[Source: The Economics of Health and Health Care, Folland et al.]
The Food and Drug Admininstration (FDA) approval process for a new drug is costly and time consuming. A new firm will find it difficult to marshal the financial and expert resources needed to go through the process, and especially to have a portfolio of products under development to spread risks. Only one of about 5,000 to 10,000 chemical compounds screened ultimately is approved as a drug, and of those reaching the market stage, only 3 of 10 products ever become profitable. [See PhRMA (2001) and Grabowski and Vernon (1994)]. Not surprisingly, such odds (3 in 50,000 - 100,000 chemical compounds) create formidable deterrence to new drug development, and new pharmaceutical firms often concentrate on generic products.
FDA review has become a lenghty, complex process. Following the discovery stage during whic new chemicals are synthesized, the firm conducts preclinical animal studies involving short-term toxicity and safety tests. The drug firm next must file an application with the FDA to conduct clinical trials. If approved, the trials are conducted in three phases. Phase I begins with small groups of healthy volunteers and focuses on safety and dosage. Phase II trials involve a larger number of subjects, often several hundred who have the targeted condition, and concentrates on the drug's efficacy. Stage III trials usually are conducted on thousands of patients in different settings so that safety and efficacy can be determined more precisely.
If these trials indicate safety and efficacy and the drug's safety is supported by long-term animal studies, the company submits a New Drug Application (NDA) containing all the data and results to the FDA. The FDA review usually takes more than a year. Total development time for a new product stands at about 14 years [in 2004], nearly double the eight-year period in the 1960s. A 2001 estimate placed the average investment for an approved new drug at more than $800 million. See Ceci Connolly, Price Tag for a New Drug, wash. Post, Dec.1, 2001, at A10 (adding that the figure had more than tripled in the space of a decade, largely because of demands for larger and more complex trials). In 1998, analysts estimated that the pharmaceutical industry spent approximately $21 billion on R&D.
In a classic study of the 1962 amendments, Peltzman (1974) found a sharp decline in new product development, especially of innovative drugs, after 1962, as well as higher prices from the decreased competition. The FDA recognized these problems and in the mid-1970s developed policies to accelerate the review of "important" drugs. Dranove and Meltzer (1994) found that important drugs reach the market about three years sooner than other drugs. A 1984 act also eliminated the full range of tests for generic products that were required by the 1962 amendments.
To expedite the review process, 1992 legislation and the Modernization Act of 1997 provide the FDA with additional resources derived from user fees levied on the industry. This has considerably reduced approval times. The 1997 act also includes many other provisions that will result in a major reorganization of the FDA.
*****
The following was reported in Health and Life Sciences Law Daily, August 1, 2007:
Professor calls for FDA to return to "context-sensitive" regulation of new drugs.
In a commentary in the Wall Street Journal (8/1, A15), Dr. Richard Miller, president and CEO of Pharmacyclics, and adjunct professor of oncology at Stanford University Medical Center, writes, "The most welcome news a cancer patient can hear from their doctor is: 'Your tumor is regressing.'" However, current FDA policies "are discouraging the development of groundbreaking treatments for cancer and other killer diseases, turning the clock back on hard-won regulations put in place in response to the AIDS crisis that allow patients faster access to new drugs." Miller points out GPC Biotech, a company that "withdrew its New Drug Application (NDA) for Satraplatin, a drug to treat prostate cancer," because it was facing FDA rejection. Miller continues, "For patients with life-threatening diseases and their families, the implications of the FDA's recent regressive trend are devastating. It may be acceptable for regulators to be risk-averse when considering drugs for routine or nonserious diseases where alternative therapies exist. But this mindset is simply irrational when it comes to drugs intended to treat patients suffering from deadly diseases." He concludes, "Congress should require the FDA to follow the existing regulations on accelerated approval. Only then will we be able to make the progress we need in the fight against killer diseases like cancer."
