By Arnold Kling
This week’s econtalk, featuring Richard Epstein talking about patent issues with respect to pharmaceuticals, I found to be really taxing mentally. I have thought a great deal about these issues, yet Epstein was talking faster than I could absorb. Also, just at the end, Russ Roberts raised some really interesting issues.
First, do big drug companies benefit from FDA regulation, because the compliance costs are so high that small competitors cannot enter? Epstein’s answer was negative, because big companies end up bidding for the research results of small companies.
I found this answer too glib. I think that industry structure would be very different without the FDA. (I believe the same about the car industry–my joke is that I bet it would take more lawyers than engineers to start a new automobile company.)
Another issue that got raised near the very end is “unauthorized uses” of drugs–trying a drug that has been approved for one kind of cancer on another kind of cancer. One would think that if authorized use needs to be heavily regulated, then unauthorized use would be, also. But unauthorized use tends to be not only unregulated, but unstudied. So the results of unauthorized use, rather than being subject to statistical analysis and widely disseminated, are passed along by word of mouth from physician to physician.
In fact, one defense I would make of the FDA is that it does promote a scientific process, with controlled experiments. Contrast this with education, where new “treatments” are constantly introduced without any results from controlled experiments. In medicine, I think we make real progress, in part due to the use of the scientific method. In education, new methods of teaching and curriculum “reforms” are often a step backward, because nobody bothered to run a controlled experiment before introducing the new approach. On the whole, I think that progress has been much slower in education than in medicine, in part because education lacks the equivalent of the FDA.