Drug Approval Without the FDA

Let’s get something out of the way right from the beginning: what an adult puts into his or her body is their responsibility. They own themselves (libertarian principle of self-ownership) and as such have the right to help or harm themselves as they wish.

If an individual wishes to drink alcohol, or smoke tobacco, that’s their prerogative. No health organization that I am aware of would ever approve consumption of these chemicals, because they are outright harmful. But as self-owners, that’s our responsibility, and nobody else’s. This should also be true of other drugs, such as Marijuana.

Another point of fact – currently over 100,000 Americans die every year from correctly prescribed medicine. That’s several times more than all the gun deaths combined. So whether those are doctors screwing up – or the FDA approving very harmful drugs (such as Vioxx), the current system doesn’t work very well at all. And it isn’t surprising – it’s setup very poorly. As this interview with an FDA whistle-blower reveals, the FDA is setup in such a way that the responsibility to prove the safety of the drug lies not on the agency, but on the company trying to market it.

Can anyone say conflicting interests?

But the issue isn’t one of improving a failed system. The FDA, being the government’s monopoly decider on what gets approved and what doesn’t, is bound to be a focal point of corruption whatever form it takes. And only one solution can remedy this – freedom of competition.


That’s right – free markets in drug approval. As it stands, most people probably assume that if a drug is on the market, it’s fairly safe. And since there’s no other drug approval agency on which to rely on, no matter how tainted the FDA’s reputation becomes, they’ll never be out of a job, because their livelihood doesn’t depend on their competence, despite the fact that other people’s lives do. Not a good mix.

So the system I’m proposing is really simple. If a pharmaceutical company wants its drugs marketed for mass consumption, they’ll want someone’s seal of approval. That someone can’t just be anyone – they have to be trustworthy. Such a reputation would have to be built over years, thanks to a good team of scientists, attention to detail, transparency, and, yes, a potentially high rejection rate for drugs that are unsafe.

Since there are multiple competing firms providing their assessment and approval of a drug’s efficacy and safety, they have everything at stake. Their livelihoods are literally at risk if they allow a harmful substance on the market, and get caught doing it. What’s going to happen to the FDA if they approve a drug that kills 60,000 people? Nothing. They’re not going to lose their funding, and they probably won’t lose their jobs either. Taxpayers will have to continue paying their salaries anyway.

And you can bet that a private firm is going to be under a lot more scrutiny than a government agency.

Now, a whole class of drugs have serious side effects, but can also be life-saving. So these competing approval firms could have a rating system they place on a box of drugs. For example, 4 out of 5 stars for safety, 3 out of 5 for efficacy in treating the condition. The consumer can then read their methodologies and their label to get a feel for what the ratings represent. No doubt consumers would develop preferences for which drug approval firm to trust.

Keep in mind that this is just an idea. Nobody can really know what a free market in drug approval would look like until it happened – much like predicting the structure and pricing of a free market for cars is impossible if all cars are made by the State.

But the incentives are all there now. Not just for safety, but also for speed of approval. If indeed a new, revolutionary drug, could save countless lives but is stuck in an approval process (something Dr. David Graham in the above interview says is actually very rare), then because of the competition to approve these drugs quickly, bureaucracies would be streamlined, and trials conducted more quickly.

At the same time, compromising on safety would threaten the reputation of both the approval firm, and the company whose drugs were approved. Worse – any company that has its drugs approved by the tainted approval firm would stand to lose out – because if the label “Approved by XYZ” can no longer be trusted, then who knows how many bad pharmaceuticals they’ve put their seal on?

This simple mechanism of free market competition makes the approval firms directly responsible to consumers (who will stop patronizing tainted firms, and even sue them for irresponsibly approving drugs), and to their other clients – the big pharmaceutical companies.

But – God forbid such a system ever appears – where would all those FDA bureaucrats go to work? And how would pharmaceutical corporations continue to corrupt an agency that stands to lose nothing because of its corruption?

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