Free To Choose: a personal Statement

participated in the changed role of government and became far
more activist than it had ever been before. The banning of cycla-
mates and the threat to ban saccharin have received most public
attention, but they are by no means the most important actions of
the FDA.
No one can disagree with the objectives of the legislation that
culminated in the
1962
amendments. Of course it is desirable that
the public be protected from unsafe and useless drugs. However,
it is also desirable that new drug development should be stimu-
lated, and that new drugs should be made available to those who
can benefit from them as soon as possible. As is so often the case,
one good objective conflicts with other good objectives. Safety
and caution in one direction can mean death in another.
The crucial questions are whether FDA regulation has been
effective in reconciling these objectives and whether there may not
be better ways of doing so. These questions have been studied in
great detail. By now, considerable evidence has accumulated that

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FREE TO CHOOSE: A Personal Statement
indicates that FDA regulation is counterproductive, that it has
done more harm by retarding progress in the production and dis-
tribution of valuable drugs than it has done good by preventing
the distribution of harmful or ineffective drugs.
The effect on the rate of innovation of new drugs is dramatic:
the number of "new chemical entities" introduced each year has
fallen by more than 50 percent since 1962. Equally important,
it now takes much longer for a new drug to be approved and,
partly as a result, the cost of developing a new drug has been
multiplied manyfold. According to one estimate for the 1950s and
early 1960s, it then cost about half a million dollars and took
about twenty-five months to develop a new drug and bring it to
market. Allowing for inflation since then would raise the cost to a
little over $1 million. By 1978, "it [was] costing $54 million and
about eight years of effort to bring a drug to market"—a hundred-
fold increase in cost and quadrupling of time, compared with a
doubling of prices in general." As a result, drug companies can
no longer afford to develop new drugs in the United States for
patients with rare diseases. Increasingly, they must rely on drugs
with high volume sales. The United States, long a leader in the
development of new drugs, is rapidly taking a back seat. And we
cannot even benefit fully from developments abroad because the
FDA typically does not accept evidence from abroad as proof of
effectiveness. The ultimate outcome may well be the same as in
passenger rail traffic, the nationalization of the development of
new drugs.
The so-called "drug lag" that has resulted is manifested in the
relative availability of drugs in the United States and other coun-
tries. A careful study by Dr. William Wardell of the Center for
the Study of Drug Development of the University of Rochester
demonstrates, for example, that many more drugs are available in
Great Britain that are not available in the United States than
conversely, and that those available in both countries were on the
average on the market sooner in Great Britain. Said Dr. Wardell
in 1978,
If you examine the therapeutic significance of drugs that haven't
arrived
in
the U.S. but are available somewhere in the rest of the

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Who Protects the Consumer?
207
world, such as in Britain, you can come across numerous examples
where the patient has suffered. For example, there are one or two
drugs called Beta blockers, which it now appears can prevent death
after a heart attack—we call this secondary prevention of coronary
death after myocardial infarction—which, if available here, could be
saving about ten thousand lives a year in the United States. In the ten
years after the 1962 amendments, no drug was approved for hyper-
tension—that's for the control of blood pressure—in the United
States, whereas several were approved in Britain. In the entire cardio-
vascular area, only one drug was approved in the five year period
from '67 to '72. And this can be correlated with known organizational
problems at F.D.A. . . .
The implications for the patient are that therapeutic decisions that
used to be the preserve of the doctor and the patient are increasingly
being made at a national level, by committees of experts, and these
committees and the agency for which they are acting—the F.D.A.—
are highly skewed towards avoiding risks so there's a tendency for us
to have drugs that are safer but not to have drugs that are effective.
Now I've heard some remarkable statements from some of these ad-
visory committees where in considering drugs one has seen the state-
ment "there are not enough patients with a disease of this severity to
warrant marketing this drug for general use." Now that's fine if what
you are trying to do is minimize drug toxicity for the whole popu-
lation, but if you happen to be one of those "not enough patients,"
and you have a disease that is of high severity or a disease that's
very rare, then that's just tough luck for you.
Granted all this, may these costs not be justified by the ad-
vantage of keeping dangerous drugs off the market, of preventing
a series of thalidomide disasters? The most careful empirical study
of this question that has been made, by Sam Peltzman, concludes
that the evidence is unambiguous: that the harm done has greatly
outweighed the good. He explains his conclusion partly by noting
that "the penalties imposed by the marketplace on sellers of
ineffective drugs before 1962 seems to have been sufficient to have
left little room for improvement by a regulatory agency."
12
After
all, the manufacturers of thalidomide ended up paying many tens
of millions of dollars in damages—surely a strong incentive to
avoid any similar episodes. Of course, mistakes will still happen—
the thalidomide tragedy was one—but so will they under govern-
ment regulation.
The evidence confirms what general reasoning strongly sug-

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FREE TO CHOOSE: A Personal Statement
gests. It is no accident that the FDA, despite the best of intentions,
operates to discourage the development and prevent the marketing
of new and potentially useful drugs.
Put yourself in the position of an FDA official charged with
approving or disapproving a new drug. You can make two very
different mistakes:
1. Approve a drug that turns out to have unanticipated side
effects resulting in the death or serious impairment of a sizable
number of persons.
2. Refuse approval of a drug that is capable of saving many
lives or relieving great distress and that has no untoward side
effects.
If you make the first mistake—approve a thalidomide—your
name will be spread over the front page of every newspaper. You
will be in deep disgrace. If you make the second mistake, who
will know it? The pharmaceutical firm promoting the new drug,
which will be dismissed as an example of greedy businessmen
with hearts of stone, and a few disgruntled chemists and physi-
cians involved in developing and testing the new product. The
people whose lives might have been saved will not be around to
protest. Their families will have no way of knowing that their
loved ones lost their lives because of the "caution
"
of an unknown
FDA official.
In view of the contrast between the abuse poured on the Euro-
pean drug companies that sold thalidomide and the fame and
acclaim that came to the woman who held up approval of thalid-
omide in the United States (Dr. Frances O. Kelsey, given a gold
medal for Distinguished Government Service by John F. Ken-
nedy), is there any doubt which mistake you will be more
anxious to avoid? With the best will in the world, you or I, if we
were in that position, would be led to reject or postpone approval
of many a good drug in order to avoid even a remote possibility
of approving a drug that will have newsworthy side effects.
This inevitable bias is reinforced by the reaction of the phar-
maceutical industry. The bias leads to unduly stringent standards.
Getting approval becomes more expensive, time-consuming, and
risky. Research on new drugs becomes less profitable. Each com-
pany has less to fear from the research efforts of its competitors.

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