Does the FDA’s Monopoly Increase or Decrease Public Health?

A dear friend of mine (and fine physician), Dr. Chris Granger, took issue with this article I wrote with Patrick McLaughlin and Jonathan Nelson at the Mercatus Center: “Markets Can Protect Patients Better than the FDA.” He responded as follows on Facebook:

My dear friend … each major stage of the FDA’s history of providing a mechanism to promote safe and effective drugs and devices was a direct response to public health disasters in less regulated markets. So at least there is a strong argument that a completely free market, without a “societal entity” to provide a framework to assure some level of patient safety (and effectiveness), is not the best approach.

I responded as follows (edited):

Chris, my friend, I believe you are naively accepting the official history. At its very inception the FDA was a mechanism to benefit crony capitalists, not the general public. This is from the University of Michigan Press about their book, The Politics of Purity:

Spearheaded by Harvey Washington Wiley, the Pure Food and Drugs Act of 1906 launched the federal regulation of food and drugs in the United States. Wiley is often lauded as a champion of public interest for bringing about a law that required healthful ingredients and honest labeling. Clayton Coppin and Jack High demonstrate, however, that Wiley was in fact surreptitiously allied with business firms that would benefit from regulation …

Coppin and High … expose the selectivity of Wiley’s enforcement of the law, in which he manipulated commercial competition in order to reward firms that supported him and penalize those that opposed him. By examining the history of the law’s movement, the authors show that, rather than acting in the public interest, Wiley used the Pure Food and Drugs Act to further his own power and success.

Evidence presented at shows that the FDA’s determination to keep bad drugs off the market has caused a succession of (unseen) public health problems by keeping good drugs off the market or delaying their availability.

And, Chris, “a ‘societal entity’ to provide a framework to assure some level of patient safety (and effectiveness)” does not have to be a government entity, or a single one, does it? Religious instruction is also important, but we don’t need the government to provide it, we just need government to allow private sector religious institutions to do so.

Furthermore, while it may be true, as Dr. Granger says, that “each major stage of the FDA’s [growth] …. was a direct response to public health disasters in less regulated markets,” that response was not necessarily helpful, nor preferable to the responses that would have arisen in the private sector but were crowded out by the FDA. The well-intended governmental response might have made things worse. This video I made with Tomasz Kaye explains why.

For those who would like to know what economists think about the issue, here is an article by Daniel Klein which finds that “Many economists have expressed judgments about the FDA. In almost all cases, they have supported liberalization, often dramatic.”


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