Jon Murphy writes:

@BenH

Implied by Prof. Henderson's post, but I want to make more explicit, is the fact that the FDA prevents drugs and vaccines from coming to the market sooner increases the public's exposure to vaccine-preventable diseases and/or anti-biotic resistant drugs, not reduces it.

If we're going to argue that safe drugs and vaccines are important because they are a public good (something that isn't accurate, but that's a different story), then the FDA would stand counter to that claim, not in favor of it.

Mike W writes:

Doesn't the FDA certification work to limit the producer's liability and without this protection there would be less innovation by producers?

Pajser writes:

"Don't let your own perceived limits cause you to use force on others who have different views."

In capitalism, the state can prevent production without force or violence. It can destroy product, or means for its production or fine producer. Neither one of these actions require force or violence or restriction of liberty of either producer or consumer.

Of course, consumer can feel that his choice is reduced and dislike that. Reduced choice is still bad - but it is only one cost, not really big, in complete calculation.

Efficiency of FDA or similar agencies is another issue. What is good reason to believe they cannot be more efficient than market? Market didn't eradicated tobacco in hundreds of years and state agency can do it easily.

Jon Murphy writes:

It can destroy product, or means for its production or fine producer. Neither one of these actions require force or violence or restriction of liberty of either producer or consumer.

I don't...I don't think you understand what violence or liberty is...

Booker DeWitt writes:

@pasjer

Your comment is a perfect example of the arrogance that is so frustrating that ThomasH is expressing and David Henderson is arguing against.

Pajser writes:

John Murphy - I used term "violence" in meaning "force or threat of force against human (or other live being)" and term "liberty" in the meaning "the state in which one can do what he wants to do without being exposed to violence by other human."

Booker DeWitt - I'll think about it. Thank you for warning.

Jon Murphy writes:

@pasjer-

So you've changed the definitions. Makes sense.

Not Sure writes:

[Comment removed pending confirmation of email address. Email the webmaster@econlib.org to request restoring this comment. A valid email address is required to post comments on EconLog and EconTalk.--Econlib Ed.]

Jon Murphy writes:

Not Sure-

In other words, if you can resort to violence...

Pajser writes:

Jon Murphy - I didn't invented these definitions. They are commonly used, for instance, violence is defined that way by WHO, and I think these definitions are sensible. If you use another definition, I'd like to hear.

Not Sure - You are right. But, destroying tobacco or fining people doesn't require violence. Also, every serious production, including tobacco production requires violence. It doesn't imply automatically that tobacco shouldn't be produced - but these are elements that should be taken into account when one makes decision.

Jon Murphy writes:

@pasjer- your definition doesn't match the WHO's definition. Besides I (and most other people) prefer the legal definition: (a) an offense that has as an element the use, attempted use, or threatened use of physical force against the person or prop­erty of another, or
(b) any other offense that is a felony and that, by its nature, involves a substantial risk that physical force against the person or property of another may be used in the course of committing the offense. (18 US Code sec 16)

But even granted your unreasonably narrow (and, quite frankly incorrect) definitions, you cannot claim destruction of property or fines does not violate your definition of liberty. After all, if a person is selling something and he is stopped by government force, fines, or destruction of his property, then his liberty "to do whatever he wants without being exposed to violence" is clearly violated.

Mark Bahner writes:
The possibility of private information providers/certifiers certainly existed in 1906 and yet we got the system we got. I'm also open to the possibility that democratic decisions can sometimes be right and this may have been one of them.

We don't live in a democracy...at least not under the law. We live in a republic, in which the Constitution is legally the Supreme Law of the Land.

There is nothing in the Constitution that gives the federal government the power to regulate the safety of food and drugs.

We got the system we got in 1906 because people like Theodore Roosevelt didn't give a damn about what's in the Constitution. (Despite his taken an oath to "preserve, protect and defend" it.)

