Market Failure and Drug Approval

Here’s a question for you true believers out there, is there a market failure rationale for FDA approval of pharmaceuticals and medical devices? And, if so, what is it?

Well, that’s exactly the question that Daniel Klein and Jason Briggeman of George Mason University asked more than 300 economists with expertise in health economics, the FDA, information and uncertainty, and regulatory policy.

They asked you, too, and you can check it out by participating in this 25-minute interactive exercise.

For those of you without 25 minutes, here’s a snippet:

Due to pre-market approval, drugmakers face costs, delays, and uncertainties that suppress the development of new therapies. Famous studies of the introduction of beta-blockers showed that many tens of thousands of American deaths could be attributed to the delay between approval in Britain and in the United States. Scores of other drugs have been delayed that plausibly would have saved many other lives. But pointing concretely to delays in the approval of well-known drugs can only illuminate a potentially larger problem: the extra costs and uncertainties imposed by the pre-market approval process may prevent the development of many drugs. Those losses–of not-developed drugs, of wouldhave-been benefits–are impossible to identify or quantify, but they are no less real.

I would be very interested to hear your thoughts both before and after your take the survey.