Contra Scott on Abolishing the FDA

By Maxwell Tabarrok @ 2023-12-15T14:01 (+10)

This is a linkpost to https://maximumprogress.substack.com/p/contra-scott-on-abolishing-the-fda

Scott Alexander’s recent post on the FDA raises the average level of discourse on the subject. He starts from the premise that the FDA deserves destruction but cautions against rash action. No political slogan can be implemented without clarification and “Abolish the FDA” is no different, but Scott’s objections aren’t strong reasons to stop short of a policy implementation that still retains the spirit behind the slogan.

Scott’s preferred proposal is to essentially keep the authority and structure of the FDA the same but expand the definition of supplements and experimental drugs. This way, fewer drugs are illegal but there aren’t big ripple effects on the prescription and health insurance systems that we have to worry about.

The more hardline libertarian proposal is to restrict the FDA’s mandatory authority to labeling and make their efficacy testing completely non-binding. This would turn the FDA into a informational consumer protection agency rather than a drug regulator. They can slap big red labels on non-FDA approved drugs and invite companies to run efficacy tests to get nice green labels instead, but they can’t prevent anyone from taking a drug if they want it.

Let’s go through Scott’s objections to the hardline plan and see if they give good reasons to favor one over the other.

Are we also eliminating the concept of prescription medication?

I can see some “If I were king of the world” overhauls to the health system that might do away with mandatory prescriptions, but I think the point of this exercise is to see if we can abolish the FDA without changing anything else and still come out ahead, accounting for costly second-order effects from the rest of the messed up health system. So no, the hardline “abolish the FDA” plan would not remove the legal barrier of prescription. Here is Scott’s response:

But if we don’t eliminate prescriptions, how do you protect prescribers from liability? Even the best medications sometimes cause catastrophic side effects. Right now your doctor doesn’t worry you’ll sue them, because “the medication was FDA-approved” is a strong defense against liability. But if there are thousands of medications out there, from miraculous panaceas to bleach-mixed-with-snake-venom, then it becomes your doctor’s responsibility to decide which are safe-and-effective vs. dangerous-and-useless. And rather than take that responsibility and get sued, your doctor will prefer to play it safe and only use medications that everyone else uses, or that were used before the FDA was abolished. You might even find it’s even harder to get a medication into common use than it was back when the FDA existed!

This is a reasonable concern, litigation pressure is a common culprit behind spiraling regulatory burden. But in this case we can be confident that turning the FDA into a non-binding informational board won’t turn prescriptions into an even higher legal hurdle because doctors already prescribe far outside of FDA approval.

When a drug is tested by the FDA it is tested as a treatment for a specific condition, like diabetes or throat cancer. If the drug is approved, it is approved only for the outcome measured in efficacy testing and nothing else. However, doctors know that certain drugs approved for one thing are effective at treating others. So they can issue an “off-label” prescription based on their professional opinion. Perhaps 20% of all prescriptions in the US are made off-label and more than half of doctors make some off label prescriptions.

So doctors are clearly willing to leave the legal umbrella of FDA approval when they make prescription decisions. There are lots of high profile legal cases about off-label prescriptions but they are mostly about marketing and they haven’t dampened doctor’s participation in the practice. If doctors were comfortable enough to prescribe ketamine to treat depression even though the FDA had never tested or approved it as a psychiatric drug, we shouldn’t worry too much about them shying away from using drugs that they believe are effective in a system where the FDA's role is minimized.

Thousands of doctors already rely on their personal judgement of the evidence when deciding what medicines to prescribe. The choice between Scott’s plan and the hardline libertarian one doesn’t change this, but making the FDA non-binding comes with lots of extra benefits from making pharmaceutical markets cheaper, more innovative, and more open.

How do we deal with the fact that many doctors are dumb?

Next, Scott has some concerns about principal-agent problems between patients and their doctors.

Suppose GoodCorp puts a lot of effort into making (let’s say) a revolutionary new Alzheimers drug that really works. They conduct a great study, and get it certified by whatever voluntary certifying organization replaces the FDA. Their drug costs $10,000.

BadCorp takes whatever was in their fridge, blends it together, calls it “a revolutionary new Alzheimers drug”, conducts a bad study which they manipulate, and does a great advertising blitz. Their drug costs $50. Which one does your doctor prescribe you?

I don’t know: which company has more attractive sales reps distributing pens? Which pens are nicer and shinier?

Aligning the incentives of doctors and their patients is a real and difficult problem, but Scott makes no argument for why the FDA is in a better position to care about patient’s interests than doctors are. The FDA’s betrayal of patient interests looks different but it is no less damaging.