I don't think much good will come of this presidential election, since neither Hillary Clinton nor Donald Trump has ever given any evidence that they care about the law. But one long-shot hope I have is that Gary Johnson will have a chance to get on stage in a debate and point out that no authorization for the FDA can be found in the Constitution.

Not Sure writes:

"But, ... fining people doesn't require violence."

Only because of the threat of it. Otherwise, people wouldn't pay the fine.

"But, destroying tobacco ... doesn't require violence. Also, every serious production, including tobacco production requires violence."

Producing tobacco requires violence, but destroying it doesn't? Interesting dictionary you've got there.

James writes:

Pajser,

Every taxing and fining authority in the world seems to think it necessary to maintain an inventory of weapons and ammunition. Maybe it is possible to impose taxes and collect fines without violence but no existing government seems interested in trying that. Actual governments use force.

Pajser writes:

Jon Murphy - definition I gave is shorter version of WHO definition, and I think it describes the essence of that definition well.

Definition you cited is definition of "crime of violence." It is not obvious that useful definition of "violence" can be developed from that. If we try, "force against property of another" is problematic. By that definition, thievery, even trespassing are violent crimes. It is not how notion of "violence" is used. We discussed it already few months ago.

Finally, if one's product is destroyed, he cannot sell it, true. It is because product doesn't exist, not because of force or threat with force against him. If you understood "one can do what he wants to do" literally, i.e. one can even break physical laws if he wants, it was not my intention, but yes, you are right. I should give definition which excludes that interpretation. It is only minor technical issue.

Jon Murphy writes:

@pasjer-

Yeah, I'm going to have to revert back to my original comment. I am still not convinced you understand what "violence," "liberty," or even "force" is.

Booker DeWitt writes:

@Jon Murphy-

Your definition certainly is good, but you could go even cleaner and more simple: "behavior involving physical force intended to hurt, damage, or kill someone or something."

Or, as many lawyers and us cops are taught: "the exercise of physical force or intimidation by the exhibition of such force."

Both those definitions prove Pasjer wrong.

Besides, I'd argue that Pasjer doesn't understand the WHO definition of violence. The WHO definition is:

The intentional use of physical force or power, threatened or actual, against oneself, another person, or against a group or community, that either results in or has a high likelihood of resulting in injury, death, psychological harm, maldevelopment or deprivation.

Destruction of property by a government agency absolutely fits that definition as it does cause psychological harm, deprivation, and (in some cases) maldevelopment to the individual.

What is violence if not the physical force to deprive someone the right to earn a living in a peaceful manner?

Besides, as you rightfully pointed out, Pasjer's down definitions are incoherent with his arguments.

Nathan W writes:

I have recently discovered an Amazonian snake oil that offers a 50% reduced risk of dementia if you take 3 doses daily for 20 years. The evidence is proprietary and cannot be disclosed, but I will forward you links to videos of numerous men and women in white jackets with framed degrees on the wall beside them who can attest to this.

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Thankfully, in a free society the government will not get in the way of you pursuing your best interest. Your first shipment of Amazonian snake oil will be delivered to your doorstep within 2 days of your first order, after which point in time you will not be troubled with all the hassle of having to organize repeat orders yourself.

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Jon Murphy writes:

@Nathan W-

So slap a label on it saying "These statements have not been evaluated by the FDA," like they do with many other things, and move on with your life.

Mark Bahner writes:
So slap a label on it saying "These statements have not been evaluated by the FDA,"...

Or even, "The FDA has rated this product as 'not acceptable' due to potential liver, kidney, bladder, heart, and lung damage."

Just like Consumer Reports rates products as 'not acceptable,' but people still have the opportunity to buy them.

Charley Hooper writes:

@Nathan W,

You've created an example to prove that companies could market stupid products absent the FDA. That's true. But your product is so flimsy that few, if any, people would try it.

How about something more realistic?

Your young son has a lethal form of muscular dystrophy. He will be confined to a wheelchair and will probably die before age 25. A company has developed a drug for this condition and, in a clinical trial, 10 of 12 boys were still walking after four years on the drug. Not one child in the trial suffered a serious side effect.

