America’s Other Drug Problem

by | Feb 26, 2011 | Healthcare

If we eliminate the government interference that prevents valuable new drugs from reaching patients, we could save countless lives.
America has a serious drug problem, but it’s not one most Americans have heard of. The problem is not illegal drugs, but rather a critical shortage of many life-saving legal drugs. And the federal government is about to make things worse.During the past year, medical professionals have received alarming reports about critical shortages of important drugs. These drugs aren’t the common over-the-counter medications that consumers purchase in their local drugstores. Rather, the shortages are in various injectable drugs typically administered to seriously ill patients in hospitals.

Melly Alazraki of Daily Finance reports that the shortages include “vital medications such as chemotherapy, antibiotics, analgesics (painkillers), anesthetics and more.” ABC News details how Minnesota cancer patient Mark McKee was suddenly told at a scheduled chemotherapy session that the hospital did not have enough of the critical medication doxorubicin for his prescribed treatment. Despite the fact that his tumor had grown recently, his doctors told him he had to settle for a significantly reduced dose and hope that “something may be better than nothing.”

Of course, various factors can contribute to the shortage of any specific drug — for instance, a manufacturing problem at a key factory or difficulty obtaining a particular raw material from an unstable foreign country. But as ABC News notes, often the problem is simply that “the production cost outweighs the profits.” And a leading cause of this problem is the federal government, specifically in the form of the Food and Drug Administration (FDA).

FDA regulations impose an enormous financial burden on drug companies. In a detailed critique of the FDA, pharmaceutical industry writer Stella Daily Zawistowski observes that the FDA drug approval process currently costs companies approximately $800 million “from the time a molecule is discovered in the laboratory through animal trials and multiple stages of trials with human subjects.” Furthermore, the 20-year patent clock starts “ticking” once the drug is discovered, even though the drug approval process often takes more than 10 years. Hence, a company that spent enormous sums developing a new drug might enjoy less than half of that theoretical 20-year patent life to recover its initial investment before other companies start selling chemically identical cheaper “generic” versions.

In addition to stifling the development of new drugs, Zawistowski emphasizes that the FDA also distorts the market for the types of drugs being developed. It’s generally faster and cheaper for pharmaceutical companies to get FDA approval for “copycat” drugs that are minor variations of already-approved medications than to get approval for groundbreaking new drug categories. Hence, we see a plethora of cholesterol drugs, sleep aids, and antidepressants — and fewer advances in other vital categories, such as antibiotics effective against drug-resistant bacteria. In fact, UCLA medical school professor Dr. Brad Spellberg has warned that our pipeline of these vitally needed new medications is nearly empty because the FDA is “a huge impediment to getting a new antibiotic to market.”

The FDA drug approval process is so onerous that many experts believe that certain drugs currently in widespread use would never have been approved by today’s FDA — including penicillin, aspirin, and acetaminophen (Tylenol). In 2010, the FDA approved a mere 21 drugs — what the Wall Street Journal calls “a relatively modest figure” and a continuation of the “drought in recent years.”

The Obama administration has acknowledged that the slow pace of new drug development is a problem. However, their response is not to reduce government barriers to private drug development — but rather to create a new government agency to supposedly “fix” this problem. According to the New York Times, the Obama administration will create a “National Center for Advancing Translational Sciences” within the National Institutes of Health (NIH) to “help” promote new drug development. But many scientific and industry experts are deeply skeptical that this new program will succeed. As Wake Forest University biochemistry professor Mark Lively asks, “the NIH is not likely to be very good at drug discovery, so why are they doing this?”
There’s no reason to think that a government agency would be better at picking pharmaceutical winners and losers than a private company that has its own money on the line and is motivated to earn a profit. Rather than creating yet another bureaucracy to “encourage” the development of drugs the government deems worthy, the government should consider a radical alternative. It should reduce the regulatory burdens on the pharmaceutical industry by phasing out — and eventually abolishing — the FDA.

John Stossel and others have explained how abolishing the FDA and allowing private rating agencies to monitor the safety and effectiveness of drugs would better protect consumers against unsafe products.

Private ratings agencies already work superbly in other industries. The private Underwriters Laboratories (UL) tests and approves numerous products ranging from hair dryers to Christmas lights to bulletproof glass. Manufacturers gladly pay for their testing and certification because many retailers won’t stock products without the UL seal of approval.

Similarly, the Snell Memorial Foundation (SMF) performs similar testing and certification of safety helmets. As John Graham of the Pacific Research Institute writes [pdf]:

Many people engaged in activities for which helmets are an important safety feature, such as mountain biking, value the SMF certification, and this motivates manufacturers to submit their helmets for testing at their own cost although there is no legal requirement to do so.

The SMF limits itself to the business of researching and testing the effectiveness of helmets. It does not advocate for mandatory helmet laws and has never lobbied on any pertinent legislation.

The government does have a legitimate role in protecting Americans from force or fraud. Hence, if a drug company sells unsafe products under false pretenses, it can and should be punished. But otherwise, doctors and patients should be left free to exercise their own best rational judgment whether or not to use a drug based on the manufacturer’s truthfully reported test results (and the tests of independent rating agencies they trust).

In a free market, businesses prosper by selling products of value to their customers — not by killing those customers. The self-interest of patients and doctors seeking the best value for themselves in a highly competitive marketplace — and the self-interest of drug companies and independent rating agencies whose reputations are at stake — will be far more effective in protecting patient safety than a government bureaucrat punching a clock somewhere in Washington, D.C.

Abolishing the FDA would allow honest drug makers to produce (and doctors and patients to use) drugs according to their own best judgment free from government interference — as is their right. In such a free market, the result would be cheaper, more numerous, and more plentiful drugs.

Recall the words of Ayn Rand:

government “help” to business is just as disastrous as government persecution, and that the only way a government can be of service to national prosperity is by keeping its hands off.  (“Leave Us Alone,” Chapter 13, Capitalism: The Unknown Ideal)

Nowhere is this more true than in the pharmaceutical industry. Rather than government “help” in the form of a new federal agency — or further government hindrance in the form of the FDA — the government should simply get out of the way. If we eliminate the government interference that prevents valuable new drugs from reaching patients, we could save countless lives. And a few years from now, if you get sick and you need a powerful new antibiotic that is currently just a promising idea scribbled in a bright young scientist’s laboratory notebook, one of those lives saved might be your own.

This article originally appeared at PajamasMedia and is appearing on Capitalism Magazine with PJM’s permission. You can read the original article here.

Paul S. Hsieh, MD, is a physician in practice in the south Denver metro region and he is a founding member of the Colorado group "Freedom and Individual Rights in Medicine" (

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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