How Can We Find the Optimum Regulation for Prescription Drugs?

Published August 1, 2007

The following is an excerpt from the booklet More Choices, Better Health: Free to Choose Experimental Drugs, by Bartley J. Madden–the third in a several-part series. The complete booklet is also available online at

When considering government health care policy, existing patients, not future ones, should be at the front of the line for care. This idea is rooted in the principle that society benefits both immediately and in the long run from freedom of choice and competition. Breaking the Food and Drug Administration’s (FDA) monopoly by legislating so competition can function would compel it to develop new ways of analyzing a broader spectrum of information.

If Congress is to push forward on the core principle of patient/doctor control of medical decisions, it is helpful to understand how the current system could be improved in order to reach the optimum level of regulation.

When politicians act to reduce government regulations in order to gain market benefits, some market supporters may dismiss the need for careful planning in the belief that Adam Smith’s invisible hand of the marketplace will automatically make any needed adjustments. Not so. Much care–a visible hand–needs to be given to institutional design to be sure it enables expanded choice and competition to operate.

California’s fatally flawed plan for deregulating electricity is a sobering demonstration of the crucial importance of institutional design when implementing deregulation.

The task, then, is to use competition to stimulate patients and their doctors, drug development firms, and FDA to continuously evaluate what best meets their needs and to develop better ways of doing things. As a practical matter, this requires two innovations.

One-Track System

First, the current one-track new-drug approval system, whereby FDA must approve all new drugs before they are made available to the public, must be augmented by the creation of another track–creating a dual-tracking system for experimental drugs.

Dual-tracking gives patients the freedom to choose FDA-approved drugs or experimental drugs. In exchange for the possibility of achieving health improvements by using drugs not otherwise available, consumers agree to take responsibility for the higher risks that attend the use of unapproved drugs.

Second, a new and robust information system is necessary to adequately inform patients and their doctors of the risk-reward tradeoffs of choosing experimental drugs. I call this system the Tradeoff Evaluation Database (TED) and will briefly describe how it could operate.

Providing consumers and doctors with objective data about experimental drugs is the key to making a dual-tracking system safe and workable, and also to promoting competition.

Dual-Tracking System

On one track, a new drug would continue along conventional FDA clinical testing procedures.

On a new, separate track independent of FDA (but only after the successful completion of FDA Phase I toxicity and safety evaluations), drug development firms would have the option to contract legally with consumers (individual patients advised by their doctors) to sell them drugs not yet approved by FDA.

To function successfully, dual-tracking requires consumers to be fully informed of the possible risks of using pre-FDA-approved drugs. This is the function of TED. TED would contain clinical and non-clinical trial results (including side effects) of drugs not yet approved by FDA. Patients and their doctors could access TED’s continuously updated, Internet-housed information to decide whether to try an experimental drug that has passed FDA Phase I safety trials.

A TED Web site would receive details from doctors about patient treatments, and this information would then be made available to drug developers and the public. In this way, a process would evolve for accelerating medical solutions in an increasingly effective manner.

Presumably, physicians would be enthusiastic about the TED opportunity to creatively utilize the unique knowledge built up over their medical careers. Communication of specific details of patients’ conditions and treatment results would help drug developers as well as other doctors.

New Database

Implementation of dual tracking would reveal how well or poorly patients fare who choose immediate access to experimental drugs. Other patients would soon learn about the outcomes and make more-informed choices for either experimental drugs or approved drugs. The total use of approved versus not-yet-approved drugs would be the aggregate of individual decisions.

The traditional FDA clinical trial track would remain unchanged and would continue to enable patients who prefer the least risk from unknown side effects of a developmental drug to await FDA drug approvals. Those who are on death’s doorstep could access TED to determine the most promising experimental drug, and most likely would choose to use it.

Anyone in the gray area between those two poles could access TED to help make their tradeoff decision on risk versus potential health improvement.

To maintain its regulatory monopoly, FDA would probably oppose this opportunity for patient/doctor control, even though the results would be uniquely useful for improving its own testing and approval procedures.

Informed Consent

A troublesome obstacle for drug developers who want to provide drugs not yet approved by FDA is their fear of lawsuits from people who experience adverse side effects. If not addressed, the threat of litigation would undermine dual tracking.

To prevent this, legislation needs to define the acceptable amount of information about experimental drugs deemed adequate so that patients and doctors can give informed consent, and then to grant immunity from tort liability to drug developers who follow this process.

To avoid lawsuits, drug developers would have to promptly and fully report all outcomes from the use of drug treatments not yet approved, including all adverse side effects.

Although the construction and operation of TED would likely be contracted out to a private-sector company, the government would maintain oversight to ensure adequate information is available publicly. Importantly, just as auditors are independent of the firms they audit, TED would have to operate independently from FDA.

Bartley J. Madden ([email protected]) is an independent researcher in Naperville, Illinois.