October 23, 2015

Replacing the FDA

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The Food and Drug Administration discourages and prohibits medical devices that could save lives and ease suffering. The agency has always had an anti-innovation bias, but today's Cambrian Explosion of medical technologies increases the cost of that bias and limits the agency's ability to judge, evaluate, and control new devices.

Those seeking corrective measures usually round up the usual suspects: sleeker regulations, a revamped organization chart, and more taxpayer dollars. In contrast, my colleagues Richard Williams, Adam Thierer, and I believe the FDA is unfixable so long as it retains its current monopoly on device approvals. We would entrust the task of safeguarding medical devices' safety and efficacy to competing entities — decentralized, privatized, and specialized — at least for low- and medium-risk products. The European Union already has such a system.

In the FDA's earlier days, medical data was difficult to acquire, process, and disseminate. A moderate pace and scale of innovation, manufacture, and distribution made it manageable for the FDA to monitor compliance. My colleagues and I are sympathetic to some of the agency's early critics — Milton Friedman, in particular, noted that the FDA would be vilified if it approved a product that killed 100 people, but not if it failed to approve a product that could have saved 100,000. But we acknowledge that in the 20th-century environment, the FDA's mission and structure were defensible.

As the century progressed, however, Congress extended the FDA's mission — which had originally been to protect the safety of food and drugs — to include ensuring the efficacy of both drugs and devices. And now, Internet-era innovation has moved us from a slow-moving world of scarce data to a speed-of-light world of superabundant data. Genomics, telecommunications, wireless telemetry, 3D printing, nanotechnology, computing, and Big Data offer unprecedented opportunities for health care and overwhelm the FDA's Industrial Age design.

Through much of the 20th century, patients — and even their doctors — would have found it difficult, laborious, and time-consuming to find information on the safety and efficacy of a drug or device. Today, however, the Internet puts answers seconds away. The quality-control mechanisms that gave us a safe system of e-commerce are beginning to coalesce around health care.

Importantly, the process of innovation and diffusion has also changed fundamentally. A new device no longer requires enormous capital, distribution infrastructure, and auditable accounting. Instead, profound innovations occur at the micro-level.

Recently, the father of a diabetic child programmed a smartphone to remotely monitor his daughter's blood-sugar levels. In Uganda, amateurs configured smartphones to monitor the heartbeats of expectant mothers and their unborn children. Inexpensive apps can now perform and analyze electrocardiograms. Whatever one thinks of 20th- century regulation, the FDA cannot maintain its grip on safety and efficacy in our era. Like it or not, permissionless innovation has arrived for medicine, and the challenge is how to deal with it.

The FDA, the troubled legacy of a bygone era, is poorly suited to this task. Its centralized, hierarchical monopoly overwhelms device developers with a smog of uncertainty over timelines, bureaucratic vagaries, and compliance costs. The agency cannot adequately monitor and control the burgeoning menagerie of low-cost, open-source, home-brewed devices passed peer-to-peer. It is impossible to constrain the international flows of such goods anyhow.

Patients and providers need information on safety and efficacy, but an industrial-era regulatory factory like the FDA cannot do the job. The search for a 21st-century replacement should begin with the European Union.

The EU has no FDA. Instead, it has a constellation of "notified bodies" — competing private entities that review medical devices the way a safety and testing company like Underwriters Laboratories reviews electrical devices worldwide. Like the FDA, notified bodies don't wish to release devices that harm patients; doing so puts their reputations at risk and carries the threat of legal action. But unlike the FDA, competition among notified bodies incentivizes them to make the approval process economical, predictable, and expeditious. A notified body resembling the FDA would find device-makers bypassing it in favor of its more efficient competitors. A developer has to gain approval by just one notified body in order to distribute devices all over Europe.

Notified bodies have a time-honored antecedent. Since the 1700s, safety of shipping has been certified by competing "maritime classification societies." This 250-year-old model has been remarkably successful and resilient.

The EU model is an admirable starting point for rebuilding America's device-evaluation infrastructure. The FDA's successor organizations will never have the command-and-control capability that FDA once enjoyed. New organizations will have to rely more on a regime of commend-and-cajole — persuading patients and providers that they have something worthwhile to say and then providing high-quality information to their listeners.