Medicine's Missing Measure

Is excessive regulation to blame for stifling pharmaceutical research?

Sukree Sukplang/Reuters

Every day brings some new tale of horror; unsuspecting customers duped by a greedy pharma peddling a toxic drug or malfunctioning device. Headlines read: They Knew; Should Have Known; Could Have Prevented. Constant drumbeats reinforce the notion that, without Food & Drug Administration (FDA) oversight (and plenty of plaintiffs' lawyers), corpses would line the streets.

The FDA's mission is to protect the consumer. They are the white hats, the good guys who are perennially untroubled by imposing additional trials or larger patient population samples on manufacturers, or meticulous and lengthy decision making processes within universities and federal agencies. Why should they be? According to ex-FDA commissioner Alexander M. Schmidt: "In all of FDA's history, I am unable to find a single instance where a congressional committee investigated the failure of the FDA to approve a new drug. But, the times when hearings have been held to criticize our approval of new drugs have been so frequent that we aren't able to count them....The message to FDA staff could not be clearer."

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Imagine if we approached automotive safety in the same way that we approach drug and medical device safety. Would any new car model ever make it to the showroom? While each defensive regulatory decision is likely justified in and of itself, when you add them up, the costs begin to outweigh the benefits, or even common sense itself. In fact, the price of bringing a medicine to market, per billion spent, in constant dollars, has increased by a factor of 100 times over the last sixty years. This is Moore's Law in reverse.

Consequently, pharma has developed an ever greater fear of developing new medicines. The industry is fleeing its R&D roots and focusing more and more on mergers, and on flogging drugs and devices that have already been approved. By some estimates, current pharma sales and marketing budgets are already twice those of R&D.

This brings me to the topic of traffic jams.

There was a point, once upon a time, when cars on the Washington Beltway actually used to move, except in one place, which used to back up for miles every day at the same exact time. It drove traffic engineers nuts because there was no clear obstruction. Then someone finally realized that the jam was caused by a single citizen, one who commuted in the far left lane, driving exactly the speed limit for miles on end. After some furious volleys in the media, and plenty of curses along the roadway, the Washington Post received a letter that basically said: I'm John Nestor. I find it easier to drive on the left. I follow the speed limit. If anyone wants to speed that is their problem.

The outraged citizens of D.C. promptly coined a term for this type of excruciating law-abiding behavior: "Nestoring." All very funny, except that Mr. Nestor worked at the FDA, and was charged with making sure various compounds were safe. Not surprisingly, he did not find any drugs that satisfied this condition. After a few decades, Ralph Nader's Health Policy Group praised Mr. Nestor for "an unassailable record of protecting the public from harmful drugs," a standard one can apparently only meet if one never approves a single compound.

Presented by

Juan Enriquez is a managing director at Excel Venture Management, a venture capital firm investing in companies that apply life science technologies to solve problems in healthcare and beyond. He was the founding director of Harvard Business School’s Life Sciences Project.

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