A Truly Independent Drug Safety Board?

  • by: |
  • 01/13/2006

In the latest New England Journal of Medicine, Professor Wayne Ray and Mr. C. Michael Stein further develop a proposal for an independent drug safety board. Along with many editorialists in medical journals, they fear that the pharmaceutical companies have way too much influence over the FDA.

If so, that would be in accord with the notion of “regulatory capture” (a facet of the economic school of public choice theory) whereby companies in regulated industries take control of their regulators, causing them to confuse corporate interests with the public interest. Obviously, drug companies would attempt to take over the FDA, but I don’t see evidence that they have succeeded.

Ray & Stein point to PDUFA (the Prescription Drug User Fee Act), which critics contend turn the industry into the FDA’s customer, because the agency now relies on revenues from industry rather than just taxation for its existence and meaning. However, the FDA is a government monopoly. Drug companies must pay the user fees if they hope to sell their meds in the U.S. They can’t shop around for a better licensing body. So, it is incorrect to describe the drug companies as customers.

Furthermore, although the FDA has sped up its approvals as a result of PDUFA, it is still very slow and inefficient. In a recent paper I argued that the FDA, despite improving its timeliness, is grossly unproductive versus the British regulator, for example, in determining safety and efficacy.

Ray & Stein’s proposal has both good and bad elements, but I’d like to address its Achilles’ heel: that this new regulator will be funded solely by pharmaceutical sales. Many people confuse “independent” with “taxpayer funded”, but this is not the case. The more likely result is “unaccountable”, not independent.

In either the status quo or Ray & Stein’s proposal, the drug company (or, ultimately, the prescription buyer) finances the agency. However, under PDUFA, only drug makers with confidence in their new products pony up for the FDA’s review. There is some transparency between input and outcome. Under Ray & Stein’s proposal, companies’ pipelines are irrelevent because sales taxes are obviously levied on already approved products. If pipelines are full, but current sales weak, we’ll get no timely approvals. If pipelines are empty but current sales booming, we’ll get a bunch of regulators twiddling their thumbs on the taxpayers’ dime. (You can bet they’re not going to lay themselves off!)


Graham, JR. 2005. A Lethal Guardian: The Canadian Government’s Ban on Prescription Drugs. Vancouver, BC: The Fraser Institute.

Ray, WA, & CM Stein. 2006. “Reform of Drug Regulation - Beyond an Independent Drug Safety Board,” New England Journal of Medicine 354, 2 (January 12): 194-201.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

Blog Roll

Alliance for Patient Access Alternative Health Practice
Better Health
Biotech Blog
CA Medicine man
Cafe Pharma
Campaign for Modern Medicines
Carlat Psychiatry Blog
Clinical Psychology and Psychiatry: A Closer Look
Conservative's Forum
Club For Growth
Diabetes Mine
Disruptive Women
Doctors For Patient Care
Dr. Gov
Drug Channels
DTC Perspectives
Envisioning 2.0
FDA Law Blog
Fierce Pharma
Fresh Air Fund
Furious Seasons
Gel Health News
Hands Off My Health
Health Business Blog
Health Care BS
Health Care for All
Healthy Skepticism
Hooked: Ethics, Medicine, and Pharma
Hugh Hewitt
In the Pipeline
In Vivo
Internet Drug News
Jaz'd Healthcare
Jaz'd Pharmaceutical Industry
Jim Edwards' NRx
Kaus Files
Laffer Health Care Report
Little Green Footballs
Med Buzz
Media Research Center
More than Medicine
National Review
Neuroethics & Law
Nurses For Reform
Nurses For Reform Blog
Opinion Journal
Orange Book
Peter Rost
Pharm Aid
Pharma Blog Review
Pharma Blogsphere
Pharma Marketing Blog
Pharmacology Corner
Pharmaceutical Business Review
Piper Report
Prescription for a Cure
Public Plan Facts
Real Clear Politics
Shark Report
Shearlings Got Plowed
Taking Back America
Terra Sigillata
The Cycle
The Catalyst
The Lonely Conservative
Town Hall
Washington Monthly
World of DTC Marketing
WSJ Health Blog