FDA Certification: A Modest Proposal

In the past I’ve made the suggestion that FDA certification should be optional and that said certification should provide certain benefits to the company in the form of certain tort immunities. Below, I’d like this post to be a thread to discuss how that might work (specifically the FDA tort immunity part). 

My notion for how this might work is that a person has no grounds for suit against the pharm manufacturer for defects or side effects if the manufacturer can show that the approved procedures were followed. 

What does this cover? That means, from famous examples, a parent of a thalidomide child has no grounds for suit against the manufacturer because the drug was used for the approved purpose and correctly manufactured. It had unforseen and unintended consequences. Which is, we all agree, unfortunate. But unfortunate occurances a priori do not make for grounds to sue.

What does it not cover? It doesn’t cover uses not claimed. If a drug is produced with specificied (in the FDA approval) uses. If it can be shown that the manufacturer was touting uses beyond the uses mentioned in the approval or for effects not listed … this can provide a ground for suit. Commenter Boonton noted:

One infamous case, for example, was oxycotin which was marketed as impossible to become addicted too.

If the FDA approval documents lack the claim that “it is non-addictive” then claiming the same gives ground for suit. One the other hand, if it did, then there would be no standing. 

FDA approval processes are expensive. This then gives companies the motive to seek that certification. Today the approval is required, but it buys you nothing except the opportunity to sell product in the US. My suggestion would be to make the approval process more or less optional, but give motive for the company to seek approval. The consumer would realize that the FDA label implies a high level of testing and scrutiny, which is something they might value in a drug. 

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  1. Two big problems:

    1) Pharm manufacturers will be in many circumstances be willing to gamble, either because they are rational but immoral (the expected value of not getting approval is greater monetarily even though there is some significant risk of harm to their customers) or because they are irrational (in denial about the risks or just not thinking about the future.)

    2) Irrational consumers will flock to various pharms for all kinds of on-label and off-label uses, calculating risk and benefit very, very poorly as people tend to do. Manufacturers will come as close to the line of advocating off-label use as legally possible.

  2. Boonton says:

    1. Thalidomide’s problem in the 60’s was not due to ‘approved uses’. The drug actually wasn’t approved but the company conducted its ‘study’ by giving US doctors free samples to give to their patients and then asked them to report back how the patients did (the drug’s original purpose was to help pregnant women ‘relax’). That was a time
    before the concepts of a rigerous clinical study had really been formulated. Today I doubt any company would consider even trying something like that and if it did it would be highly illegal.

    2. There are some drugs on the market today that are highly dangerous for pregnant women. Their protocols sometimes even forbid giving the drug to a woman of child bearing age without regular pregnancy tests and a system of birth control in place. If you violate those protocols either on your own or with the help of your doctor I doubt you could get very far in the civil court system against the maker.

    3. The concern I would have is that the bad would drive out the good. Consider a drug that reduced the risk of heart attacks by 10% across the board. Such a drug would be very valuable, esp. if it had no adverse reactions. BUT for the individual its effects would appear quite subtle. Your mom might take it and still get a heart attack, for example. I’m sure if such a drug was discovered, the drug company with the patent would be very, very happy and profitable. But not consider an alternative drug that claims to reduce the risk by 15%. The drug itself, though, doesn’t do much of anything. Like many dietary supplements, though, it’s not in itself harmful. This drug could be marketed without FDA approval in your system and like the original drug to the indivdiuals taking it, it would be hard to tell a difference. The first drug is at a disadvantage because it carries with it the very hard and expensive work of proving its claim. The second drug enjoys making a wild claim without bothering to back it up. True the first drug has a ‘seal of approval’ from the FDA but the second drug can offset that by just uppingits claims. At the end of the day you’re not going to get innovation to move away from actually producing wonderful new drugs and towards innovative ways to market ineffective drugs.

    I think there’s some historical precedent for this. A hundred years ago there were ‘drug companies’ all over the place marketing ‘tonics’ and ‘cures’ but not so many really innovative drugs. In the last 30 years, though, we’ve seen what I think is a revolution of innovative drugs that really work.

  3. Mark says:

    Two big problems with your big problems.

    Not getting approval means they are liable for suit. If they are “immorally” selling a known bad product … getting approval would be far better. The trade off is actually far far better for not getting approval for basically benign/low-risk product, that which taken under its guidelines basically does no lasting (tort liable) harm. That is, risky (or immoral/bad) products are exactly the ones which (game theoretically) be more likely to seek FDA approval (as a shield).

    As for 2, so? Why would a mfg necessarily advertise non-FDA products over the licensed ones? If there are problems with the product they are fully liable. We’ve had large pharm companies in the last ten years completely disappear under the weight of lawsuits. The point is there is a trade off for the pharm company and for the consumer. Both have choices here.

  4. Boonton says:

    Which large pharma companied disappeared under the weight of lawsuits? The biggest one that comes to mind is Merck and Vioxx but Merck is still around. Oxycontin was/is manufactured by Purdue Pharma which was paid out $600M in lawsuits and about $35M in fines but is still around (being privately held it doesn’t publish its financials but being that it has a bit over 1300 employees its not quite a large pharma company).

