Is the Food And Drug Administration Safe And Effective?
In the United States, the Food and Drug Administration (FDA) provides public oversight of the safety and efficacy of drugs; medical devices; biologics like vaccines and blood products; cosmetics; radiation-emitting electronic products; veterinary products; and all foods, except meat and poultry (which are regulated by the Department of Agriculture). According to the FDA, the products it regulates account for more than one-fifth of U.S. consumer spending. In the area of medical products, the FDA is responsible for determining whether marketed products are both safe and effective before and after they have been marketed. In this paper, we will explore whether the policies of the agency itself are safe and effective. We stress two issues, one static and one dynamic. The static issue concerns the potential duplication inefficiency when product safety is protected not only by the FDA but also by the private sector through product liability law. Put another way, what is the rationale for using product liability and the FDA to regulate drug safety? While intuitively it may seem that two systems must be better than one in ensuring drug safety, each system comes with costs. We then turn to the dynamic issue, the speed-safety trade off, and consider the extent to which higher safety is achieved at a cost of later market entry of effective and even life-saving products. We assess the Prescription Drug User Fee Acts (PDUFAs), which increased the speed of the agency's regulatory process starting in 1992, although according to some, at the cost of reducing drug safety. We conclude by suggesting a research agenda for future work on the Food and Drug Administration.
Volume (Year): 22 (2008)
Issue (Month): 1 (Winter)
|Contact details of provider:|| Web page: https://www.aeaweb.org/jep/|
More information through EDIRC
|Order Information:||Web: https://www.aeaweb.org/subscribe.html|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- A. Mitchell Polinsky & William P. Rogerson, 1982.
"Products Liability, Consumer Misperceptions, and Market Power,"
NBER Working Papers
0937, National Bureau of Economic Research, Inc.
- A. Mitchell Polinsky & William P. Rogerson, 1983. "Products Liability, Consumer Misperceptions, and Market Power," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 581-589, Autumn.
- Edward L. Glaeser & Andrei Shleifer, 2001.
"The Rise of the Regulatory State,"
NBER Working Papers
8650, National Bureau of Economic Research, Inc.
- Edward L. Glaeser & Andrei Shleifer, 2001. "The Rise of the Regulatory State," Harvard Institute of Economic Research Working Papers 1934, Harvard - Institute of Economic Research.
- Steven Shavell, 2005. "Liability for Accidents," NBER Working Papers 11781, National Bureau of Economic Research, Inc.
- Casey B. Mulligan & Andrei Shleifer, 2005. "The Extent of the Market and the Supply of Regulation," The Quarterly Journal of Economics, MIT Press, vol. 120(4), pages 1445-1473, November.
- Grabowski, Henry G & Vernon, John M & Thomas, Lacy Glenn, 1978. "Estimating the Effects of Regulation on Innovation: An International Comparative Analysis of the Pharmaceutical Industry," Journal of Law and Economics, University of Chicago Press, vol. 21(1), pages 133-63, April.
- Shavell, Steven, 2007. "Liability for Accidents," Handbook of Law and Economics, Elsevier.
- Wiggins, Steven N, 1981. "Product Quality Regulation and New Drug Introductions: Some New Evidence from the 1970s," The Review of Economics and Statistics, MIT Press, vol. 63(4), pages 615-19, November.
- Viscusi, W. Kip, 2007.
"Regulation of Health, Safety, and Environmental Risks,"
Handbook of Law and Economics,
- W. Kip Viscusi, 2006. "Regulation of Health, Safety, and Environmental Risks," NBER Working Papers 11934, National Bureau of Economic Research, Inc.
- Manning, Richard L, 1997. "Products Liability and Prescription Drug Prices in Canada and the United States," Journal of Law and Economics, University of Chicago Press, vol. 40(1), pages 203-43, April.
- Kevin M. Murphy & Robert H. Topel, 2005.
"The Value of Health and Longevity,"
NBER Working Papers
11405, National Bureau of Economic Research, Inc.
- DiMasi, Joseph A. & Hansen, Ronald W. & Grabowski, Henry G., 2003. "The price of innovation: new estimates of drug development costs," Journal of Health Economics, Elsevier, vol. 22(2), pages 151-185, March.
- Spence, A Michael, 1977. "Consumer Misperceptions, Product Failure and Producer Liability," Review of Economic Studies, Wiley Blackwell, vol. 44(3), pages 561-72, October.
- Grabowski, Henry G & Vernon, John M, 1992. "Brand Loyalty, Entry, and Price Competition in Pharmaceuticals after the 1984 Drug Act," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 331-50, October.
- Tomas J. Philipson & Anupam B. Jena, 2006.
"Surplus Appropriation from R&D and Health Care Technology Assessment Procedures,"
NBER Working Papers
12016, National Bureau of Economic Research, Inc.
- Tomas J. Philipson & Anupam B. Jena, 2005. "Surplus Appropriation from R&D and Health Care Technology Assessment Procedures," Public Economics 0511021, EconWPA.
- Manning, Richard L, 1994. "Changing Rules in Tort Law and the Market for Childhood Vaccines," Journal of Law and Economics, University of Chicago Press, vol. 37(1), pages 247-75, April.
When requesting a correction, please mention this item's handle: RePEc:aea:jecper:v:22:y:2008:i:1:p:85-102. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jane Voros)or (Michael P. Albert)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.