Posted: August 24th, 2010 by Militant Libertarian
As promised this evening, I have brought forth a topic that I am a little excited to have some of you folks, who are so entrenched in your beliefs about regulation and government’s necessity in the realm of business, sink your teeth into and debate here at SUFA. I will allow the topic to rest on its own for two days until Tuesday night’s open mic (simply meaning I won’t be posting a new article on Monday night). I have spent the last couple of years debating with folks here and elsewhere that I believe that the market could take care of things better than the government. I don’t actually feel that there is any question as to the validity of that statement. The government hasn’t met a regulation that has worked. Sure some of them make small improvements in some areas, but the problem is that the unintended consequences seem to always negate any good that comes from regulation. Nowhere is this more evident than in the world controlled by the Food and Drug Administration. Not only is regulation completely ineffective in that realm, but the unintended consequences are devastating to a society that has the potential to be much farther down the path of better health than the FDA has allowed.
So what I am going to offer here is my vision for the elimination of the Food and Drug Administration. I cannot claim that all of what I will say here is 100% mine. It is the result of reading many different ideas and having many different discussions with people over the years. I wish I could name every person who had a thought that contributed. Some of them are in books (John Stossel, Hayek, and Andrew Napolitano for example), while others I knew only as “that guy I talked to while waiting for the Metro in DC.” Now let me first address the concept that I am espousing here:
I fully understand that we cannot eliminate the FDA tomorrow and think that everything is going to magically transform and the private markets are going to have instant solutions. I also understand that the idea of doing so simply scares the poo out of anyone who still, in their own mind, cannot grasp the concept of a world without government regulation. That means that any proposal that would take this drastic step would be shouted down by the same type of people who sound the alarm that without government intervention the climate will change, Bill Gates will buy the Presidency, and Coca-Cola will go back to putting Cocaine in their soft drinks.
That is why what I offer is a two-step proposal. We will get to the two steps in a bit. Step two is actually quite simple. It is nothing more than eliminating the FDA. But in my opinion we have to do step one first. Before I get to explaining step one, I thought the first relevant thing to do was justify why this is necessary at all. I made the claim above that the FDA is the best example of how unintended consequences negate any good that comes from regulation. I am going to provide a few reasons why I believe this. It will be a sort of justification for the elimination of the FDA in the first place. After all, you don’t go changing things all willy-nilly. There has to be a need for changing things in order for the private market to take action. If a need doesn’t need to be filled, the private market doesn’t fill it. But there is plenty of need to eliminate the FDA.
The Food and Drug Administration was formed in 1906 by Teddy Roosevelt as part of the Food and Drug Act. Many of the regulatory powers associated today with the FDA were granted via the 1938 Food, Drug, and Cosmetic Act. Currently the FDA is responsible for “protecting and promoting public health through the regulation and supervision of food safety, tobacco products, dietary supplements, prescription and over-the-counter pharmaceutical drugs, vaccines, biopharmaceuticals, blood transfusions, medical devices, electromagnetic radiation emitting devices, veterinary products, and cosmetics.” The agency was meant to do good. It was formed as it currently exists a result of some public outcry over interstate transportation of food that had been doctored and a 1937 Elixir Sulfanilamide tragedy, in which over 100 people died after using a drug formulated with a toxic, untested solvent. See, even then progressives knew how to take advantage of a crisis.
Over the years the size and scope of the FDA did what every government bureaucracy does: grow out of control. Let’s start with the operating budget which taxpayers would no longer be responsible for. Last year’s operating budget for the FDA was 2.4 Billion dollars. That a nice chunk of change. But that is only a fraction of the actual costs to consumers. Drugs in the United States are some of the highest priced in the world. Financially strapped folks in the US break the law to get the same drugs for less money from foreign companies in Canada and Europe. I would suggest that simply lowering the costs of drugs would be reason enough to eliminate the FDA.
Henry I. Miller, a former FDA official, presented a crushing analysis of the FDA’s regulatory process and procedures. In his early 2001 editorial commentary, Dr. Miller noted that the total time it takes to develop a new drug and get it to market had doubled since the 60?s. He also noted, “Costs are spiraling out of control because the FDA meddles endlessly in clinical trials and keeps raising the bar for approval.” Furthermore, he cited statistics that showed the average number of clinical trials per average drug increased from 30 in the early 1980?s to 68 during the 1994–95 period while the average number of patients in clinical trials for each drug more than tripled! As expected, the average time required for clinical trials for a new drug rose from 85 months in the first half of the 1990?s to 92 months in the last half of the 1990?s. (found here )
Most estimates on the cost of getting drugs to market is roughly $1.3 Billion per drug. Is it any wonder that our drugs in the US cost so much. Add to that the fact that only about one fifth of drugs that enter Phase one testing ever actually make it through clinical trails and go to market (DiMasi and Grabowski, 2007). That means that for every drug that makes it to market, drug companies have spent approximately $6.5 Billion in R&D, the vast majority of which goes to meeting FDA guidelines. Any other questions as to why Canada can offer the same drugs to consumers at roughly a quarter of the cost? Now just think of putting thosecosts back into the pockets of American consumers. It would certainly be better for economic stimulus than the bullshit plan that our government dolts keep trying to ram down our throats. Need any more reason to eliminate the FDA? I didn’t think so. But you know I am going to give you more anyway….
