|Cato Policy Analysis No. 235||August 7, 1995|
by Robert Higgs
Robert Higgs is research director at the Independent Institute in Oakland, California. This study is adapted, with permission of the Independent Institute, from a chapter that will appear in the Institute's forthcoming book, American Health Care: Government, Economic Processes, and the Public Interest, edited by Simon Rottenberg.
Since its inception in 1938, regulation of the medical device industry by the Food and Drug Administration has increased in scope, detail, and cost to the American people. Historically, legislative authority and regulatory stringency have made several discreet leaps, each prompted by shocking revelations widely disseminated by the news media. To demonstrate their devotion to protecting the public health, legislators and regulators have augmented the regulations, emphasizing the alleged benefits and disregarding the negative consequences for the industry and the patients it ultimately serves.
In the past four years the FDA has drastically slowed the rate at which it approves new or improved medical devices. It has pursued an aggressive enforcement strategy that treats all regulated firms as suspected felons, restricting its communication and cooperation with them and substantially increasing the number of punitive actions. In response, increasing numbers of firms have moved their operations abroad or begun planning to do so.
The FDA's regulation of medical devices has produced little if any benefit but imposed large and increasing costs. Those costs are not just economic; they also include deaths and human suffering. Ideally, the laws authorizing the FDA's regulation of medical devices would be repealed. At a minimum, Congress should alter the FDA's authority, making the administration an agency for certifying products instead of an agency for outlawing products, micromanaging the operations of the device firms, and impeding innovation.
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