Regulatory Focus™ > News Articles > Have Efforts to Relax Regulatory Requirements Been Antithetical to Industry's Aims?

Have Efforts to Relax Regulatory Requirements Been Antithetical to Industry's Aims?

Posted 08 April 2013 | By Alexander Gaffney, RAC

Regulations and the regulatory agencies that enforce them are nothing if not a reflection of the circumstances of their creation.

The US Food and Drug Administration (FDA), for example, was created and has seen its authority grow in response to scandals related to public health. But, as a new book argues, the pendulum of regulatory authority has often swung backward as well, rolling back protections that would later prove disadvantageous to public health and safety.

The Social Contract: A Balance between Approaches

At its outset, Freedom to Harm: The Lasting Legacy of the Laissez Faire Revival, by Thomas O. McGarity, chair of Administrative Law at the University of Texas Austin School of Law, recognizes a tension in the US regulatory system at large and the "social contract" by which society at large is supposed to operate.

That contract, one between government, industry and citizens, "reflects a general understanding on both sides of the bargain that while the business community should be free to innovate and compete, that freedom does not extend to products and practices that pose significant risks to the public," McGarity writes.

One need not struggle to come up with examples of the pharmaceutical and medical device industries behaving badly. The history of healthcare regulation provides ample examples of incompetence and malfeasance, commonly resulting in a more forceful framework by which to confront similar crises.

In 1938,for example, the Federal Food, Drug and Cosmetic Act was created, a national framework borne from the contamination of pharmaceutical preparations with ethylene glycol, more commonly known as anti-freeze. In 1962, a close call with thalidomide, which caused horrific birth abnormalities in countries where it was approved, prompted legislators to require companies to submit their products to testing to show proof of their safety, efficacy and quality. In 1976, a faulty birth control product, the Dalkon Shield, prompted the creation of a medical device regulatory framework similar in principal to pharmaceutical products.

But as any US citizen will tell you, a "social contract" is a philosophical construct, not an actual document, and the balance between freedom to innovate and freedom from harm is a flexible one. Perhaps the frequent source of contention between industry, the public and legislators has been the notion of when a well-intentioned response has gone too far, stifling companies' ability to reasonably operate or innovate.

A Counter-Productive Push-Back?

What McGarity argues is that industry's attempts to push back against what it deems as unreasonable regulation has often resulted in new scandals by succeeding in scaling back protective measures that otherwise would have prevented problems.

Case-in-point for McGarity is what he calls a counter-assault against some of the protections created under the 1962 Kefauver-Harris Amendments, passed in response to the thalidomide scandal. Throughout the 1970s, companies began to pressure FDA to ease its efficacy requirements, arguing that they were resulting in so-called "drug lag" by causing many companies to seek approval in other countries before the US due to the high costs of conducting efficacy studies. In the ensuing decades, FDA was constantly under assault by industry, legislators (and often patient groups, including AIDS advocacy groups) which argued that the agency was too slow to approve therapies.

In response, FDA instituted a number of programs, including "fast track" approvals that allowed the approval of some new therapies for select high-need conditions. These changes-and most of all the general pressure to approve products using lower standards of evidence-were not without consequence, McGarity argues.

"By 2007, drug companies had withdrawn or heavily restricted sales of more than a dozen drugs that FDA had approved since 1992," he wrote. The most notable of these was Vioxx, a painkiller linked with approximately 139,000 cardiovascular adverse events like heart attack and stroke. [Editor's note: To clarify, Vioxx was not approved by fast-track.]

A Laggardly Pace Replaced With a Rush

Drug lag, McGarity writes, had been replaced with "drug rush," in which regulators were approving products without first having reasonable assurance of their safety and efficacy, having been placed into a "sweat shop atmosphere" in which many reviewers felt rushed to make approval decisions without regard to scientific complexity, the time needed to adequately review data, or the true conclusions of the submitted data.

McGarity points to a diabetes drug approved in 1997, Warner-Lambert's Rezulin (troglitazone), as another instance of drug approval fervor run awry. Despite the hesitations of the drug's review staff, those concerns were purged from FDA's files and the drug approved. Three years later, the drug had been recalled from the market after being associated with thousands of liver injuries-the same concerns initially voiced by the initial reviewer.

Whose Best Interest?

If there is a larger concern raised by McGarity in bringing attention to cases like these, it is that they are not in the industry's best short- or long-term interest.

Repeated or particularly egregious violations of the public's trust, either in the form of neglect, incompetence or intentional malfeasance, erode public confidence in the pharmaceutical and device industries and the regulatory process in general, making it more difficult to persuade people that a product is indeed safe.

"The drug and device industries have always had the freedom to become a diverse and technologically dynamic industry capable of designing and manufacturing a broad array of lifesaving products," McGarity writes. "But they also had the obligation to refrain from foisting inefficacious and dangerous medicines and devices on unsuspecting patients."

And it is this latter obligation that, to McGarity, the industry has not been regularly meeting in the past several decades.

"For more than a century, FDA was the governmental institution with the power to draw the proper balance between freedom to innovate and freedom to harm," McGarity continued. During what he refers to as a "laissez Faire revival," however, lobbying efforts by the pharmaceutical and device industries succeeded in limiting FDA's ability to perform its essential functions-its ability to ensure that products are safe for use and manufactured under proper conditions.


It is little wonder then, McGarity concludes, that confidence in FDA has plunged to around 36% in recent years. And, as Regulatory Focus has recently reported, confidence in the pharmaceutical industry pales in comparison.

McGarity's book goes on to conclude that new protections against corporate interference-not participation-in regulatory matters is sorely needed. Science-based regulatory decisions need to be protected, rules given clear statutory standing, regulatory violators fined, and FDA resources increased, McGarity argues among a long list of other recommendations.

To be sure, McGarity's conclusions are rooted in a progressive approach-he admits as much throughout the book-but his broader conclusion is one fraught with regulatory implications. FDA has in recent years moved to expand upon the fast-track principle, instituting new accelerated approval programs for multiple product types that allow manufacturers to get their products approved based on relatively minimal data.

Based on McGarity's conclusions, this approach-one explicitly endorsed by legislators and sought by industry-may be one headed for a significant failure in the near future.  Already FDA has been forced to withdraw some products due to concerns about safety and efficacy, though none have reached the point of scandal.

But even beyond this hypothetical, McGarity's broader conclusion raises a broader regulatory point: Industry's best interests may be best served by a regulatory regime that preserves confidence in the regulatory system, even if that approach is more rigorous, onerous and costly.

That could be a tough conclusion to swallow, particularly with the high costs of drug and device approvals, but, McGarity concludes, the price of a safe and reliable system is one worth the cost.

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