How about the fact that the FDA KILLS PEOPLE. You bet your butt they do. By stripping away the rights and freedoms of dying Americans, the FDA is a death sentence for terminally ill patients with little hope. Allow me to offer an example. Suppose you have cancer and are told that unless a new treatment comes along, you are going to die in 2 years maximum. You try everything that the health industry has to offer. There is a new experimental drug that shows great hope. You are down to a year left. It enters the clinical trial phase. The drug should be approved in 8-12 years. It won’t save your life. You know why? Because despite the fact that you are going to diewithout that drug, the FDA won’t allow you to have it because they want to protect you!
Suppose that new drug is going to cure a disease that kills 20,000 people a year. In ten years the FDA will come out and proudly proclaim that they are approving a drug that will save 20,000 lives a year. No one will even ask them about the 200,000 who died over the last ten years waiting for the FDA to approve a drug that would have saved their lives (and yes I am aware of the case by case “exceptions” that allow a dying patient to take the drug, but why should anyone be able to tell a dying patient that they have to be approved to take it, that they have to wait 6 months for approval, or that they have to be monitored by the FDA? They are DYING). Remember that the FDA doesn’t not care one bit about the lives of the people who may be saved by a new drug. They care only about those who may be possibly hurt by one.
And let us not pretend that the FDA’s processes, which increase the costs of food, drugs, medical devices, and the rest of the stuff they do, actually work. While that doesn’t seem to be a prerequisite of any government agency or regulatory authority, that doesn’t mean we should be accepting it. The FDA routinely fails at the only task for which they supposedly exist. How many food recalls due to sickness have we had in the last couple of years, as in the case of 1800 people sickened by eggs last week? Ten cases? Twenty? What about drug recalls because the interactions that were supposed to be tested for were simply not a part of the ridiculous requirements for FDA approval (Fen-Phen or Vioxx anyone?). I could list examples all day long here, as you all well know. The point is that the world approved by the FDA is not a safe one, despite the massive price we pay to live in that world. Can you imagine accepting a doctor telling you that for $10,000 he will guarantee that the drug you take is safe, only to find that once you pay him he admits that there is a 10% chance the drug isn’t safe? You would demand your money back.
Despite the FDA, the estimates are that somewhere around 750,000 people a year die as a result of medical mistakes. From an article about a groundbreaking book: Since Americans spend so much money on health care, they should be getting a high quality of care, right? Unfortunately, that’s not the case. Of the 783,936 annual deaths due to conventional medical mistakes, about 106,000 are from prescription drugs, according to Death by Medicine. That also is a conservative number. Some experts estimate it should be more like 200,000 because of underreported cases of adverse drug reactions (found here ). These are numbers that dwarf the number of deaths from automobile accidents or any other form of accident combined. Yet the FDA persists, continuing to suffocate the American economy.
I could continue on with all the reasons why the FDA should not be allowed to continue in the United States. But I think that the massive increase in costs, the number of lives lost, and the absolutely ridiculous inability to deliver on their stated promise offers more than enough evidence that the FDA should be eliminated. So we can argue about what I have presented to this point, but I do think you are going to have an awful tough time convincing anyone that the FDA does a great job and is overall a benefit to us as Americans. It isn’t. It has to go. But as I said, many Americans are simply too enamored with government and too bought in to the mistaken ideal that we need government to do this job to simply eliminate it tomorrow. So we need an initial step that will get us from where we are to a place where Americans will be comfortable with eliminating the FDA. That step is simple. It is an easy fix and it doesn’t require anyone in America to give up their beloved FDA protection without a proven alternative in place.
We need to make approval by the FDA on anything….. voluntary.
Allow anyone who wants to bypass the FDA to do so. You can put a required warning on the non-FDA approved stuff so that no one is fooled into thinking otherwise. But make entry into the market easier by not requiring new entrants to submit to the ridiculous and unnecessary protocols of the FDA. Then get out of the way and let the private markets do what they do best. What do the private markets do best, you ask?
