If you were suffering from a serious disease, would you prefer (a) that you and your doctor decide how to treat your ailment, selecting from all existing medical goods the ones that offer the best combination of benefits and risks, or (b) that you and your doctor select from all medical goods except those—probably the most promising ones—that a low-level government employee in Rockville, Maryland, has decided to withhold from you? The answer is obvious. Rational people would never consider themselves better off because their range of choice had been arbitrarily limited.
Yet such restriction of consumer choice, affecting both patients and their physicians, fetters consumers at all times in the United States. The Food and Drug Administration (FDA) alone decides whether a newly devised medical good (either a drug or a device) may be sold. Many potentially beneficial goods remain on the shelf for a decade or more while their manufacturers traverse the rigid and elaborate testing process required by the FDA before it will approve marketing. While innovative medical goods run the bureaucratic gauntlet, people who could have benefited from their use suffer and die unnecessarily.
Defenders of the government’s actions insist that, without the FDA’s regulations, greater harm would occur. Consumers would suffer from the toxicity or adverse side effects of unsafe products, or they would squander their money on useless remedies. Consumers can avoid these injuries if they are permitted to use only medical goods that have met high standards of safety and efficacy by passing successfully through the FDA’s required testing. In testimony before a Congressional committee an FDA official said:
The allegation has been made that the cost to our society to prevent a thalidomide-type tragedy far exceeds the benefits of a regulatory system developed to prevent such a tragedy. We disagree. We believe that benefits which accrue to society because of our regulatory system are worth the cost and far outweigh any risks.
The statement, which expresses the agency’s standard line, is remarkable in at least five ways.
First, it uses the most notorious medical tragedy of modern times to illustrate what, presumably, the FDA’s regulation routinely prevents. The presumption is indefensible. Except in a freakishly unlikely case, one may not reasonably assume that an unrestricted manufacturer would sell a medical good giving rise to a “thalidomide-type tragedy.” Besides their ethics, manufacturers have good financial reasons, including product liability judgments and loss of consumer confidence, to be careful about what they place on the market.
Second, the statement stands alone, without any attempt to demonstrate that the lives saved and the suffering prevented exceed the lives lost and the suffering endured as a result of the FDA’s regulation. It is merely a naked declaration, which the audience presumably should accept because it emanates from the self-proclaimed “experts.”
Third, the statement speaks of the benefits and costs of the regulation as if they were experienced by society at large rather than by specific individuals who differ enormously in their personal valuation of the costs and benefits and in their willingness to bear risk. It rests upon the unspoken assumption that a single rule should apply in all cases, mocking the actual heterogeneity of people’s preferences and medical conditions.
Fourth, the statement confidently declares “we disagree” and “we believe” while describing the balance of benefits and costs experienced by others. But only specific individuals can possibly know whether the benefits to them outweigh the costs to them. Neither the benefits nor the costs can be objectively assessed by third parties; nor may the benefits and costs experienced by many individuals be aggregated into total or “social” valuations and thereby made com parable. There is no common unit of account in which the aggregation may be made. Who knows how to measure the depth of one person’s fear, the breadth of another’s relief?
Fifth, the statement presumes an answer—the wrong answer—into the question posed by AIDS activist and FDA critic Martin Delaney: “Who should decide which risks are acceptable—the bureaucracy in Washington or the patient whose life is on the line?”
The Regulator’s Incentives
The people who make decisions at the FDA respond to incentives just as people do elsewhere. The bureaucrats prefer to advance in their careers; they do not want their incompetence or blameworthiness to be exposed. In their circumstances, FDA examiners may err in two different ways: Type I error, the examiner does not approve a product that is safe and efficacious; Type II error, the examiner approves a product that is not safe or efficacious. Naturally the examiners want to protect themselves from criticism arising from their commission of errors.
The examiners’ incentives to avoid a mistake, however, differ greatly for the two types of error. As a former FDA inspector described the situation:
Any time you approve a new drug you’re wide open for attack. If the drug turns out to be less effective than the original data showed, they can nail you for selling out to a drug company. If it turns out to be less safe than anybody expected, some congressman or a newspaper writer will get you. So, there’s only one way to play it safe—turn down the application. Or at least stall for time and demand more research.
Because of such demands for more research, new drug applications now commonly consist of two or more volumes of summary data and as many as 100 volumes of raw data—sometimes more than 100,000 pages altogether. Although such heavyweight requirements help an FDA examiner to “play it safe,” they often result in much avoidable suffering and many deaths among the patient population awaiting access to the good.
Unfortunately, the news media, members of Congress, and self-described consumer advocates almost never hold the bureaucrats responsible for these “invisible” or “statistical” deaths. Hence the cost of a single bureaucrat’s career insurance may be, and in some cases surely has been, tremendous sacrifice of human health and life.