Would you put your child on this drug or simply watch him wither and die? The FDA hasn't made a final determination, but an advisory committee voted against the drug, meaning parents and physicians will not even be allowed to consider using this drug on their children.

They voted for "wither and die."

michael pettengill writes:
The second change we propose is to allow drug companies to sell drugs that are not FDA-approved as long as the drug company states clearly, in large letters, in the package insert and on the container in which the drug is sold, "This drug has NOT been certified by the FDA."

That is insufficient disclosure.

I suggest "This drug has not been certified by the FDA because no evidence has been provided demonstrating it is safe and not more harmful than not taking this drug, and all claims we make for this drug are motivated by profit, not by any care for your well being and good health. At worst, we are motivated do-gooders who think we know what is best for you because we are wealthy liberals."

I note the misrepresentations made to doctors by the manufacturer of oxycontin of its non-addictive properties leading to its domination of the pain killer market in less than a decade of heavy marketing. Countering the demand created by that drug promotion led to drug store robberies and now substitution of heroin and Fentanyl-laced heroin.

(If drug marketing isn't responsible, Wall Street is filled with lots of idiots who are willing to support wasting hundreds of billions on wasted marketing.)

Pajser writes:

Not Sure - people do not have to pay fine personally. The state can chose part of their property and - destroy it. If state needs money from that fine, it can press brand new money in amount of fine.

Production in capitalism is never only production, like it would be on desert island. It requires exclusive access of the organizer of production to resources. Such exclusivity can be ensured only through threat of force or actual force against people who would otherwise, use these resources as well.

James - you are right. The states in practice do not minimize violence.

Booker DeWitt - I have counterexample for your short definition of violence. If "physical force intended to damage something is violence," then demolition of the chimney with intention of building something else on that place would be violence too.

I have counterexample for your interpretation of WHO definition too. If every use of force that causes psychological harm is violence, then printing of the book "Obama is bad president" which caused psychological harm to Obama would be violence too. You ignored part "against oneself, another person ..."

Booker DeWitt writes:

@pasjer-

Your counterexample doesn't work because it doesn't address my definition (same with your WHO example). Please retry.

Charley Hooper writes:

@michael pettengill,

You would like to have efficacy and safety data for the medicines you take. That's fair. But what about all the other products you buy? Do you have hard data that proves the Honda Civic you bought is better than a Chevy Cruze? Do you have hard data that eating at Olive Garden is better for you than eating at Chili's?

And if not, how did you ever manage to buy a car or decide on a restaurant?

And don't tell me that your choice of cars and restaurants doesn't matter. People die regularly in auto crashes and from contaminated food. So how do you protect yourself from such calamities in the absence of hard data vetted by a government agency?

Tom West writes:

So how do you protect yourself from such calamities in the absence of hard data vetted by a government agency?

Actually, not wanting to have to bother assessing the risk ourselves, we *do* have the government enforce a raft of safety requirements of both food and cars.

For better or worse, most of the time the populace shows a fairly consistent preference for convenience (Do I have to know whether this is safe or not? No, the government wouldn't let something unsafe be sold...) over freedom of choice.

While I personally prefer the convenience side of things myself (one less responsibility is one less responsibility), I'm happy to see some pull for the freedom side of things to prevent total nannyism.

Pajser writes:

Booker DeWitt - it is true that my example (book about Obama which made psychological harm) doesn't satisfy WHO definition of violence, but I never said it does. That example breaks same element of definition as your example (government destroying private property) - there is no physical force or threat of force against person. Example was designed to show that force or threat of force against person is necessary element of violence.

Charley Hooper writes:

@Tom West,

I muddied the water by discussing both safety and efficacy. Let's talk purely about efficacy and the proof thereof. Why do we allow the FDA to keep safe products off the market when these drugs don't yet have any proven efficacy toward a particular disease? We don't let the government do that for cars or restaurants, right?