They solve problems. Plain and simple. They meet the demands of the consumer in order to turn a profit. And because they are not protected by the federal government like FDA approved companies are, they will work harder to ensure that they produce solutions that are safe and effective. And they will do it at a fraction of the cost that it is being done today. And they will do it in a fraction of the time that it is being done today. Let’s break down how the market will do this.
No matter what the need is in the market, if the government doesn’t restrict entry (such as the FDA does in this case by making it a law that you have FDA approval), the market will provide it ten ways from Tuesday. Multiple companies will enter the market offering multiple different ways of doing things and providing multiple solutions to the medical problems that consumers face. Barring a restriction to entry, as mentioned, the market does this 100% of the time. If there is a market for a product or service, the free market will always, without fail, fill that need. That is a fact that simply is not debatable. Every service or product that is needed to replace the FDA will appear in the free and private market if allowed.
No company wants to put out an inferior product in a world where trial lawyers are vultures looking for multi-million dollar claims against a company that puts out drugs or medical devices. Doing so would be economic suicide for the company. They simply would not survive without government protecting them (and government wouldn’t protect them because government wants you to use the FDA!). So they would be taking every step possible to test and re-test their product so that it will pass muster in a lawsuit. In this way the free market is the regulation needed to keep companies in line. Let’s not forget that there is always the FDA approved products to fall back on if companies fail to meet the standards demanded by the public. With that in place the market will prove that it can self regulate. If it doesn’t, the FDA wins and survives.
The private market would also produce an alternative to FDA approval. We have such a device already for many other industries in services like Consumer Reports. There will be a need for some sort of authority to tell the public what is safe, effective, and trusted. A sort of consumer reports for drugs not approved by the FDA would develop. Where would the people come from? We already have them. Medical experts that testify in trials for or against medical companies and drug companies would do the job. Why? Because the market would exist and the need would be there, and what comes with demand? Money. I would start such a company and offer a one million dollar award no questions asked if it is shown that the advice that my company offered contributed to to a patient death. People would flock to pay for my low cost service because of the money I would save them by directing them to drugs that cost less money because companies are operating without government bureaucracy. The FDA already has fees associated with submitting a drug for review, and they get about $300 Million a year doing so. Apparently the drug companies have no issue paying to have their drugs reviewed. I will charge less than the FDA. And do it better.
My seal of approval would be well known and respected. Malpractice insurance companies would require doctors to use either FDA approved or USWeapon Sealed products. However, doctors and patients would be free to seek an exemption from their insurance company, and the doctor or consumer in cases where there is a new, but not-yet approved or “sealed” drug or device, that might make the difference between life and death. See, that is the true point in all of this. It offers people the option of using their own judgement in decisions around their own health or the health of their patient. The free market would also result in insurance companies having incentive to offer consumers no-fault liability insurance for medical malpractice, including the use of medication and medical devices that have not gotten a USWeapon seal of approval or FDA approval. And consumers would have a strong incentive to purchase such insurance.
You see, making the FDA voluntary gives the free market (and remember we have to let it be a FREE market)the opportunity to prove its worth while still having the FDA around for a backup in the slim chance my idea doesn’t work. But my idea would work. You will all have the ability today and tomorrow to tell me where I am wrong. But I don’t think that I am. Over time the free market side would bury the FDA side. They would do things better, faster, and more efficiently, the way that the market already does. Consumers will learn new habits rather than sitting back and relying on government to protect them. They will, after all, have a significant financial incentive to do so. And after a while, people will realize that we never really needed the government in this business at all. We just needed them to get the hell out of the way of the market.
Or I will be wrong and the progressives will have all the ammunition that they need to have another hundred years of increasing tyranny and costs via regulation. What have they got to lose? Oh, that’s right…… control.
And to wrap this up I want to talk about why we should be pursuing this course of action in the first place. There are the obvious answers: costs, effectiveness, and efficiency. I covered those above. But those are irrelevant, at least in my eyes, when placed against the real reason why we should do this. We should do it because it is the right thing to do. We are a country founded on the ideals of liberty and freedom. As such, there is absolutely no justification for government taking our free will away from us. If I want to try an experimental drug or device, it is my right to do so. I don’t want government protecting me. They do a shitty job of it. I believe that a free market solution could do it better. And I should have every right to use a free market system. I am not advocating an immediate suspension of your right to rely on government. You are more than welcome to waste your money doing so. I will buy your boat when you can’t afford it anymore.
What I am advocating is that government get out of the way and allow Americans to use the freedom and liberty that is ours by birth, not by government grant. The government monopoly on protecting us must end. It simply is not in line with the principles of freedom we were founded on.
So what do you say, US government? Are you up for a little challenge? Get your slow, expensive ass out of the way and let’s see if you can compete with my beloved free market. Winner takes all. Loser folds up shop. I am sure the free market will offer you a great price for those buildings you won’t need when this is all over.