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http://ssrn.com/abstract=1945424
 
 

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Improving the FDA Approval Process


Anup Malani


University of Chicago - Law School; University of Chicago Pritzker School of Medicine; Resources for the Future; National Bureau of Economic Research (NBER)

Oliver Bembom


University of California, Berkeley

Mark Van der Laan


University of California, Berkeley

October 17, 2011

U of Chicago Law & Economics, Olin Working Paper No. 580
U of Chicago, Public Law Working Paper No. 367

Abstract:     
The FDA employs an average-patient standard when reviewing drugs: it approves a drug only if is safe and effective for the average patient in a clinical trial. It is common, however, for patients to respond differently to a drug. Therefore, the average-patient standard can reject a drug that benefits certain patient subgroups (false negative) and even approval a drug that harms other patient subgroups (false positives). These errors increase the cost of drug development – and thus health care – by wasting research on unproductive or unapproved drugs. The reason why the FDA sticks with an average patient standard is concern about opportunism by drug companies. With enough data dredging, a drug company can always find some subgroup of patients that appears to benefit from its drug, even if it truly does not. In this paper we offer alternatives to the average patient standard that reduce the risk of false negative without increasing false positives from drug company opportunism. These proposals combine changes to institutional design – evaluation of trial data by an independent auditor – with statistical tools to reinforce the new institutional design – specifically, to ensure the auditor is truly independent of drug companies. We illustrate our proposals by applying them to the results of a recent clinical trial of a cancer drug (motexafin gadolinium). Our analysis suggests that the FDA may have made a mistake in rejecting that drug.

Number of Pages in PDF File: 39

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Date posted: October 18, 2011 ; Last revised: July 28, 2013

Suggested Citation

Malani, Anup and Bembom, Oliver and van der Laan, Mark, Improving the FDA Approval Process (October 17, 2011). U of Chicago Law & Economics, Olin Working Paper No. 580; U of Chicago, Public Law Working Paper No. 367. Available at SSRN: http://ssrn.com/abstract=1945424 or http://dx.doi.org/10.2139/ssrn.1945424

Contact Information

Anup Malani (Contact Author)
University of Chicago - Law School ( email )
1111 E. 60th St.
Chicago, IL 60637
United States
773-702-9602 (Phone)
773-702-0730 (Fax)
HOME PAGE: http://www.law.uchicago.edu/faculty/malani/
University of Chicago Pritzker School of Medicine
Chicago, IL 60637
United States
Resources for the Future
1616 P Street, NW
Washington, DC 20036
United States
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Oliver Bembom
University of California, Berkeley
310 Barrows Hall
Berkeley, CA 94720
United States
Mark Van der Laan
University of California, Berkeley
310 Barrows Hall
Berkeley, CA 94720
United States
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