Prior to the 20th century there were only a handful of truly effective drugs. Oliver Wendell Holmes, Sr. quipped, "If all medicines in the world were thrown into the sea, it would be all the better for mankind and all the worse for the fishes.”
The most potent medicines at the time included opium, quinine, and anesthetics such as cocaine, ether, and nitrous oxide. Acting independently, druggists created the United States Pharmacopoeia (USP) and National Formulary to promote standards for composition, purity, and strength.
Federal drug laws were often enacted in the wake of a tragic event. The Biologics Act of 1902 passed after several children died from contaminated smallpox vaccines and diphtheria antitoxins. The Pure Food and Drugs Act passed in 1906 after a group of volunteers demonstrated the harmful effects of specific additives and preservatives on their own (!) digestive systems.
Even most critics of today’s Food and Drug Administration (FDA) recognize that the Biologics Act boosted safety and the Pure Food and Drugs Act promoted accurate labeling. However, the U.S. Supreme Court ruled that the government could not prosecute manufacturers for making debatable therapeutic claims because efficacy is often a matter of opinion. There had to be evidence of intentional fraud.
Harvey Washington Wiley, the U.S. Department of Agriculture’s first chief chemist, campaigned vigorously for the Pure Food and Drugs Act. However, his career shows that he also believed in industry self-regulation. He left the USDA Bureau of Chemistry in 1912 to run the Good Housekeeping Seal of Approval program.
The Harrison Narcotics Act of 1914 initiated federal regulation of opium. The Act required prescriptions for products exceeding specific dosages—forcing physicians and pharmacists to keep accurate records. Though the U.S. Constitution doesn’t grant the federal government the right to regulate either drugs or physicians, Congress cited the Commerce Clause as justification.
(The Commerce Clause says that the federal government has the power to regulate trade between the states. It was obviously intended as a limited power. However, the Commerce Clause has repeatedly been stretched to assert federal power over products that are produced, sold, and used in more than one state.)
The FDA is Born
In 1927 the USDA Bureau of Chemistry became the Food, Drug, and Insecticide Administration. The name was shortened to Food and Drug Administration in 1930. By this time aspirin, codeine, morphine, digitalis, nitroglycerin, and insulin were added to the list of truly effective drugs. Sulfa drugs and penicillin were introduced over the next decade.
The FDA enlarged its power following yet another tragedy. The pharmaceutical firm Massengill introduced a liquid form of a sulfa drug that had already passed repeated tests. However, the company neglected to test the solvent. More than 100 patients died from kidney failure. The FDA argued that existing laws were insufficient because the drug did not contain additional regulated ingredients and the company had not made fraudulent claims. Though the company was successfully sued for gross negligence, Congress went ahead and passed the Food, Drugs, and Cosmetic Act of 1938.
The Food, Drugs, and Cosmetic Act required manufacturers to file new drug applications (NDAs) before marketing new drugs. If the FDA did not respond within 60 days, then the drug was automatically approved. However, labeling and prescription requirements were also expanded. The Act made it clear that (regardless of the Commerce Clause) the FDA’s authority extended over all drugs and many dubious medical devices. More important, the FDA was empowered to take action against what it judged to be false claims.
The Durham-Humphrey Amendment passed in 1951 expanded the FDA’s power. The FDA became the sole judge of whether a new drug required a prescription. Physicians benefitted from the arrangement: If a consumer wanted a prescription drug, then that consumer had to visit a licensed physician.
Over the next decade the FDA acquired powers over pesticide residues and additives in food. Meanwhile, the list of truly effective drugs continued to expand. In fact, there was exuberance for what some were calling “magic bullets.” But to others the pharmaceutical industry’s success justified more regulations. A few politicians demanded federal control over competition and pricing.
The proposed Kefauver-Harris Amendments promised mandatory patent sharing. The amendments also required manufacturers to prove that their new drugs were safe and effective. At first, the Kefauver-Harris Amendments seemed destined to fail, as supporters did not have enough votes.
Once again, proponents exploited a human tragedy to snatch victory from the jaws of defeat. This tragedy did not even occur in the United States. The West German pharmaceutical company Grünenthal GmbH introduced thalidomide in 1957 to relieve morning sickness during early pregnancy. By 1962 it was clear that the drug caused still births and arrested limb development. An NDA for thalidomide had been submitted to the FDA, but fortunately the FDA delayed approval to investigate an unrelated problem.
