What's the "Interest" in Fda Drug Advisory Committee Conflicts of Interest?

22 Pages Posted: 3 May 2009 Last revised: 2 Jun 2013

See all articles by Joseph H. Golec

Joseph H. Golec

University of Connecticut - Department of Finance

John A. Vernon

University of North Carolina (UNC) at Chapel Hill; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: April 2009

Abstract

Food and Drug Administration (FDA) drug advisory committee members sometimes have financial interests tied to drug companies. Congress and the public have become concerned that these financial interests lead to conflicts of interest. They conclude that the conflicts bias committee recommendations, and lead to unsafe or ineffective drugs being approved for public consumption, or, conversely, delays in approval of safe and effective drugs. Our paper provides empirical evidence, based on an event study methodology, that advisory committee meetings lead to weak or statistically insignificant effects on stock prices and hence equity values of regulated companies assumed to be affected by the particular matters coming before committee meetings.

Suggested Citation

Golec, Joseph and Vernon, John A., What's the "Interest" in Fda Drug Advisory Committee Conflicts of Interest? (April 2009). NBER Working Paper No. w14932, Available at SSRN: https://ssrn.com/abstract=1397930

Joseph Golec (Contact Author)

University of Connecticut - Department of Finance ( email )

School of Business
2100 Hillside Road
Storrs, CT 06269
United States

John A. Vernon

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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