A Prescription for the FDA

For most of its existence, the Food and Drug Administration (FDA) has acted as the ultimate arbiter of American food and pharmaceutical safety. This role has prompted various commentators to call the FDA “the most powerful [federal] agency.”

In a recent paper, however, Professor Theodore Ruger of the University of Pennsylvania Law School warns that if the FDA continues on its current trajectory, it may soon become obsolete.   In his paper, “Failure by Obsolescence,” Ruger explains that unless the FDA adapts and becomes more flexible and responsive to the most pressing public health concerns, America’s policy solutions to food and drug issues will eventually rest in the hands of other regulators, including state, local, and other federal agencies, as well as private entities.

Ruger explains that when the FDA was created by the Pure Food and Drugs Act of 1906 and later reformulated by the Food, Drug and Cosmetic Act of 1938, the agency had a very specific regulatory posture. The agency aspired to be the absolute gatekeeper over foods and drugs and to offer a neutral and technical assessment of the safety and efficacy of those products.

The original posture of the agency has remained to this day, according to Ruger. The FDA regulates food and drug products through factual assessments made at certain well-defined moments in a product’s lifecycle.  The FDA’s primary regulatory goals center today around the products themselves, as opposed to the behavior of individuals consuming them, doctors prescribing them, or firms manufacturing them.

Ruger argues that this product-oriented focus may grow increasingly problematic because it fails to address the biggest public health concerns that America faces today.  In the area of food safety, while the FDA has helped make food more pathogen-free than before, the agency has not done enough to change the overall pattern of food consumption that is contributing to epidemics such as obesity, diabetes, and heart disease.

In the realm of drug policy, FDA’s success in blocking unsafe or ineffective drugs from getting on the market pales in comparison to the agency’s failure in controlling the rising prices of pharmaceuticals and physicians’ increasing off-label use of drugs. The FDA’s current regulatory regime, according to Ruger, leaves such behavioral and societal problems largely unaddressed.

Ruger posits that, with the current model, the FDA will continue to be ill-equipped at solving big problems. FDA is statutorily constrained from considering cost in new drug approvals. Ruger argues, though, that the agency could use its discretion to help ameliorate the problem of cost control without overstepping its congressional mandate. It could, for example, abandon placebo-controlled studies as the gold standard of new drug approval research in favor of comparative effectiveness research, which takes more factors into account and compares new drugs to others already on the market.

In addition, variability in physician behavior has been identified as a significant factor leading to rising healthcare costs.   Thus, FDA may wish to reassess its historical policy not to regulate the conduct of physicians, such as how and when they choose to prescribe drugs.

According to Ruger, food and drug regulation needs to, and increasingly is, heading in a new direction. First, regulations are becoming more complex and multimodal. For example, although the famous Brown & Williamson case stripped the FDA of jurisdiction over tobacco regulation, efforts by state and local governments, employers, and the Federal Trade Commission have all resulted in significant reduction in youth smoking rates, even without FDA intervention.

Second, regulation by payment is becoming more prominent. Public and private institutions spend large sums to affect consumer behavior on foods and drugs. The USDA, for example, spends over three times more annually on school lunch programs than FDA’s entire budget.  State Medicaid agencies and private health insurers are responsible for most of the country’s sales of pharmaceuticals. These funders are starting to attach more policy conditions to their reimbursement programs. Ruger predicts that the Center for Medicare and Medicaid Services will soon surpass FDA as the most important pharmaceutical policy maker.

Ultimately, Ruger argues that FDA could maintain its place of prominence only by exercising more flexibility and adapting to new threats. Some aspects of FDA’s unfortunate regulatory posture are, he admits, largely out of its control due to statutory constraints. However, FDA could exercise more discretion in some arenas and could position itself as the authority to deal with this country’s truly pressing food and drug issues.

Ruger’s paper appears as a chapter in the recently published book, Regulatory Breakdown: The Crisis of Confidence in U.S. Regulation, edited by Cary Coglianese and published by the University of Pennsylvania Press.