Improving the FDA Approval Process

39 Pages Posted: 18 Oct 2011 Last revised: 28 Jul 2013

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

Date Written: October 17, 2011

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.

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: https://ssrn.com/abstract=1945424 or http://dx.doi.org/10.2139/ssrn.1945424

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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