Tom West writes:

I suspect it's because the outrage level of having a medicine that fails to do what it's supposed to do (even if it doesn't harm you) is way higher than having a car or a restaurant that fails to do so.

Simply put, the higher the stakes, the more the populace demands to be protected from the possibility of making a bad decision, even at the cost of being unable to make good a decision.

I think Libertarianism requires one to be willing to accept freedoms that make you less well off (I'm not an expert, don't want to become an expert, and now must exert effort into making a good decision) in order to enjoy freedoms that you *can* exploit.

Unfortunately, appreciation for that trade-off seems to be growing increasingly rare.

David R. Henderson writes:

@Tom West,
I think Libertarianism requires one to be willing to accept freedoms that make you less well off (I'm not an expert, don't want to become an expert, and now must exert effort into making a good decision) in order to enjoy freedoms that you *can* exploit.
But that’s why Charley’s and my solution is such a good one. Those who don’t want to do any thinking can just look for the FDA seal of approval (or warning that the FDA has not approved.) Others can look for other information.
I suspect that what’s really going on here is status quo bias. It’s hard for people to conceive of life without the FDA monopoly because no one born after 1937 lived in such a world.

Peter Gerdes writes:

There is serious danger of market failure for drugs. In many cases the information generated by FDA efficacy/safety studies is much more valuable than access to the drug itself. However, we already see that when a drug is available off-label frequently no one has the incentives to perform these expensive trials. Since insurers have every incentive to free-ride on the studies funded by their competitors and manufacturers won't want to risk negative results there isn't a good mechanism for market funding of such studies. (Manufacturers will continue to study a drug until their asymmetric information suggests that further public studies will lower expected profits which is a huge component of the value of such studies).

Worse, the nature of a double-blind trial means that once a drug is legally available every potential patient will strictly prefer definietly taking or not taking the drug to participating in the trial (and for serious conditions no plausible payout will be enough to attract participants).


--------
Maybe a two-tier system where while any individual can legally use any chemical compound but the government sets mandatory standards for insurance coverage (basically solving the tragedy of the commons for insurance providers)?

Maybe simple direct government funding of efficacy studies? But this is dangerous as it risks totally blocking medications that cut against the conventional wisdom.

It's a hard question

Peter Gerdes writes:

@Tom West,

Because keeping safe products with unknown efficacy off the market is the only way (without massive system change) to incentivize participation in and funding of the efficacy studies that provide us so much utility.

Insurers would face a tragedy of the commons situation in funding such studies and a disincentive to study potentially profit-reducing new medications. Manufacturers would only perform studies until their asymmetric info suggested further studies would be an expected negative but much of the value of efficacy studies is exactly discovering that a drug with persuasive but limited efficacy data isn't actually efficacious.

Ken writes:

Peter Gerdes,

"There is serious danger of market failure for drugs."

There is serious danger for market failure in any market. And there is serious danger in government failure in any market. The difference between market based solutions and government solutions is that market solutions are solved by introducing more alternatives, while politicians "solutions" are to eliminate politically "incorrect" alternatives. The latter presumes that if X is bad in one situation, it must be bad in all. This of course is absurd.

"In many cases the information generated by FDA efficacy/safety studies is much more valuable than access to the drug itself."

In many cases the information generated by FDA efficacy/safety studies is much less valuable than access to the drug itself.

But even more than this, the FDA should not be imposing their trade offs on you. That given the available information, a government bureaucrat does not think having access to the drug is worth it to him in no way implies given the available information having access to the drug is not worth it to anyone else.

"Maybe a two-tier system where while any individual can legally use any chemical compound but the government sets mandatory standards for insurance coverage (basically solving the tragedy of the commons for insurance providers)?"

Why do you presume politicians and bureaucrats have access to better information than everyone else, thus are eager to hand over your liberty to choose to politicians?

"It's a hard question"

It's really not. The reality is that you know nothing about me, my situation, my needs and wants, my health, my age, and what I'm willing to trade off, thus you have no business deciding for me what drugs I can and can't have.

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