Is the FDA Safe and Effective?

Professor Alex Tabarrok (of Marginal Revolution fame) gave a presentation to the GMU Econ club today on the topic of “Is the FDA Safe and Effective?" During it, Dr. Tabarrok examined the effects the FDA has on human life due to delaying the adoption of new drugs and medical technology.



According to Dr. Tabarrok, there are two types of errors the FDA faces. Type I errors allow bad drugs onto the market that can harm people who take them. Type II errors prevent good drugs from going to market and cause deaths and loss of health by preventing access to drugs. Both types of errors can be very deadly. The incentives the FDA has are not symmetric between the two error types and leads the FDA to commit far more Type II errors than Type I errors. According to Dr. Tabarrok, Type II errors are most likely even more deadly than Type I.

Some of the key differences between these two types of errors include:

1. We can see the faces of the victims of Type I errors. We never know what lives might have benefited if a Type II error had not occurred.
2. Type I errors allow for self-correction and learning to take place by responding to ineffective and harmful medicines. This learning process is a key part of developing new advances in medicine. Type II errors are not self-corrective and prevent this learning process from taking place.

Here’s one of the graphs Dr. Tabarrok used in his presentation that really struck me. It shows the effect of a key legislative change that occurred in 1962 that gave the FDA far more expansive powers and responsibilities. The upper line in the graph shows how many drugs were expected to be approved in each year, while the bottom line shows how many were actually approved. You can see that the drugs approved after 1962 were approximately 25% of the expected amount.



One of the key changes that happened after 1962 is that the FDA began requiring efficacy tests for all medicines and medical technologies brought to market. What this means is that the firms developing these technologies had to prove that they were not only safe, but also that they were effective. This sounds like a lofty goal, but it is very problematic in medical research. Clinical trials can often take years or decades to complete. Large-scale tests are expensive and many times inconclusive.

For example, imagine two groups of 1,000 people are tested in a multi-year trial – one as a control group and the other being given the test treatment. If the people in the control group have six deaths caused by heart attacks during this time and the trial group has nine deaths from heart attacks, is this difference caused by the medicine or by statistical variation in the population? In many cases, it is extremely difficult or impossible to tell. Without this kind of proof, the FDA is very reluctant to let new drugs come to market. You can see where this could delay many products and exponentially raise the costs of bringing them to market. The result? Needless deaths and misery due to unnecessary delays.

Dr. Tabarrok laid out a very convincing case for giving doctors and patients the right to choose the medicines they want to take, weighing the risks and rewards themselves. He sees the FDA as having an important role in operating like a “Consumer Reports for Medicine”, giving accurate information on the extent new drugs have been tested for their effects. He also thinks the FDA should play a role in testing the safety of drugs and reporting this information, but no role in requiring the testing of their efficacy.

The current system puts a huge brake on innovation and discovery of new drugs and medical technology. It also prevents many new technologies, medicines and techniques from coming to market. Interestingly, once a drug is approved by the FDA, there is no limit to its ability to be used for “off-label” purposes. (Treating maladies unrelated to its original purpose and that have not been reviewed for efficacy.) This brings up the important question of if a drug can be used in this way, why should it need to meet any kind of efficacy test before going to market in the first place?

As an economist-in-training, I am in complete agreement with Professor Tabarrok and hope to see limits in the power and reach of the FDA. I believe a system in which the FDA provides accurate information to patients and doctors who are then able to choose medicines for themselves would be far superior to a system in which a central agency makes those choices for them.

Hats off to Professor Tabarrok for a great presentation! I would love to see GMU professors giving more presentations like this and also more debates like this one.

See much more about the FDA on Professor Tabarrok’s and Professor Klein’s website: www.FDAReview.org.