****
See this posting for further information on the FDA's regulation of drugs
Wednesday, August 1, 2007
A Look Back at the Rand Health Insurance Experiment (RHIE) in 1982
[Source: The Economics of Health and Health Care, Folland et al.]
The Rand Health Insurance Experiment (RHIE) was one of the largest, randomly controlled economic experiments ever conducted. It was designed to test the effect of alternative health insurance policies on the demand for health care and on the health status of a large and closely watched group of people from all walks of life.
Partial findings of the RHIE:
The Rand Health Insurance Experiment (RHIE) was one of the largest, randomly controlled economic experiments ever conducted. It was designed to test the effect of alternative health insurance policies on the demand for health care and on the health status of a large and closely watched group of people from all walks of life.
Partial findings of the RHIE:
- The greater the portion of their health care bill that individuals are required to pay, the less health care they choose to purchase. Duh. But, what is surprising is how much the difference is - the fully insured purchased roughly 40 percent more health care than those who had to pay their own bills.
- Did this mean that those fully (freely) insured were 40% more healthy? NO! The researchers summarized their findings: "Our results show that the 40 percent increase in services on the free-care plan had little or no effect on health status for the average adult."
- The effects on children showed a somehwat similar pattern. Children under the cost-sharing plans consumed up to one-third less care. However, the reduction in care was not significantly related to health status measures.
Canadian Healthcare Doesn't Measure Up
[Source: "The Ugly Truth About Canadian Health Care" by David Gratzer, City Journal, Summer 2007]
Complete article here or here.
Socialized medicine has meant rationed care and lack of innovation. Small wonder Canadians are looking to the market.
. . . .
But single-payer systems—confronting dirty hospitals, long waiting lists, and substandard treatment—are starting to crack. . . .Canadian newspapers are now filled with stories of people frustrated by long delays for care:
"vow broken on cancer wait times: most hospitals across canada fail to meet ottawa’s four-week guideline for radiation"
"patients wait as p.e.t. scans used in animal experiments"
"back patients waiting years for treatment: study"
"the doctor is . . . out"
As if a taboo had lifted, government statistics on the health-care system’s problems are suddenly available. In fact, government researchers have provided the best data on the doctor shortage, noting, for example, that more than 1.5 million Ontarians (or 12 percent of that province’s population) can’t find family physicians. Health officials in one Nova Scotia community actually resorted to a lottery to determine who’d get a doctor’s appointment.
. . . .
Rick Baker helps people, and sometimes even saves lives. He describes a man who had a seizure and received a diagnosis of epilepsy. Dissatisfied with the opinion—he had no family history of epilepsy, but he did have constant headaches and nausea, which aren’t usually seen in the disorder—the man requested an MRI. The government told him that the wait would be four and a half months. So he went to Baker, who arranged to have the MRI done within 24 hours—and who, after the test discovered a brain tumor, arranged surgery within a few weeks.
Baker isn’t a neurosurgeon or even a doctor. He’s a medical broker, one member of a private sector that is rushing in to address the inadequacies of Canada’s government care. Canadians pay him to set up surgical procedures, diagnostic tests, and specialist consultations, privately and quickly. “I don’t have a medical background. I just have some common sense,” he explains. “I don’t need to be a doctor for what I do. I’m just expediting care.”
He tells me stories of other people whom his British Columbia–based company, Timely Medical Alternatives, has helped—people like the elderly woman who needed vascular surgery for a major artery in her abdomen and was promised prompt care by one of the most senior bureaucrats in the government, who never called back. “Her doctor told her she’s going to die,” Baker remembers. So Timely got her surgery in a couple of days, in Washington State. Then there was the eight-year-old badly in need of a procedure to help correct her deafness. After watching her surgery get bumped three times, her parents called Timely. She’s now back at school, her hearing partly restored. “The father said, ‘Mr. Baker, my wife and I are in agreement that your star shines the brightest in our heaven,’ ” Baker recalls. “I told that story to a government official. He shrugged. He couldn’t fucking care less.”
