Quick. Name something that would: 1) instantly reduce the costs of medical care in the United States, 2) unleash a torrent of innovation in medical technology, one of America's 21st century industries, 3) greatly reduce the regulatory burden not just on the pharmaceutical industry, but countless other industries that contribute to medical care such as robotics, assisted living, acute care hospitals, etc., 4) reduce the costs of medicines and numerous medical procedures, and 5) burnish President Obama's hopelessly tarnished image as a futurist and pragmatist.
Wow! What a magic bullet! What have I been smoking? (Something regulated by the FDA, no doubt!).
Just a nice draught of free-market economics. Ask yourself: what would happen if the Food and Drug Administration (FDA)'s powers were completely eviscerated, reduced to an advisory/warning capacity only.
Thus: "After exhaustive testing and analysis we are forced to conclude that this drug therapy is ineffective and has substantial side effects. We recommend against its use. The final decision remains between you and your doctor."
Just imagine! Decisions on medication, types of surgery and procedures, made at the lowest and most meaningful level: between a doctor and a patient, fully informed of the risks and benefits.
When I taught economics in college, discussing the pros and cons of regulation I would often ask my students, "How many of you read Consumer Reports?" Quite a few hands went up. And yet here is an organization, without taxing and regulatory powers, that tests and evaluates hundreds of products every year. It does so in a meaningful, professional way, using language and procedures that citizens can understand and comment on.
Compare this with the labyrinthine that the FDA, cloaking itself in science and statistics, uses to intimidate both citizens and financial markets. How many billions of dollars are lost trying to divine outcomes of FDA trials, which come in stages, of course?
Each stage costs more and presents a hurdle few firms can afford: a guarantee that large firms have an advantage and small firms are forced into partnerships or into equity dilution to raise more capital.
It now takes close to a decade to bring new drugs to market. Many drug areas — vaccines, for example — have been abandoned entirely. In a classic damned if you do or don't scenario, complying with FDA regulations is not enough to shield drug and device manufacturers from lawsuits. This is the case even if the drug or procedure was used improperly for "off-label use."
What a great shot across the bow of the regulatory octopus such an action would be. When President Reagan fired the air traffic controllers, the chill effect on other public employee unions was astounding. And his action set the tone for the two-decade economic boom that followed. And of course, air safety continued to improve.
So it would be if we reined in the FDA. The incentive to develop safe and effective medicines would be just as great. Instead of leaning on the nanny state to make our decisions for us, consumers and medical professionals would have an incentive to obtain as much information about medicines and procedures as possible. The popularity of sites such as WebMD is proof of this. Patients would once again be an active part of their own care.
Perhaps that is the reason why we will never see Obama take this action.
© 2014 Moneynews. All rights reserved.