The costs of healthcare can be “nation-ruining,” warned outgoing Secretary of Health and Human Services Michael Leavitt, because without fundamental reforms, over the next two decades the average American household’s healthcare spending will soar from 23 percent to an impossible-to-sustain 41 percent of average household income.

The economic downturn makes controlling costs related to healthcare both more difficult and more imperative. President Obama is aware of this crunch: As he introduced his new budget director in November, he observed that in tough economic times, the government must “shed the spending we don’t need” by getting rid of federal programs that no longer make sense and running others in a more frugal way. He vowed that his budget officials “will go through our federal budget—page by page, line by line—eliminating those programs we don’t need, and insisting that those we do operate in a sensible cost-effective way.”

Most day-to-day evaluations and approvals of drugs, medical devices, and food products are performed quite autonomously within the FDA’s various decentralized units, and yet there are massive, largely superfluous bureaucracies.

The Food and Drug Administration, which regulates products that account for more than 25 cents of every consumer dollar, would be a good place to begin. Trimming, revising, or eliminating programs that are ill-conceived and counterproductive would free up resources for essential functions, improve the efficiency and effectiveness of FDA regulation, and reduce the costs of R&D performed by the private sector. 

Here are a few specific suggestions:

• In 2007, the FDA announced a plan to perform a comprehensive assessment of the safety of some new drugs within 18 months of their introduction and to issue a report card on their performance. Although this may sound sensible, it is inconsistent with data showing that, in fact, newer drugs confer an advantage over older ones in reducing mortality. This plan is another candidate for elimination or for trimming to encompass only very widely prescribed drugs whose clinical trials raised a possible safety concern.

• The FDA’s Drug Watch program has more to do with public relations than public health. According to the FDA, it makes “emerging safety information” publicly available before the agency has “fully determined its significance.” Drug Watch is “not intended to be a list of drugs that are particularly risky or dangerous for use; listing of a drug on Drug Watch should not be construed as a statement by FDA that the drug is dangerous or that it is inappropriate for use.” One former deputy commissioner conceded that the data that would appear on Drug Watch was “still unscrubbed by scientific rigor.” That is to say, it’s of no value—except perhaps for plaintiffs’ attorneys trolling for business. This program should be scrapped.

• Most day-to-day evaluations and approvals of drugs, medical devices, and food products are performed quite autonomously within the FDA’s various decentralized units, and yet there are massive, largely superfluous bureaucracies that serve the commissioner and a horde of deputy commissioners, associate commissioners, and assistant commissioners. These should be trimmed drastically, freeing resources for the agency’s essential programs.

• The FDA appears to have introduced a new, extremely demanding criterion—in addition to safety and efficacy—for the marketing of a new drug.

•  A recent memorandum of agreement between two groups within the FDA’s Center for Drug Evaluation and Research will systematically slow drug development and increase its costs. Under the accord, the drug review and drug safety offices will have equal responsibility for “significant safety issues” pertaining to medicines that are under review or have already been approved for marketing. Officials in the latter group are focused so narrowly on “safety” that they ignore the fact that because all drugs have side-effects, safety cannot be evaluated in a vacuum. Instead, it must be part of a risk-benefit judgment. These officials should be returned to a purely advisory role.

The Food and Drug Administration regulates products that account for more than 25 cents of every consumer dollar.

• The FDA announced earlier this month that every new genetic construction in an animal that employs gene-splicing technology must undergo evaluation under the same procedures and regulations as those for drugs used to treat animal diseases. In other words, the genetically altered animal will be treated as though it were a new drug. A far more apposite model for gene-spliced animals would be the agency’s oversight of traditional foods and food additives of “natural mutants” and of livestock clones or identical twins, which the FDA has decided are safe to eat. This approach would ensure food safety but would be far less labor and time intensive for FDA personnel, and it would be far less anti-innovative and punitive to an emerging industry.

President Obama’s stated approach to governance sounds promising. “This isn’t about big government or small government,” he said. “It’s about building a smarter government that focuses on what works.” But translating the rhetoric into reality will test his administration’s mettle, because it will require taking on legislators bent on expanding the nanny-state and committed to the impossible goal of zero risk in consumer products and services. 

Henry Miller is a physician and fellow at Stanford University’s Hoover Institution. He was an official at the FDA from 1979 to 1994.

Image by Darren Wamboldt/the Bergman Group.