Not everyone has kind words for Baker. A woman from a union-sponsored health coalition, writing in a local paper, denounced him for “profiting from people’s misery.” When I bring up the comment, he snaps: “I’m profiting from relieving misery.” Some of the services that Baker brokers almost certainly contravene Canadian law, but governments are loath to stop him. “What I am doing could be construed as civil disobedience,” he says. “There comes a time when people need to lead the government.”
Baker isn’t alone: other private-sector health options are blossoming across Canada, and the government is increasingly turning a blind eye to them, too, despite their often uncertain legal status. Private clinics are opening at a rate of about one a week. Companies like MedCan now offer “corporate medicals” that include an array of diagnostic tests and a referral to Johns Hopkins, if necessary. Insurance firms sell critical-illness insurance, giving policyholders a lump-sum payment in the event of a major diagnosis; since such policyholders could, in theory, spend the money on anything they wanted, medical or not, the system doesn’t count as health insurance and is therefore legal. Testifying to the changing nature of Canadian health care, Baker observes that securing prompt care used to mean a trip south. These days, he says, he’s able to get 80 percent of his clients care in Canada, via the private sector.
Another sign of transformation: Canadian doctors, long silent on the health-care system’s problems, are starting to speak up. Last August, they voted Brian Day president of their national association. A former socialist who counts Fidel Castro as a personal acquaintance, Day has nevertheless become perhaps the most vocal critic of Canadian public health care, having opened his own private surgery center as a remedy for long waiting lists and then challenged the government to shut him down. “This is a country in which dogs can get a hip replacement in under a week,” he fumed to the New York Times, “and in which humans can wait two to three years.”
And now even Canadian governments are looking to the private sector to shrink the waiting lists. Day’s clinic, for instance, handles workers’-compensation cases for employees of both public and private corporations. In British Columbia, private clinics perform roughly 80 percent of government-funded diagnostic testing. In Ontario, where fealty to socialized medicine has always been strong, the government recently hired a private firm to staff a rural hospital’s emergency room.
This privatizing trend is reaching Europe, too. Britain’s government-run health care dates back to the 1940s. Yet the Labour Party—which originally created the National Health Service and used to bristle at the suggestion of private medicine, dismissing it as “Americanization”—now openly favors privatization. Sir William Wells, a senior British health official, recently said: “The big trouble with a state monopoly is that it builds in massive inefficiencies and inward-looking culture.” Last year, the private sector provided about 5 percent of Britain’s nonemergency procedures; Labour aims to triple that percentage by 2008. The Labour government also works to voucherize certain surgeries, offering patients a choice of four providers, at least one private. And in a recent move, the government will contract out some primary care services, perhaps to American firms such as UnitedHealth Group and Kaiser Permanente.
Sweden’s government, after the completion of the latest round of privatizations, will be contracting out some 80 percent of Stockholm’s primary care and 40 percent of its total health services, including one of the city’s largest hospitals. Since the fall of Communism, Slovakia has looked to liberalize its state-run system, introducing co-payments and privatizations. And modest market reforms have begun in Germany: increasing co-pays, enhancing insurance competition, and turning state enterprises over to the private sector (within a decade, only a minority of German hospitals will remain under state control). It’s important to note that change in these countries is slow and gradual—market reforms remain controversial. But if the United States was once the exception for viewing a vibrant private sector in health care as essential, it is so no longer.
Yet even as Stockholm and Saskatoon are percolating with the ideas of Adam Smith, a growing number of prominent Americans are arguing that socialized health care still provides better results for less money. “Americans tend to believe that we have the best health care system in the world,” writes Krugman in the New York Times. “But it isn’t true. We spend far more per person on health care . . . yet rank near the bottom among industrial countries in indicators from life expectancy to infant mortality.”
. . . .