Though there really was no urgent need for additional action in the U.S., the media sensationalized the “Thalidomide babies” and the Kefauver-Harris Amendments were passed in 1962. Only now the provisions concerning pricing and patents were dropped and new provisions requiring more exhaustive testing and granting the FDA greater power over manufacturing were added. The net effect was that it became harder for pharmaceutical companies to gain approval for new drugs, depriving physicians and patients of additional choices. Meanwhile, the FDA entered a period of rapid growth, expanding from 1,000 to 6,500 employees over the next 20 years. The FDA’s authority to approve or deny new drugs based on efficacy was now firmly enshrined in the laws of the land.
The folly of testing efficacy is that a drug does not have to help all or even most patients to be of value. Plus, there is as much to learn about a drug after it has been introduced, but almost nothing is learned once it has been denied. As we will see in Part 2, the delays incurred performing exhaustive tests often contribute to the deaths of patients who have otherwise run out of options. The net effect of the Kefauver-Harris Amendments was that fewer new drugs were developed, and obtaining FDA approval now took as long as 20 years.
The FDA and Medical Devices
At first the FDA tried to regulate medical devices such as pacemakers simply by classifying them as drugs. That didn’t work—but the Dalkon Shield tragedy certainly did. The Dalkon Shield was a contraceptive intrauterine device (IUD). Manufactured by Dalkon Corporation and marketed by the A.H. Robins Company, the product caused severe pelvic infections, leading to more than 300,000 lawsuits.
The Medical Device Amendments of 1976 defined three classes of medical devices. Class I devices are disposable products such as gauze and are subject to Good Manufacturing Practices (GMP) regulations. Class II devices are subject to additional controls and include products such as surgical drapes and infusion pumps. Class III devices are products such as pacemakers that are used to sustain health. The approval process for Class III devices is as rigorous and extensive as the approval process for new drugs.
Bizarrely, all new medical devices were assumed to be Class III devices. If the manufacturer could show that a new medical device was “substantially equivalent” to a pre-amendment device or any currently marketed Class I or Class II device, then the premarket approval process could be avoided. However, “substantially equivalent” devices still had to comply with the 510(k) premarket notification process. And in another bizarre twist, the FDA failed to develop any medical device performance standards until 1997, rendering Class II irrelevant for the first twenty years.
Reversing the Damage
As the FDA’s power continued to mushroom, and as winning approval for new drugs and devices became more arduous, more patients suffered. The investment required to win approval for a new drug discouraged the development of drugs for niche markets—drugs for rare diseases (including, for example, cystic fibrosis) and drugs targeting a subset of patients.
The Orphan Drug Act of 1983 was designed to encourage development of drugs for conditions affecting fewer than 200,000 people in the United States. This was to be accomplished not by relaxing the approval process but by offering subsidies, tax breaks, and exclusivity (temporary monopolies).
Government regulations often have unintended consequences. Some companies discover ways around the regulations. Other companies find unanticipated ways to profit from regulations. While many drugs have been granted orphan drug status, not all deserved the perks. For example, a drug may be granted orphan status for one condition and then granted orphan status for another. And because orphan status is based on the U.S. market, there may still be a large global market for an orphan drug. Finally, the number of people who suffer from a condition may grow significantly over time. AZT started as an orphan drug but with the spread of AIDS has racked up sales in the billions of dollars.
Another problem caused by FDA regulations concerns patents. Drugs may be patented, but patent protection is only good for seventeen years. For most products seventeen years seems generous. But what about a drug that takes fourteen years to win approval? A generic version may be marketed by competitors just three years after the original drug is approved.
The Waxman-Hatch Act of 1984 extended patent protection for drugs delayed by the approval process. It also made it easier to gain approval for generic drugs (which up to then had to repeat much of the safety and efficacy testing performed by the inventor). Specifically, the Waxman-Hatch Act allowed the manufacturer of a generic drug to submit an abbreviated new drug application (ANDA).
The Drug Export Amendment Act of 1986 reversed the FDA decision that made it illegal for manufacturers to export drugs that had not been approved for sale in the United States. However, there were three major restrictions. The Act required that the manufacturer be actively seeking FDA approval, that the drug be covered by a U.S. investigational exemption, and that the drug be for export to a country that has already approved it through a regulatory process meeting specific standards.