GoodCorp puts a lot of effort into making a revolutionary new vaccine that is good enough to stop a global pandemic if it is rolled out in time. They send the FDA all of their data, but its Friday afternoon and a long weekend is coming up and it might look bad if they approve this vaccine too fast anyways. Maybe they should just push the meeting back a few weeks. Perhaps doctors prescribe too many of the bad drugs but the FDA approves too few of the good ones. The optimal amount of mis-prescribed medicine is not zero.

Scott makes no attempt to quantify which of these effects is more important, but here is mine:

The “biggest man-made medical disaster” ever was the widespread prescription of the nausea drug Thalidomide for morning sickness. The drug caused horrible birth defects in the children of the pregnant women who took it. Ten thousand children were affected around the world, but the medicine was not approved in the US because of a stern FDA regulator. Dr. Francis Kelsey received the President's Award for Distinguished Federal Civilian Service for her decision not to approve the drug.

The FDA approved the first Covid-19 vaccines for use on December 11th 2020. Pfizer submitted their emergency use authorization request on Friday, November 20th. If they FDA had rushed to review their request over the weekend and approved the vaccine on Monday instead of waiting 3 weeks, they could have saved at least 10,000 lives. Of course, accelerations of approval far more than 3 weeks were completely feasible as well.

So already, the biggest man-made medical disaster ever committed is outgunned by completely standard disasters of omission at the FDA. This isn’t an exhaustive quantification but I think it is a convincing case that while dumb, misaligned doctors are a problem, an even dumber and even more misaligned FDA is not the right solution.

Scott’s plan of opening up the supplements category to any safe-to-ingest chemical doesn’t really solve the dumb doctor problem. It just maintains the separation between the ultra-conservative set of FDA approved drugs from the wild-west off-labels and supplements with an extremely expensive regulatory authority that likely kills thousands with its drags on medical costs and innovation. The “abolish the FDA” plan also has this separation if patients want it, but its enforced by what gets green labels rather than what is allowed on the shelves at all.

How will the smart doctors get the data they need?

Maybe your doctor isn’t dumb. Maybe they could look over the studies themselves just as well as the FDA can. That doesn’t help, because without the FDA, the studies won’t be done.

Here again we can look to the extremely common practice of off label prescriptions. Scott has probably written some of these himself, e.g prescribing an anti-depressant to someone with anxiety. To get the data he probably read a bunch of academic papers and looked at non-FDA RCTs.

Also, the FDA does not need to be a binding regulatory authority to produce data on the efficacy of drugs. The FDA could take a more consumer activist role and observe what people are using and then go out and test them themselves without forcing anyone else to wait on them. We could also just take their budget and use it to fund a bunch of NIH clinical trials each year.

What would insurance cover?

Right now (to vastly oversimplify) insurances have to cover all FDA-approved medications if patients can prove they really need them (insurances are allowed to make the proving process inconvenient, which is how they gate access in practice). Insurances don’t have to cover any non-FDA-approved treatments, and often don’t.

This is probably where the second order effects of reforming or abolishing the FDA are largest, but it still isn’t a great argument for Scott’s plan over mine. A non-binding informational FDA could still decide which drugs are required to be covered by insurance. This obviously grants a lot of power back to the FDA, but at least in a non-binding world drugs can be produced much cheaper, so health insurance is less necessary to pay for them. In Scott’s plan the FDA retains the mandatory insurance power and new drugs are even less likely to be covered by insurance as supplements.

Without making any big changes to healthcare governance outside of the FDA, we could also just move the authority to decide what gets mandatory coverage to some other branch of the Department of Health and Human Services and remove the explicit link between the FDA’s greenlight and mandatory coverage.

The health insurance system is full of bad incentives. Neither plan fixes these but neither one makes them worse. Again, at least in the libertarian world drugs are cheap and new ones come out quicker.

What would a practical abolish-the-FDA-lite policy proposal look like?

Completely remove efficacy testing requirements, making the FDA a non-binding consumer protection and labeling agency. Pharmaceutical manufactures can go through the FDA testing process and get the official “approved’ label if insurers, doctors, or patients demand it, but its not necessary to sell their treatment.

This would let doctors use the tools they already have to determine the effectiveness of a drug for a certain condition, even when it is not FDA approved. It would let patients choose their own risk profile when deciding personal issues of life and death. It would bring the cost of drugs down as not every new drug is saddled with billions of dollars of bureaucratic compliance costs. It would quicken the pace of drug discovery and medical innovation. It would improve our pandemic response times.

The problems of doctor fallibility and insurance coverage are problems in both plans, but only one gets the full benefits of an open, rapid, and cheap market for pharmaceuticals.

Scott’s proposal is reasonable and would be an improvement over the status quo, but it’s not better than the more hardline proposal to strip the FDA of its regulatory powers.

The very last sentence of the essay mentions the feasibility of actually passing these reforms politically, but it’s not a focus elsewhere and feels to me like a separate issue so I don’t consider it here.