And if we measure a health-care system by how well it serves its sick citizens, American medicine excels. Five-year cancer survival rates bear this out. For leukemia, the American survival rate is almost 50 percent; the European rate is just 35 percent. Esophageal carcinoma: 12 percent in the United States, 6 percent in Europe. The survival rate for prostate cancer is 81.2 percent here, yet 61.7 percent in France and down to 44.3 percent in England—a striking variation.
Complete article here or here.
Socialized medicine has meant rationed care and lack of innovation. Small wonder Canadians are looking to the market.
. . . .
But single-payer systems—confronting dirty hospitals, long waiting lists, and substandard treatment—are starting to crack. . . .Canadian newspapers are now filled with stories of people frustrated by long delays for care:
"vow broken on cancer wait times: most hospitals across canada fail to meet ottawa’s four-week guideline for radiation"
"patients wait as p.e.t. scans used in animal experiments"
"back patients waiting years for treatment: study"
"the doctor is . . . out"
As if a taboo had lifted, government statistics on the health-care system’s problems are suddenly available. In fact, government researchers have provided the best data on the doctor shortage, noting, for example, that more than 1.5 million Ontarians (or 12 percent of that province’s population) can’t find family physicians. Health officials in one Nova Scotia community actually resorted to a lottery to determine who’d get a doctor’s appointment.
. . . .
Rick Baker helps people, and sometimes even saves lives. He describes a man who had a seizure and received a diagnosis of epilepsy. Dissatisfied with the opinion—he had no family history of epilepsy, but he did have constant headaches and nausea, which aren’t usually seen in the disorder—the man requested an MRI. The government told him that the wait would be four and a half months. So he went to Baker, who arranged to have the MRI done within 24 hours—and who, after the test discovered a brain tumor, arranged surgery within a few weeks.
Baker isn’t a neurosurgeon or even a doctor. He’s a medical broker, one member of a private sector that is rushing in to address the inadequacies of Canada’s government care. Canadians pay him to set up surgical procedures, diagnostic tests, and specialist consultations, privately and quickly. “I don’t have a medical background. I just have some common sense,” he explains. “I don’t need to be a doctor for what I do. I’m just expediting care.”
He tells me stories of other people whom his British Columbia–based company, Timely Medical Alternatives, has helped—people like the elderly woman who needed vascular surgery for a major artery in her abdomen and was promised prompt care by one of the most senior bureaucrats in the government, who never called back. “Her doctor told her she’s going to die,” Baker remembers. So Timely got her surgery in a couple of days, in Washington State. Then there was the eight-year-old badly in need of a procedure to help correct her deafness. After watching her surgery get bumped three times, her parents called Timely. She’s now back at school, her hearing partly restored. “The father said, ‘Mr. Baker, my wife and I are in agreement that your star shines the brightest in our heaven,’ ” Baker recalls. “I told that story to a government official. He shrugged. He couldn’t fucking care less.”
Not everyone has kind words for Baker. A woman from a union-sponsored health coalition, writing in a local paper, denounced him for “profiting from people’s misery.” When I bring up the comment, he snaps: “I’m profiting from relieving misery.” Some of the services that Baker brokers almost certainly contravene Canadian law, but governments are loath to stop him. “What I am doing could be construed as civil disobedience,” he says. “There comes a time when people need to lead the government.”
Baker isn’t alone: other private-sector health options are blossoming across Canada, and the government is increasingly turning a blind eye to them, too, despite their often uncertain legal status. Private clinics are opening at a rate of about one a week. Companies like MedCan now offer “corporate medicals” that include an array of diagnostic tests and a referral to Johns Hopkins, if necessary. Insurance firms sell critical-illness insurance, giving policyholders a lump-sum payment in the event of a major diagnosis; since such policyholders could, in theory, spend the money on anything they wanted, medical or not, the system doesn’t count as health insurance and is therefore legal. Testifying to the changing nature of Canadian health care, Baker observes that securing prompt care used to mean a trip south. These days, he says, he’s able to get 80 percent of his clients care in Canada, via the private sector.
