THE LIBERTARIAN ENTERPRISE
Number 91, September 25, 2000
Just Another Protection Racket
by Carl Bussjaeger
Special to TLE
Have you seen the Johnny Cochran television commercials for the Rezulin class action suit?
Unfortunately, I have. I was visiting with someone who watches television. A lot of television. So I couldn't help but be exposed to the tube. Bleah.
Anyway, attorney Johnny Cochran, of OJ infamy, is running an ad about the diabetes drug Rezulin. It seems that the drug may have caused liver damage in some users. Always eager for a buck, Cochran is organizing a class action lawsuit against the manufacturer. Ordinarily, I might think that holding the manufacturer responsible for marketing a dangerous product is a good thing.
But after viewing the umpteen zillionth reiteration of the frigging commercial, I couldn't help but consider the distorting effect government regulation has had on the not-so-free market.
You see, in the United States, out of wimpish helplessness, we decided that we need a federal agency to protect us from rapacious business men. In this case, we're stuck with the Food and Drug Administration, the good ol' FDA. In theory, these guys arrange the testing of new pharmaceuticals for effectiveness and safety. Since us little people are too stupid to work with our doctors to determine what would best suit our medical needs, the FDA graciously approves for use and sale only those drugs it deems to be safe.
Think about it. The company submitted Rezulin to the FDA for approval, and the feddies decided it was safe and effective. Once granted the federal imprimatur, they could peddle the stuff around the country. With the FDA seal of approval, doctors would assume that it's generally safe when used appropriately.
So why is anyone suing the manufacturer? Isn't it the government agency that screwed up?
Again in theory, the company did everything it was supposed to do to assure a safe product. The feds said so. They supposedly acted in good faith, and submitted to external testing of their product. They tried to do right. That's the whole idea behind FDA approval. So why isn't the FDA being sued for failing in its duty? What's the point, from the manufacturer's angle, of FDA approval if it doesn't protect them? If the company met all federal requirements and the FDA blessed Rezulin, the company should be protected from civil lawsuits. The FDA should bear the brunt of the legal attack.
On the other hand, if the company intentionally short-cutted the process, if it knew Rezulin had undisclosed risks and kept that from the FDA, why isn't the FDA working with the Justice Department to pursue criminal charges against company personnel? Is the federal government there to protect us or not? Why piddle around with a civil suit that leaves supposed criminals in place to potentially repeat the crime?
It just doesn't ring true. Federal approval and licensing is obviously nothing more than a protection racket, intended to extort money and concessions from the pharmaceutical companies, in return for a guarantee of limited market competition: Pay off the feddie thug or he'll shut you down.
The FDA is just another example of how government regulation is dangerous. Since it takes no actual responsibility for the drugs it allows to go to market, yet grants those drugs "approval" only after "testing", doctors and patients gain a false sense of security in using those feddie-blessed drugs. But when the products fail, dangerously so in some cases, the FDA bows out and leaves you to settle it with the manufacturer: "Don't talk to us, we just approve the stuff; we don't make it."
By eliminating the government approval requirement, we would also eliminate the source of this illusory security. The pharmaceutical companies would have to survive in the free market. While the same abuses could still occur in the free market, the offenders couldn't offer the court defense of, "Don't blame us; the feds said it was okay." And we would be rid of the inflationary cost of government regulation.
As well, without feddie interference in the process, products could hit the market faster: How many of you noticed that only last week did the FDA finally allow cholesterol-reducing Benacol to marketed as such?
I wonder how many people have been killed as an indirect effect of feddie-induced price increases and marketing delays.
I wonder how much longer we'll put up with it.