Exploring the Efficacy of FDA Reform

Jan 21, 2005


Dr. Alex Tabarrok
Professor of Economics
George Mason University 

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It appears that the 109th Congress will give serious consideration to overhauling the current U.S. drug approval process and the role of the Food and Drug Administration. In addition to basic questions about safety, efficacy and pricing, policymakers have raised concerns about off-label prescriptions, user fees, and reimportation restrictions.

Any change to FDA functions and processes, however, requires a deeper understanding of its history. Dramatic tragedies, such as Thalidomide birth defects, have enhanced the FDA’s responsibilities over time, but they have also unleashed a series of unintended consequences that might not always be in the best interests of patients. Greater FDA authority has resulted in longer waits to approve drugs for people who are already sick and increased costs of production. Efforts at cutting the approval time, however, have resulted in the endorsement of potentially dangerous drugs. Caught in a situation where there are seemingly risks no matter what is done, how can policymakers design the most effective health system that minimizes risk for everyone?

All of this complexity, with its visible human costs, has led many health economists and researchers to ask if there is a better way to deliver health benefits to the population. By looking at the insights of economists who have studied this dilemma, this seminar will seek to answer such questions as:

• What are the most serious problems with the current system?
• Is off-label prescribing a dangerous practice or a necessary and important aspect of modern medicine?
• What is the history of our nation’s drug policy and the FDA? What lessons can we learn?
• Can we achieve safer health treatment options at lower costs?
• What do the lessons of economics tell us about how to improve the system?

Since the costs of maintaining the current system can be measured in lives, not just dollars, it is important that policymakers know how this situation developed and how different scholars believe it can be reformed.