X-Message-Number: 547.4
Date: Fri, 6 Dec 91 16:47:23 EST
From: John G. Otto <>
Subject: FDA
To:
Reason 1976 March Spotlight column on Sam Peltzman, pg 38, and
Trends column "Federal Delay Agency", pg 33
"In his study of the effects of the 1962 amendments to the Food, Drug, and
Cosmetic Act, for example, Peltzman used a variety of statistical techniques
to evaluate the differences in behavior of drug companies, physicians, and
consumers before and after the amendments went into effect. (The amendments
grew out of the Kefauver hearings on the drug industry, and were spurred to
passage by the thalidomide incident of 1961-62; they imposed stringent new
requirements on drug companies to document the effectiveness, not merely
the safety, of new drugs before they can be allowed on the market.) Making
cautious and reasonable assumptions where data were lacking (always giving
the benefit of the doubt to the FDA), Peltzman came to some astounding
conclusions. The amendments, and the FDA's procedures for enforcing them:
* Cut in half the number of new drugs introduced each year, but did not
reduce the incidence of inefficacious drugs
* Doubled the cost of new drug development
* Increased drug prices by reducing competition among drugs, costing
consumers $50 million extra per year
* Imposed a net cost of $300-$400 million per year in terms of sickness
and death that could have been prevented by drugs withheld from the market."
"Drs. William Wardell and Louis Lasagna of the University of Rochester
School of Medicine and Dentistry identify and quantify the 'drug lag'
caused by FDA enforcement of the 1962 amendments. In their report
'Regulation and Drug Development', they point out that the average cost
of introducing a new drug in the US has increased from $1.3 million in 1968
to $10.5 million in 1975, just five years later. The average time between
submission and approval of a New Drug Application is now 5 to 7 years. As
a result, the US lags far behind most of Europe in taking advantage of new
drug technology [a fact about which the FDA brags!?!?...jgo]. Of 180 new
drugs introduced in America and Britain in the decade beginning in 1962,
98 are available only in Britain."
John G. Otto
------------------------------
Date: Mon, 09 Dec 91 19:14:49 EST
From: tom <>
Subject: FDA
To: "John G. Otto" <>
From: "John G. Otto" <>
Subject: FDA
> Reason 1976 March Spotlight column on Sam Peltzman, pg 38, and
> Trends column "Federal Delay Agency", pg 33
> "In his study of the effects of the 1962 amendments to the Food, Drug, and
> Cosmetic Act, for example, Peltzman used a variety of statistical techniques
> to evaluate the differences in behavior of drug companies, physicians, and
> consumers before and after the amendments went into effect. (The amendments
> grew out of the Kefauver hearings on the drug industry, and were spurred to
> passage by the thalidomide incident of 1961-62; they imposed stringent new
> requirements on drug companies to document the effectiveness, not merely
> the safety, of new drugs before they can be allowed on the market.) Making
> cautious and reasonable assumptions where data were lacking (always giving
> the benefit of the doubt to the FDA), Peltzman came to some astounding
> conclusions. The amendments, and the FDA's procedures for enforcing them:
the Peltzman study is amazing, if only because his assumptiong were so
generous to the FDA, and they still came out looking real bad. his major
assumptions were:
* the FDA allows no harmful drugs into the market
* no useful drugs are ever kept off the market completely by the FDA
* no drug is delayed from entering the market for more than 2 years
by the FDA
* companies will not be discouraged from attempting to introduce any
useful drug by the FDA
in reality, they do not even come close to any of these ideals.
> "Drs. William Wardell and Louis Lasagna of the University of Rochester
> School of Medicine and Dentistry identify and quantify the 'drug lag'
> caused by FDA enforcement of the 1962 amendments. In their report
> 'Regulation and Drug Development', they point out that the average cost
> of introducing a new drug in the US has increased from $1.3 million in 1968
> to $10.5 million in 1975, just five years later. The average time between
> submission and approval of a New Drug Application is now 5 to 7 years. As
in 1982 it was up to $56 million and 10-12 years. earlier this year they
announced that they would be making great efforts to streamline the approval
process which now takes 15 years. (their stated goal was 10 years) anyone
know the current avg cost to get a new drug (or a new use of a currently
approved drug) approved? many companies don't even bother trying to market
many new drugs here any more since they now have only 2 years in which to
attempt to recover the costs of FDA approval before their patents expire
and competitors can begin taking advantage of the new market.
> a result, the US lags far behind most of Europe in taking advantage of new
> drug technology [a fact about which the FDA brags!?!?...jgo]. Of 180 new
> drugs introduced in America and Britain in the decade beginning in 1962,
> 98 are available only in Britain."
it has only gotten worse in the last 15 years...
tom
------------------------------
Date: Tue, 19 Nov 91 20:26:19 EST
From: John G Otto <>
Subject: FDA, health care cost sources
To:
While indexing my back issues of Reason, I ran across a few references:
A) In the Health & Welfare column by Pearson & Shaw 1982 Jan...
Regulating New Drugs, edited by Richard L. Landau (Chicago: U of
Chicago Center for Policy Study, 1973, $5.50 paper). This economic
study provides an excellent analysis of the effects of regulations on
drug innovation and production in this country. Of particular
interest is Dr. Sam Peltzman's section, "The Benefits and Costs of
New Drug Regulation". He found that, considering costs and benefits,
consumers were losing at least $250*10^6 per year (in late 1960s dollars)
as a result of drug regulations requiring proof of efficacy (the 1962
Kefauver Amendments) using a set of assumptions that are incredibly
charitable to the FDA. Dr. Peltzman has shown that these amendments
which have increased the costs of and delayed drug approval, have
provided *no* significant increase in either safety or efficacy.
He has also demonstrated that the health costs of a *3 month* delay
in introducing a new drug exceed the health costs of a W German
thalidomide maxi-disaster once each decade! This book is a real eye
opener.
B) In the 1984 Jan Book Hints, page 56... Well known medical journalist
Harry Schwartz investigates and repudiates arguments in behalf of
national health insurance in his monograph "National Health Insurance"
(Dallas: National Center for Policy Analysis, 1983, 56 pages, paper).
Another look at health care is provided by Clark Havighurst in his
comprehensive critical assessment of regulatory policies in this field -
"Deregulating the Health Care Industry" (Cambridge, MA: Ballinger, 1982,
500 pages, $37.50).
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