Lives Saved, Lives Lost
Consider, for example, that from 1963 to 1973 “the FDA’s doors were essentially closed to cardiovascular drugs,” even though cardiovascular disease was the leading cause of death in the United States and rapid advances were occurring during those years in pharmaceutical therapies. Beta-blockers, an especially valuable class of drugs, awaited FDA approval for a decade after they were first used abroad. Dr. William Wardell, a professor of pharmacology, toxicology, and medicine at the University of Rochester, estimated in 1979 that a single beta-blocker, alprenolol, which had already been sold for three years in the strictly regulated Swedish market, could have saved more than 10,000 lives a year in the United States.
Other examples given by Wardell include “years of delay in the availability of at least four respiratory drugs (metaproterenol, terbutaline, cromolyn sodium, and beclomethasone inhaler)” that caused “severe disadvantages to many asthma sufferers” as well as a “six-year lag in the availability of valproate, in particular, and the continued absence of nitrazepam” that “substantially reduced the treatment options for epileptic patients.” Lithium carbonate, an effective drug for the treatment of manic-depressive disorder, was used in 40 countries before its approval by the FDA. A 1980 study by the U.S. General Accounting Office (GAO) examined 14 therapeutically important drugs introduced in the United States between 1975 and 1978. The GAO analysts found that only one of the 14 had become available first in the United States. For the others the lag in availability ranged from two months to 13 years.
Astonishingly, the FDA has given little or no weight to foreign evidence of product safety and efficacy. Nearly all new drugs and devices have been forced to pass through the same rigid, expensive, and time-consuming testing procedure in the United States even though a product might already have been used successfully for years elsewhere.
Economists Henry G. Grabowski and John M. Vernon of Duke University have made many studies of the pharmaceutical industry. Considering the results of their own research along with the findings of other studies comparing the experience of various countries, they concluded that “U.S. citizens have experienced sizable forgone health benefits from regulatory-induced delays in obtaining beneficial new drugs while obtaining relatively modest benefits in the form of less exposure to drug toxicity.”
Perhaps the most damaging consequence of the FDA’s regulation since 1962, when the testing requirements were made much more rigid, elaborate, and time-consuming, is the slowdown in the rate of innovation. In view of the high costs of securing FDA approval to market new products, many manufacturers conclude that otherwise promising R & D projects will not be profitable. As a result beneficial new drugs and devices are never created. Suffering and death that might have been prevented continue unabated. Of course, since the innovations never come into existence, hardly anyone appreciates that they have been sacrificed on the altar of regulation.
Destroying the Rule of Law
The “rule of law” means much more than the requirement that the legislature authorize an exercise of power by the executive branch of government. As classical liberals understand it, the rule of law requires that the law be clear and understandable, that penalties for violations be predictable, and that the law be applied equally to everyone, including members of the government. The FDA’s actions, though broadly sanctioned by legislation, fail to satisfy these criteria. In stark violation of a genuine rule of law, the FDA’s actions are frequently arbitrary and capricious—sometimes even blatantly unconstitutional, as when they restrict freedom of speech and the press.
In the medical device industry, where the FDA has conducted a jihad during the past two years, manufacturers remonstrate that their cited violations of the agency’s Good Manufacturing Practice (GMP) regulations often arise because the regulations are vague: “Even companies that genuinely try to comply fully with US GMPs can find themselves cited for violations.” Companies whose products are esteemed by customers have been forced to stop production because their paperwork did not satisfy the regulators.
The Health Industry Manufacturers Association (HIMA) has complained that the FDA “has not made clear the type of data it wants to see.” Therefore, companies must make a series of information submissions, hoping that something will satisfy the regulators. Sometimes the FDA requests one type of study, then changes its requirement and requests another type after the company has completed the first one. HIMA director Alan Magazine describes the device approval process as “a giant guessing game.”
Supplicants can expect no reliable guidance by asking the FDA what is required. The agency does not respond to inquiries expeditiously; when it does respond, the response often lacks substance. Moreover, after years of countermanding the informal advice given to regulated parties, it recently announced that it would no longer be bound by its own formal advice. Indeed, the head of the FDA’s Drug Surveillance Branch has stated:
We used to say that if a company made certain changes, then we would probably not take any action. Now, we won’t. Now, even if they make the changes, they might end up in court. We want to say to these companies that you don’t know when or how we’ll strike. We want to eliminate predictability.
That a “civil servant” would make such a statement is stunning.
Recourse to the courts, which is costly, time-consuming, and full of uncertainty, holds little promise of protection in view of what Wardell has called “the extreme vulnerability of the industrial firm that argues with the FDA.” Without a search warrant, the FDA may inspect a company’s plant and records at any time. Because the regulations are so numerous and so often vague—eight volumes of the Code of Federal Regulations contain those currently in force—inspectors can always find “violations” if they want to. In short, the agency possesses the power to destroy a company at will—to retaliate for past resistance or to make an example—by closing down the firm’s operations or seizing its property.
So much for a genuine rule of law.
The Ugly Face of Paternalism
There is a place for paternalism. It is in the family, where young children are incapable of making wise decisions for themselves and where a parent, linked to the children by bonds of love and responsibility, may normally be relied upon to decide what is best for them. But when paternalism becomes a form of government, when the individual freedom and responsibility of competent adult citizens are suppressed in favor of exclusive decision-making by a central planning board, no one should expect a healthy outcome.
