FDA Goes India
By David Henderson
Alex Tabarrok has an important post this morning on the Food and Drug Administration’s regulations that have helped to cause shortages of drugs. One of the contributors is the tamely named “Good Manufacturing Practices” regulations that the FDA is enforcing. This quote from health economist John Goodman is especially striking:
For example, a drug manufacturer must get approval for how much of a drug it plans to produce, as well as the timeframe. If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.
When I read that, I remembered reading something Jagdish Bhagwati had written a few decades ago (I can’t remember the particular source) about India’s economy under its heavy regulatory regime pre-1991. Jagdish pointed out that to produce more than a certain amount of a good, an Indian manufacturing routinely had to get government permission and this permission didn’t always come quickly.
As Goodman points out in his post, Obama official Cass Sunstein claims to be looking around for bad regulations to abolish or moderate. Here’s his chance.