Prescription Remedies

A broad coalition of deregulators is gearing up to reform the FDA. How far will they go?

The Food and Drug Administration has made American drugs and medical devices the envy of the world," wrote Bill Clinton in his introduction to the March National Performance Review proposal to "reinvent" the regulation of pharmaceutical products and medical devices. "And we are going to stick with the standard we have--the highest in the world."

In mid-May, Rep. Joe Barton (R-Tex.), who chairs the House oversight subcommittee that keeps tabs on the FDA, offered a slightly different perspective. As recently as March, USA Today had reported that Barton was "not ready to call for massive [FDA] reforms." But times change. "After four months of being objective and unbiased, I'm not impressed [with] the agency's procedures or internal attitudes," he told the annual meeting of the Medical Device Manufacturers Association on May 12. Barton said he hadn't been looking for "good guys" or "bad guys" in the quarrels between the health care industry and regulators. "But from what I've seen," he said, "you [device makers] are innocent; the FDA is guilty until proven otherwise."

To an extent that was inconceivable before last November's elections, Barton's view of what he calls the "Foot Dragging and Alibi" agency is becoming the consensus on Capitol Hill. Even Democrats who have staunchly defended the FDA and its aggressive commissioner, David Kessler, are proposing to loosen the agency's regulatory stranglehold on the food, drug, and medical-device industries.

With the exception of a few agency insiders and Naderite holdouts, policy makers across the political spectrum plan to push the FDA to change its focus. Reformers want the agency to concentrate on more rapidly getting drugs and devices to doctors and patients rather than delaying, prosecuting, or otherwise scrutinizing the medical industry into bankruptcy.

But those who would remake the FDA face daunting challenges. The general public doesn't perceive a crisis in food, drug, and device approval, so there's no populist groundswell for systemic changes. Restructuring the FDA will require more than tweaking a few rules, because the agency operates separate divisions and issues unique regulations to control the food, drug, biotech, and device industries. And the industries under the FDA's thumb don't all support identical reforms: Food and additive suppliers are most concerned about labeling requirements; device makers, who weren't regulated by the FDA before 1976, would ideally remake the agency into a certifier, rather than an approver of products; and pharmaceutical companies would only tinker at the margins of reform--they've spent the past 30 years learning to game the system and gaining benefits from barriers the agency imposes on potential competitors.

Stories on the FDA's regulatory overkill abound. For instance, the FDA's Center for Devices and Radiological Health takes more than three times longer to approve a Class III or "substantial risk" medical device (such life-saving products as heart valves or CAT scanners) than do the agency's counterparts in Europe. As a result, U.S. device manufacturers are moving their product trials elsewhere. In the past 10 months, reports a survey published in June by the Health Industry Manufacturing Association, 50 percent of the more than 500 device makers surveyed had moved some clinical trials of new medical devices overseas; 56 percent refused to test new devices on Medicare patients; and 75 percent planned to move their trials to Europe.

Pharmaceuticals face similar delays. The average time it takes a drug company to develop and gain approval for a new drug has almost doubled over the past 30 years--from 8.1 years in the 1960s to 14.5 years today. And, reports the Pharmaceutical Research and Manufacturers of America (PhRMA), more than 60 percent of the new drugs and biologics (genetically engineered pharmaceuticals) approved here in the 1990s were first approved in another country.

The food industry is also eager to alleviate regulatory holdups. The Grocery Manufacturers Association says on average it takes the FDA more than five years to approve new food ingredients. And some ingredients have been kept off the shelves much longer; more than one-third of the food-additive petitions now pending at the FDA were filed between 1971 and 1989.

The American Enterprise Institute's Jack Calfee, former chief economist at the Federal Trade Commission, points out that food, drug, and device companies have little choice but to put up with such regulatory abuse. The FDA controls what a company can make; when those products can enter the market; how it manufactures those products; where it can sell them; where and under what circumstances it can promote what it makes; and even what its advertising and promotional literature can say.

Calfee argues that the only way to restrain the FDA's regulatory juggernaut is to break up the agency, placing food, drug, device, and advertising regulations into separate jurisdictions. Jeff Pierce, regulatory analyst for Citizens for a Sound Economy, agrees that serious regulatory reforms must get beyond finger-pointing and name-calling. Free marketeers and patient advocates have blamed FDA chief Kessler's headline-grabbing enforcement proceedings for causing much of the recent food, drug, and device delays. But, Pierce says, until the agency's power is reduced, even if a saint ran the FDA, unnecessary delays would continue.

Until this year, industry cries for congressional help had fallen mostly on deaf ears. The House subcommittee on health was chaired by Rep. Henry Waxman (D-Calif.), who would gleefully drag Kessler and his predecessors before the committee's klieg lights when an FDA-approved drug or device was recalled because it was less safe or effective than originally touted. Such scrutiny guaranteed front-page coverage for Waxman and his Naderite allies and gave the FDA big incentives to approve as few new drugs and devices as possible. Sam Kazman, general counsel for the Competitive Enterprise Institute, points out that "the easiest way to have zero recalls is to approve zero drugs and devices."

Since the November election, however, the mood on Capitol Hill has clearly changed. The rhetorical shift was best signaled at an April 6 hearing before the Senate Labor and Human Resources Committee. Sen. Barbara Mikulski (D-Md.), hardly a raving deregulator, upbraided Kessler for his agency's recalcitrance. "We need a sense of urgency, we need a commitment, we need a passion for change," she chided. "And if not, I think the Congress is going to roll right over you."

Congress started rolling a month later when, on May 11, the $16 billion 1995 rescissions package passed by the House and Senate killed funding for the agency's new home, an $810 million, 356 acre "campus" in rural Maryland. Citizens for a Sound Economy led the opposition to the new facilities, placing ads in D.C.-area publications comparing the campus to the Taj Mahal; having its chairman, former White House Counsel C. Boyden Gray, testify against the campus before congressional appropriators; and mobilizing its 250,000 members to contact legislators. The CSE-led opposition worked: The report issued with the rescissions package clearly stated that Congress wouldn't appropriate money for new FDA facilities before "any future FDA restructuring" took place.

Plans to restructure the agency are now circulating on Capitol Hill. The White House proposal would remove a few regulatory barriers and develop a "pilot" program to consider letting private parties review some low-risk medical devices. As with the rest of the National Performance Review, the White House wants to make the FDA more efficient, not necessarily less intrusive. Despite public endorsements of the plan by businesses, health care providers, and patient groups, in private few take this proposal seriously.

Meanwhile, Rep. Ron Wyden (D-Ore.), the self-described consumer advocate who five years ago used congressional hearings to call for tougher regulation of the $33 billion diet industry, has become a born-again deregulator. In early April, Wyden, the ranking Democrat on Barton's oversight subcommittee, outlined his proposals in an eight-page, single-spaced letter to President Clinton. Wyden decried the "bureaucratic structure of the FDA....Computers, biotechnology, and other innovations are producing better healthcare products which we can't allow to be stifled by a lethargic, slow-moving or insensitive approval process."

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