For more than half a century, Americans have been forbidden to make important decisions regarding their own health, decisions upon which each individual’s life and death depend. Of course, we have been assured by those who wield the power that they act only in our best interest. But anyone who makes even a superficial study of the FDA, its regulations, and its congressional overseers quickly discovers that the official line is far from the truth. This government agency, like all the others, is a: political institution, swayed by the ceaseless quest of its leaders for position, publicity, power, privilege, and perquisites, all associated with a big budget and a far-reaching agenda.
It is a mistake to suppose that the FDA acts—or even attempts to act—so that, all things considered, suffering and loss of life are minimized. Instead, responding to the asymmetrical incentives created by the reactions of the news media, certain members of Congress, and so- called consumer advocates, FDA officials systematically strive to avoid Type II errors while disregarding Type I errors. Not relishing the negative publicity sure to follow their approval of medical goods that later cause harm—even relatively slight harm—they adopt the role of obstructionists, requiring ever more stringent, expensive, and time-consuming testing before allowing goods to reach the market. That avoidable suffering and death routinely occur while they drag their feet and protect their careers does not sway them, because hardly anyone holds them accountable for the harm caused by their Type I errors.
But change may be in the wind. Lately, in the wake of the AIDS epidemic, politically organized and media-savvy people have begun for the first time in large numbers to indict the agency for its one-sided policies and to make their voices heard. Martin Delaney, Jim Corti, and their comrades, by immense efforts, finally induced the FDA to hasten the availability of promising new drugs to AIDS sufferers. The Wall Street Journal, with its huge and influential readership, has made its editorial and opinion pages available to critics of the FDA. There James P. Driscoll, representing Direct Action for Treatment Access, charged that the FDA “condemns people with AIDS and cancer to die waiting.” Woodrow Wirsig, an Alzheimer’s activist, reproached the agency because “it cannot act on drugs used safely and effectively in Europe for decades” and thereby “dooms thousands to unnecessary suffering and death.” Dr. William W. O’Neill, director of cardiology at a Michigan hospital, lamented that “many patients are being harmed because we are unable to treat them with devices that can be potentially lifesaving.” Perhaps eventually such voices will reach beyond the Journal to be heard and heeded in Congress.
Until then, however, the deadly toll will continue to mount. The FDA will go on causing untold suffering and thousands upon thousands of unnecessary deaths—killing people to protect their health. 
- Quoted by David Seidman, “The Politics of Policy Analysis,” Regulation (July/August 1977), p. 31.
- Quoted by Jonathan Kwitny, Acceptable Risks (New York: Poseidon Press, 1992), p. 211.
- Quoted by Milton Silverman and Philip R. Lee, Pills, Profits, and Politics (Berkeley: University of California Press, 1974), p. 251.
- Henry G. Grabowski and John M. Vernon, The Regulation of Pharmaceuticals: Balancing the Benefits and Risks (Washington: American Enterprise Institute, 1983), p. 23: David Leo Weimer, “Safe—and Available—Drugs,” in Instead of Regulation, ed. Robert W. Poole, Jr. (Lexington: Lexington Books, 1982), p. 250; Seidman, “The Politics of Policy Analysis,” p. 25.
- William Wardell, “More Regulation or Better Therapies?” Regulation (September/October 1979), p. 26.
- Ibid., pp. 28, 33.
- Ibid., p. 27.
- Silverman and Lee, Pills, Profits and Politics, p. 244.
- U.S. General Accounting Office, FDA Drug Approval—A Lengthy Process That Delays the Availability of Important New Drugs, HRD-80-64, May 28, 1980, p. 68.
- Grabowski and Vernon, The Regulation of Pharmaceuticals, pp. 46-47.
- Clinica 544, March 24, 1993, p. 14.
- Bruce Goldfarb and Doug Wolfberg, “Feds Focus on Medical Devices,” Journal of Emergency Medical Services 17 (July 1992), pp. 45-47; Rami Grunbaum, “Physio-Control Pushes to Revive Itself,” Puget Sound Business Journal 13 (October 23-29, 1992), pp. 1, 45; Clinica 529 (December 2, 1992), pp. 13-15.
- Clinica 543, March 17, 1993, p. 13.
- Clinica 521, October 7, 1992, p. 12.
- “F.D.A. To Toughen Testing of Devices,” New York Times, March 5, 1993, p. A18.
- Clinica 528, November 25, 1992, p. 12.
- Quoted by Murray Weidenbaum, “Pharmaceutical Regulation and Productivity Challenges,” Occasional Paper 113 (St. Louis: Center for the Study of American Business, September 1992), p. 3.
- Wardell, “More Regulation or Better Therapies?,” p. 27.
- The full, fascinating story is told by Kwitny, Acceptable Risks.
- Statements of Driscoll and Wirsig as printed on the editorial page of the Wall Street Journal, February 16, 1993.
- O’Neill, letter to the editor, Wall Street Journal, March 9, 1993.