Another sign of transformation: Canadian doctors, long silent on the health-care system’s problems, are starting to speak up. Last August, they voted Brian Day president of their national association. A former socialist who counts Fidel Castro as a personal acquaintance, Day has nevertheless become perhaps the most vocal critic of Canadian public health care, having opened his own private surgery center as a remedy for long waiting lists and then challenged the government to shut him down. “This is a country in which dogs can get a hip replacement in under a week,” he fumed to the New York Times, “and in which humans can wait two to three years.”
And now even Canadian governments are looking to the private sector to shrink the waiting lists. Day’s clinic, for instance, handles workers’-compensation cases for employees of both public and private corporations. In British Columbia, private clinics perform roughly 80 percent of government-funded diagnostic testing. In Ontario, where fealty to socialized medicine has always been strong, the government recently hired a private firm to staff a rural hospital’s emergency room.
This privatizing trend is reaching Europe, too. Britain’s government-run health care dates back to the 1940s. Yet the Labour Party—which originally created the National Health Service and used to bristle at the suggestion of private medicine, dismissing it as “Americanization”—now openly favors privatization. Sir William Wells, a senior British health official, recently said: “The big trouble with a state monopoly is that it builds in massive inefficiencies and inward-looking culture.” Last year, the private sector provided about 5 percent of Britain’s nonemergency procedures; Labour aims to triple that percentage by 2008. The Labour government also works to voucherize certain surgeries, offering patients a choice of four providers, at least one private. And in a recent move, the government will contract out some primary care services, perhaps to American firms such as UnitedHealth Group and Kaiser Permanente.
Sweden’s government, after the completion of the latest round of privatizations, will be contracting out some 80 percent of Stockholm’s primary care and 40 percent of its total health services, including one of the city’s largest hospitals. Since the fall of Communism, Slovakia has looked to liberalize its state-run system, introducing co-payments and privatizations. And modest market reforms have begun in Germany: increasing co-pays, enhancing insurance competition, and turning state enterprises over to the private sector (within a decade, only a minority of German hospitals will remain under state control). It’s important to note that change in these countries is slow and gradual—market reforms remain controversial. But if the United States was once the exception for viewing a vibrant private sector in health care as essential, it is so no longer.
Yet even as Stockholm and Saskatoon are percolating with the ideas of Adam Smith, a growing number of prominent Americans are arguing that socialized health care still provides better results for less money. “Americans tend to believe that we have the best health care system in the world,” writes Krugman in the New York Times. “But it isn’t true. We spend far more per person on health care . . . yet rank near the bottom among industrial countries in indicators from life expectancy to infant mortality.”
. . . .
And if we measure a health-care system by how well it serves its sick citizens, American medicine excels. Five-year cancer survival rates bear this out. For leukemia, the American survival rate is almost 50 percent; the European rate is just 35 percent. Esophageal carcinoma: 12 percent in the United States, 6 percent in Europe. The survival rate for prostate cancer is 81.2 percent here, yet 61.7 percent in France and down to 44.3 percent in England—a striking variation.
Clark v. South Central Correctional Facility
Source: 2007 WL 2093693 (July 17, 2007 Tenn.Ct.App.)
Patient brought a medical malpractice action against medical center and nurse. The Law Court, Sullivan County, Richard E. Ladd, J., granted summary judgment in favor of medical center and nurse, and patient appealed. The Court of Appeals, Charles D. Susano, Jr., J., held that statute of limitations began to run on patient's claim no later than the date she called hospital advocate. Affirmed.
Notes:
The discovery rule serves as a shield to a limitations defense only when the medical malpractice plaintiff does not discover or could not have reasonably discovered that he or she had a cause of action. West's T.C.A. § 29-26- 116(a)(2).
A medical malpractice plaintiff need not actually know the specific type of legal claim he or she has in order for the statute of limitations to commence, so long as the plaintiff is aware of facts sufficient to put a reasonable person on notice that he has suffered an injury as a result of wrongful conduct. West's T.C.A. § 29-26-116(a)(2).