Subsequent legislation repaired some of the damage caused by the FDA while inflicting new damage. The Safe Medical Device Act (SMDA) of 1990 finally enabled the approval of Class II products by facilitating performance standards and adding controls such as post-market surveillance. In other words, approval would be granted with the understanding that manufacturers would closely monitor the products in the field.
The Prescription Drug User Fee Act (PDUFA) of 1992 was designed to speed review of new drug applications. The FDA had a backlog of NDAs but Congress was unwilling to increase the FDA’s budget. The PDUFA allowed the FDA to charge pharmaceutical companies approximately $200,000 per application, which could be used to hire more application examiners. However, there was one catch: the PDUFA had to be renewed by Congress every five years. While the average time to review an NDA dropped from 30 months to 18 months, the user fees increased. However, there is evidence that the savings to manufacturers (due to faster drug approval) exceeded the added user fees.
Criticism from all Directions
The FDA aspires to do much more—to regulate more products and to educate citizens about more threats. However, the more power the FDA has to control products and tell citizens what to believe, the less freedom there is for individuals. A government can continue piling on laws and regulations in an effort to eliminate all safety hazards, but after the first layer or two there are diminishing returns. The only way to eliminate all product safety hazards is to eliminate all products.
Governmental zeal for teaching citizens what is and is not good for them is beyond the pale. At a minimum, it assumes that government knows what is best with absolute certainty. In the worst case, it puts the country on a path to totalitarianism.
The FDA has tried to regulate herbs, vitamins, and other dietary supplements since the 1950s. However, the FDA crossed the line when it prosecuted retailers for selling books along with vitamins, claiming that the books served as surrogate product labels. Many people saw these actions as an assault on freedom of speech.
Many of the same people who don’t trust pharmaceutical companies also don’t want the FDA restricting access to herbs, vitamins, and dietary supplements. After all, there have been conflicting studies regarding the efficacy of these products. Should the FDA be able to restrict access to specific products just because they have not been proven beneficial?
After 38 deaths were (falsely) attributed to L-tryptophan, the FDA announced plans to regulate a wide range of dietary and nutritional supplements. Millions of consumers were outraged. The Dietary Supplement Health and Education Act (DSHEA) of 1994 ordered the FDA to revoke its plans. The Act further allowed supplement manufacturers to make nutritional claims—but not disease-fighting claims. However, supplements making nutritional claims were required to include the disclaimer: “This statement has not been evaluated by the Food and Drug Administration. This product is not intended to diagnose, treat, cure, or prevent any disease.” (The first sentence is clearly true, but the second sentence is mere bluster.) The DSHEA also prohibited the FDA from taking action against retailers selling dietary supplements plus books and magazines about such supplements.
The FDA Modernization Act of 1997 was part of a larger deregulation push, though it ended up being a much tamer piece of legislation than its originators hoped. The Act mainly codified changes already being practiced and added a few half measures. It did not substantially rollback the FDA’s power.
How the FDA Got to Where It Is
The FDA’s history can be divided into three stages. The first stage, the period from roughly 1902 to 1930, saw the development of safety and labeling regulations that were for the most part beneficial. During the second stage, from approximately 1930 to 1983, the FDA exploited a few human tragedies to greatly expand its powers. The FDA even turned disastrous events in Europe to its advantage. During the third stage, the period from about 1983 to today, there have been multiple attempts to reform the FDA, with very little success. Only the dietary supplement industry has been able to muster the forces needed to resist FDA aggression.
The FDA remains extremely powerful and has successfully deflected efforts to enact badly needed reforms.
Sources:
Klein, Daniel B. and Tabarrok, Alexander, “History of Federal Regulation: 1902–Present,” The Independent Institute.
http://www.fdareview.org/history.shtml
Madden, Bartley J.,
Free To Choose Medicine: Better Drugs Sooner at Lower Cost, Second Edition, LearningWhatWorks, Naperville, Illinois, 2012
“History of the Food and Drug Administration,” Wikipedia,
https://en.wikipedia.org/wiki/History_of_the_Food_and_Drug_Administration
Next: How the FDA Harms Patients, Physicians, and the Health Care Industry