Why Does the FDA Overrule Its Expert Committees’ Recommendations?

32 Pages Posted: 22 Jul 2019 Last revised: 4 Nov 2019

See all articles by Joseph H. Golec

Joseph H. Golec

University of Connecticut - Department of Finance

James C. Cooper

George Mason University - Antonin Scalia Law School, Faculty

Date Written: July 19, 2019

Abstract

To evaluate some complex drugs, the Food and Drug Administration (FDA) creates committees of experts who recommend whether the drugs should be approved or rejected. The popular press and earlier studies commonly report that the FDA almost never overrules these recommendations. Some say this is because both the FDA and the experts have financial ties to drug companies, leading them to approve too many drugs. Others claim the FDA and experts are both risk averse, leading them to reject too many drugs when they fear approval could draw criticism from the press and Congress. We show that FDA overrules are fairly common (16 percent of cases), and that financial ties to drug companies do not explain them. We find that in a majority of overrules, experts recommend rejection, but the FDA approves the drug anyway, suggesting that the experts could be more risk averse than the FDA. This is consistent with our finding that committees with top experts reject more drugs, perhaps to protect their reputations from being associated with drugs that later might be judged unsafe.

Keywords: FDA, Drug Advisory Committees, Drug Approval Process, Drug Regulation

JEL Classification: I18, I10, I11, H51

Suggested Citation

Golec, Joseph and Cooper, James C., Why Does the FDA Overrule Its Expert Committees’ Recommendations? (July 19, 2019). University of Connecticut School of Business Research Paper No. 19-15, Available at SSRN: https://ssrn.com/abstract=3423007 or http://dx.doi.org/10.2139/ssrn.3423007

Joseph Golec (Contact Author)

University of Connecticut - Department of Finance ( email )

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

James C. Cooper

George Mason University - Antonin Scalia Law School, Faculty ( email )

3301 Fairfax Drive
Arlington, VA 22201
United States
703-993-9582 (Phone)

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