    As to why mfg would opt to go the non-FDA route? It’s quite simple, proving your claim is expensive and likely to result in only have a very limited claim being approveable (i.e. ‘lowers risk of X by 10%’). In contrast if you don’t take on this expense and time consuming effort, you can make a wild claim for your product and not really have to worry about lawsuits unless your product is positively harmful. The good would be driven out by the bad.

    You are also overestimating the potency of lawsuits. It’s quite easy to form a ‘pure play’ company whose only product is the ‘non-approved drug’. Reap dividends from it if all goes well, if all goes bad let it’s assets get wiped out by lawsuits and fold it up in bankruptcy.

  5. Not getting approval means they are liable for suit.

    Yes but they don’t have to pay for approval. I’m not worried about cases where they know it will cause much harm, but where they think there’s maybe a 5-10% chance. The FDA would never approve it, but they’re willing to roll the dice since as Boonton points out, the cost of getting sued is at the worst losing the company, while the upside if they get lucky with the drug or if they don’t get sued (or manage to win the case) is enormous. It’s just a classic externalizing the costs problem.

    As for 2, so? Why would a mfg necessarily advertise non-FDA products over the licensed ones?

    Why not? Consider the placebo effect. It implies that consumers often will believe that a drug that has no effect on X is helping X if they are told that it does. (In fact, it actually would be helping X some amount of the time.) In the absence of the FDA, then, decisions on marketing are purely business decisions. Why not advertize that your new drug helps erectile dysfunction? Huge upside, no cost. (Well, if it’s just a placebo, what’s the harm? Because it’s not actually a placebo. It’s a drug and all? drugs have at least some risks and negative side effects.)

  6. Boonton says:

    Well we already have a test case. ‘Dietary supplements’ are more or less exempt from FDA oversight which is why you’ll often see things being advertised as promoting ‘heart health’ or ‘colon health’ or ‘immune system’ but actually dance around a specific medical claim (i.e. lower your blood pressure, cure a cold).

    While some of this industry has been harmful what’s striking is that it’s mostly been not all that innovative. GNC is more or less selling the same stuff health store sold in the 1970’s….vit. C, various mixes of other things etc. There’s been no great innovations beyond advertising and packaging that I’m aware of even being relatively free of the FDA.

  7. Mark says:

    Uhm, that’s because if it is found to be effective and has an important active ingredient the FDA controls it (or it is made outright illegal .. by the FDA).

  8. Boonton says:

    Note quite, see http://en.wikipedia.org/wiki/Dietary_supplement#United_States

    Basically if you can find a dietary supplement that cures a disease, you have remarkable freedom to market it with next to no interference by the FDA. Yet this relative freedom hasn’t produced much innovation, to my knowledge it hasn’t even produced attempted innovation to *try* to find such a supplement.

  9. Mark says:

    You didn’t read down far enough. See “permissible claims” if you find the supplement works to prevent or cure disease … you cannot sell it as such.

    No, a product sold as a dietary supplement and promoted on its label or in labeling* as a treatment, prevention or cure for a specific disease or condition would be considered an unapproved–and thus illegal–drug.

    This is not a freedom of the supplement market. It if works to cure diseases. It falls under normal (non-supplement) jurisdictions. Note, you knew this. Many drugs are extracted from animal and plants. These drugs cannot be marketed as supplements and used in chemotherapy (for example) even if extracted from plants like other supplements.

    Basically, its a supplement if it has no effective uses by the medical community. So there, you have your reason why this freedom hasn’t been used. Because it doesn’t exist as such.

  10. Boonton says:

    Not quite, you can ‘cure a disease’ and remain unregulated as a dietary supplement. You’re citing the advertising.

    At this point let’s talk about ‘off label’ marketing. Drugs are often prescribed for ‘off label’ reasons. If some dietary supplement really did have some curative property, word would get out and the company making it would make quite a bit without ever having to label it as preventative.

  11. Mark says:


    Yes but they don’t have to pay for approval.

    On what planet is that? The approval process costs hundreds of millions. A class action suit can cost billions.

  12. I meant if they don’t get it approved, they save that cost.

  13. Boonton says:

    The approval process itself doesn’t cost ‘hundreds of millions’. Relatively speaking, the FDA actual costs are pretty modest. The ‘hundreds of millions’ figure is the cost of running through numerous compounds that seem to work in a test tube but don’t work in a body, or if they work in a body they can’t be reasonably made into a drug form or if they work as drug form peter out in clinical trials that reveal side effects that are worse than the drug’s benefits or indicate that they don’t really work better than existing drugs.

    If you want to discover new drugs that do good things, I’m not seeing anything in your proposal that avoids those costs. Barring a really massive innovation….like a computer simulation so sophisticated that it can accurately predict all effects of a compound in a human body without the need for actual clinical trials….there’s really no way around those costs.

    NOTE: We”re still waiting on actual examples of major drug companies that have been bankrupted by class action suits.

  14. Boonton says:

    Some real life data may be of use here. Take a peek at http://www.fda.gov/drugs/developmentapprovalprocess/howdrugsaredevelopedandapproved/approvalapplications/investigationalnewdrugindapplication/default.htm which is a summary for an IND application (Investigational New Drug).

    Exactly what steps do you think could reasonably be cut out and generate real savings here?

  15. Boonton says:

    I think the issue you have here is that you have a solution in search of a real problem.