[guylhem]

In healthcare, there are many skeletons in the closet - and many closets.

This FDA story is sad, but not surprising. The article seems to suggest the European equivalent (the EMA) is way better. Maybe it did behave better on this case, but as a rule of thumb, I strongly doubt it is much better.

The only advantage Europe has is how it works: if you want to bring a drug to the market, you either have it to get it accepted in one member state (then you can sell it everywhere) or go to the EMA. That's moderate competition. It may works slightly better, but it's still limited by the number of countries and regulatory agencies.

The only conclusion we should make from such stories is that there should be no public bodies susceptible to regulatory capture, but various independent organizations doing that.

See that as adding redundancy - if one was found to cheat and lie, it wouldn't be too big to fail, and a competitor would be glad to update its rating on say the 40 generics whose bioequivalence ratings are based on cooked data. That's a bit like how I trust Michelin guides more than any government evaluation of restaurants.

EDIT: I noticed a comment about financial ratings agencies. You realize there are only 3 big ones (Moody's, S&P, Finch) and that they have very strong ties to some governments, right? I predict they give you more quality that the FDA (because it's a legal monopoly), but less than what more competition could bring.

[GauntletWizard]

Regulatory capture is pretty much inevitable. In almost any field, the skills needed for government regulators to evaluate claims are interchangeable with the skills needed to work in the field.

The only thing that will help is strong whistleblower protections, to allow the ethical members of a profession to call bullshit without fear of repercussion. (This won't work in banking, for obvious reasons :P )

[narrator]

How about the Singapore model? Pay government bureaucrats huge salaries and pensions so they don't have to structure their career around getting a private sector cash out after they retire from regulating.

[jonlucc]

I'd wonder where the regulators are going to learn the skills needed to regulate. Drug development is not quite like academic research.

[refurb]

The EMA isn't that much better. Just do a google search for Mediator a diet drug only sold in the EU.

There were multiple signs that the drug causes heart damage. It took years and years for it to eventually be pulled.[1]

[1]http://news.yahoo.com/france-drugmaker-trial-suspected-death...

[voronoff]

Because the financial ratings agencies have proved to be such a huge success?

[nickff]

Perhaps this proposed drug testing regime would be more comparable to auditing firms.[1] Arthur Andersen went under after it lost credibility in the eyes of shareholders, as a result of the Enron scandal. On the other hand, from everything I have read the ratings agencies were simply 'going through the motions', and cashing in on their government mandated service. No large investors trusted the ratings agency to begin with, the investors were all gaming the system, and the agencies were playing along to get a piece of the action.[2]

[1] http://en.wikipedia.org/wiki/Big_Four_(audit_firms)

[2] http://en.wikipedia.org/wiki/Big_Three_%28credit_rating_agen...

[Retric]

US raiting agency's are setup to be corrupt as the seller pays the raiting agency so there going to look for the loosest respectable option. And the agency has little incentive to dig deep.

[woodman]

Setup by the SEC. The incentives are structured, by the government, in the most ridiculous way possible. Pointing at the failure of government mandated and monitored rating agencies as a failure in private enterprise is just stupid.

[Retric]

I think it's more nuanced than that. Private companies optimize for money, with the right incentives they work well, with poor incentives they become a pointless money sink.

All too often you see the equivalent of “though the magic of the invisibly hand we will solve X.” But, without the proper incentives simply privatizing or reducing regulations are going to do little but line someone’s pockets.

[woodman]

> But, without the proper incentives simply privatizing or reducing regulations are going to do little but line someone’s pockets.

Well, that is true every system - including functions of government. It has nothing to do with privatization vs nationalization. The government mandates that certain financial instruments must be rated by a short list of companies that have been blessed to do so. So the government has limited competition among rating agencies, a laughable mistake in judgement. Then these companies only get paid by the folks trying to sell the instrument under review... another stupid move.

Many government programs, presumably setup with the best intentions, have serious negative consequences because the moron behind it didn't think more than one step ahead. This happens in private industry as well, the difference being that there the market corrects for mistakes by mercilessly crushing fools. In government the fools live on, and their plans are slow to change because it is now law.

[Retric]

'the moron behind it didn't think more than one step ahead'

I think many and possibly most of these are based on regulatory capture where elected officials / regulators are ‘given incentives’ to look the other way.

Lots of seemingly stupid decisions are completely reasonable from the person who made them. All it takes is for someone to be judged just on their little piece of what happens (how much do we spend on paper) and not judged based on how much their changes hurt the corporation/overall economy etc. And before you know it, we saved 1million in ink last year at the cost of 50 million in manpower.

[sjg007]

Except the major drugs are brought to both markets usually and largely made by multinationals. Many drugs get approval in Europe first before they are tested in the US.

[ekianjo]

Most drugs go first on the American Market, because that's the most profitable one by far. Any source for your claim ?

[chrisbennet]

I worked for a client that was trying to develop a medical device (stents). I was told it was cheaper and faster to get approval in Europe.

[ekianjo]

Medical devices are not drugs. They do not follow the same regulations. And in Europe the medical device registration can be very fast depending on the type of medical device (they have standard classifications for fast review, and some are self-certification type of registration).

You should never make a parallel between medical devices and drugs because those are just two very different markets. And unless you have a better source for your first point, I stand by my position that the US gets most of the approval first, worldwide. And most of the large pharma industries are American.