NATIONAL CENTER FOR POLICY ANALYSIS
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Making Drugs Safe and Available without the FDA

Why the UL Model Can Work for Drugs

Because of the work of UL and its competitors, we believe that bulletproof glass is indeed bulletproof and that our smoke detectors will indeed wake us in the event of a fire. But Zantac, amoxicyllin and cardiac arrest paddles are very different from light bulbs, toasters and cordless telephones. Can we expect a certifying organization modeled after UL to protect us when drugs and medical devices are involved? There are four concerns about private certification that we must address.

Protecting Consumers from Dangerous Drugs. To get straight to the heart of the major consumer concern, can a company modeled after UL protect us from thalidomide? Contrary to popular belief, the FDA was not responsible for preventing thalidomide tragedies in the United States, nor was the drug approval process in Europe riskier than in the U.S.55 We can be protected to the extent that we want to be protected. A third-party certifier has no reason to list a drug unless it is sure of the safety of the drug. Under such a system, a dubious drug might be on the market, but it would lack third-party certification. Doctors, mindful of both the Hippocratic Oath and the state of medical liability, would be reluctant to prescribe medicines that lacked such a listing. Only consumers willing to carry a great deal of risk would use such a drug - and they likely would do so over their doctor's objections.

Private certification would allow different people in different circumstances to balance the risks they accepted. In concrete terms, no bureaucrat could prevent someone dying of AIDS from buying and using AZT or new experimental drugs.

"No bureaucrat could prevent someone dying of AIDS from buying and using AZT or new experimental drugs."
Providing Consumers with Effective Drugs. UL and other companies conduct performance tests only for life-safety products such as smoke alarms and fire extinguishers, but the FDA must meet the performance mandate on every application. Can a private company accommodate performance testing on a much larger basis? Yes. The certification industry would change but the certifying organizations could adapt. Adding a performance mandate would not alter the market incentives for third-party organizations. They probably would still be involved in research and development from the earliest stages and probably would still produce flexible, adaptable standards. Importantly, the third-party companies would still deal directly with their final clients: consumers and manufacturers.

Preventing a Race to the Bottom. Competition in the private market creates powerful incentives to reduce costs. Would private competition in the market for drug certification result in a reduction in the quality of work as a way to keep costs down? The history of UL and its competitors in the certification business assures us that it would not. As competing organizations have come into the market, the testing burden has not become easier for manufacturers, and consumers remain confident in the safety of their products. What has happened instead is that new market entrants have adopted the efficient, accepted UL standards and competed on cost or personal service.

Manufacturers must now have the FDA's permission to test new drugs on humans after completing the required animal studies. However, such tests may not uncover the risks of long-term, widespread use.56 Under competitive drug certification, the efficacy and extent of human testing and the best way to reduce the health risks to test subjects would be scientific questions on which certifiers, manufacturers and their medical advisers could reach a consensus. Today, whether patients are allowed to receive unapproved drugs during the testing phase is a political decision; under a market-based system, patients and other test subjects could receive uncertified drugs if they were willing to assume the risk.

Providing a Stable Certification Program. Expanding third-party certification into drugs and medical devices - matters of life and death - would increase the liability of the certifying organizations. But they could adapt to a greater level of risk. Third-party certification simply states the professional opinion of the certifiers as to the safety and, perhaps, effectiveness of the product. Certifiers can be sued, but judicial interpretations of liability do not assign liability to certification organizations like the ones under discussion. Third-party medical certifiers would not suffer devastating judgments against their assets or be paralyzed by concern over their exposure. The law would still protect consumers. While certifiers would be protected from liability, injured consumers could seek legal redress from manufacturers and distributors.

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