It is not required that a medical malpractice plaintiff actually know that the injury constitutes a breach of the appropriate legal standard in order to discover that he has a "right of action"; the plaintiff is deemed to have discovered the right of action if he is aware of facts sufficient to put a reasonable person on notice that he has suffered an injury as a result of wrongful conduct. West's T.C.A. § 29-26-116(a)(2).
It was improper for medical malpractice plaintiff, a lay person, to express an opinion during her deposition on the effect the medications she was taking at the time of the deposition had on her "perception and understanding and [her] mental abilities"; this was a medical opinion.
Patient brought a medical malpractice action against medical center and nurse. The Law Court, Sullivan County, Richard E. Ladd, J., granted summary judgment in favor of medical center and nurse, and patient appealed. The Court of Appeals, Charles D. Susano, Jr., J., held that statute of limitations began to run on patient's claim no later than the date she called hospital advocate. Affirmed.
Notes:
The discovery rule serves as a shield to a limitations defense only when the medical malpractice plaintiff does not discover or could not have reasonably discovered that he or she had a cause of action. West's T.C.A. § 29-26- 116(a)(2).
A medical malpractice plaintiff need not actually know the specific type of legal claim he or she has in order for the statute of limitations to commence, so long as the plaintiff is aware of facts sufficient to put a reasonable person on notice that he has suffered an injury as a result of wrongful conduct. West's T.C.A. § 29-26-116(a)(2).
It is not required that a medical malpractice plaintiff actually know that the injury constitutes a breach of the appropriate legal standard in order to discover that he has a "right of action"; the plaintiff is deemed to have discovered the right of action if he is aware of facts sufficient to put a reasonable person on notice that he has suffered an injury as a result of wrongful conduct. West's T.C.A. § 29-26-116(a)(2).
It was improper for medical malpractice plaintiff, a lay person, to express an opinion during her deposition on the effect the medications she was taking at the time of the deposition had on her "perception and understanding and [her] mental abilities"; this was a medical opinion.
History of the Food and Drug Administration (FDA)
[source: Peter Barton Hutt, The Transformation of United States Food and Drug Law]
The FDA regulates a wide range of consumer products, including food, food additives, dietary supplements, human and animal drugs, medical devices, and cosmetics.
Our modern era of food and drug regulation began with the work of scientists and legislatures in the 19th century in England and America. Between 1850 and 1900 virtually every state enacted some form of food and drug statute.
When the United States Department of Agriculture (USDA) was created by Congress in 1862, the Chemical Laboratory was designated as the USDA Chemical Division. During the first 45 years of its existenc--from 1862 to 1906--FDA (defined broadly to include its predecessor agencies) had no statutes to enforce. The FDA initially conducted its business in accordance with its formal title, the Division of Chemistry. It analyzed the food supply and provided advice to other parts of te Department on all aspects of agriculural chemistry but did not engage with the states in establishing national regulatory policy.
In 1897, the National Board of Trade (the predecessor to our current United States Chamber of Commerce) adopted a resolution establshing $1,000 in prize money for the best three drafts of a national food adulteration statute. The winning draft (by George W. Winger) ultimately became part of the Federal Food and Drugs Act of 1906 and the Federal Food, Drug and Cosmetic Act of 1938 and still can be found in the law today. At the time, however, there was a powerful obstacle in theh way. A majority of Congress firmly believed that regulation of the manufacture and sale of food and drugs within the United States involved local matters that the Constitution left entirely to the states.
Regulation of biological products represents the oldest form of government regulation of business in our country. In fact, the FDA is our oldest federal regulatory agency, and for decades it was the only federal agency charged with jurisdiction over a broad range of consumer products. (The EPA, OSHA, CPSC are all of relatively recent origin, created during 1970-72).
In 1901 contaminated smallpox vaccine caused an outbreak of tetanus in Cambeden and a lot of tetanus-infected diphtheria antitoxin resulted in the death of several children in Saint Louis. Congress promptly enacted the Biologics Act of 1902. The 1902 Act represented a turning point in the history of food and drug regulation. For the first time in history, a statute required premarket approval by the government of a category of consumer products before any product within that category could be lawfully marketed. The 1902 Act required government approval of a product license application and an establishment license application for every biological drug intended for human use. A similar act wasn't passed for another fifty years.
For roughly the first half of its existence, until 1940, FDA remained a component of USDA. The agency was transferred to the Federal Security Agency in 1940 and to the Department of Health, Education and Welfare in 1953 (when it was formed), which later became the Department of Health and Human Services in 1979.
FDA regulates one-quarter (1/4) of the United States economy. Not long after the 1906 Act became law, the Supreme Court unanimously upheld it as a valid exercise of the power of Congress to regulate interstate commerce.
In 1997, Congress enacted the Food and Drug Administration Modernization Act (FDAMA), Pub. L. No. 105-115, 111 Stat. 2296, one of the most significant set of amendments to the 1938 law in decades.
The FDA regulates a wide range of consumer products, including food, food additives, dietary supplements, human and animal drugs, medical devices, and cosmetics.
Our modern era of food and drug regulation began with the work of scientists and legislatures in the 19th century in England and America. Between 1850 and 1900 virtually every state enacted some form of food and drug statute.
When the United States Department of Agriculture (USDA) was created by Congress in 1862, the Chemical Laboratory was designated as the USDA Chemical Division. During the first 45 years of its existenc--from 1862 to 1906--FDA (defined broadly to include its predecessor agencies) had no statutes to enforce. The FDA initially conducted its business in accordance with its formal title, the Division of Chemistry. It analyzed the food supply and provided advice to other parts of te Department on all aspects of agriculural chemistry but did not engage with the states in establishing national regulatory policy.
In 1897, the National Board of Trade (the predecessor to our current United States Chamber of Commerce) adopted a resolution establshing $1,000 in prize money for the best three drafts of a national food adulteration statute. The winning draft (by George W. Winger) ultimately became part of the Federal Food and Drugs Act of 1906 and the Federal Food, Drug and Cosmetic Act of 1938 and still can be found in the law today. At the time, however, there was a powerful obstacle in theh way. A majority of Congress firmly believed that regulation of the manufacture and sale of food and drugs within the United States involved local matters that the Constitution left entirely to the states.
Regulation of biological products represents the oldest form of government regulation of business in our country. In fact, the FDA is our oldest federal regulatory agency, and for decades it was the only federal agency charged with jurisdiction over a broad range of consumer products. (The EPA, OSHA, CPSC are all of relatively recent origin, created during 1970-72).
In 1901 contaminated smallpox vaccine caused an outbreak of tetanus in Cambeden and a lot of tetanus-infected diphtheria antitoxin resulted in the death of several children in Saint Louis. Congress promptly enacted the Biologics Act of 1902. The 1902 Act represented a turning point in the history of food and drug regulation. For the first time in history, a statute required premarket approval by the government of a category of consumer products before any product within that category could be lawfully marketed. The 1902 Act required government approval of a product license application and an establishment license application for every biological drug intended for human use. A similar act wasn't passed for another fifty years.
For roughly the first half of its existence, until 1940, FDA remained a component of USDA. The agency was transferred to the Federal Security Agency in 1940 and to the Department of Health, Education and Welfare in 1953 (when it was formed), which later became the Department of Health and Human Services in 1979.
FDA regulates one-quarter (1/4) of the United States economy. Not long after the 1906 Act became law, the Supreme Court unanimously upheld it as a valid exercise of the power of Congress to regulate interstate commerce.
In 1997, Congress enacted the Food and Drug Administration Modernization Act (FDAMA), Pub. L. No. 105-115, 111 Stat. 2296, one of the most significant set of amendments to the 1938 law in decades.
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