FDA's Revolving Door: Reckoning and Reform

Abstract

Recent controversy over FDA’s approval of the Alzheimer’s therapy Aduhelm (aducanumab) and the Duchenne muscular dystrophy therapy Exondys 51 (eteplirsen) called into question the impartiality and independence of high-level FDA regulators. Atypical associations between FDA regulators and pharmaceutical company sponsors, in addition to fierce internal disputes over the adequacy of the evidence, elicited criticism and triggered concern about potential undue influence at the FDA. The revolving door is one persistent source of undue influence that overshadows the discharge of FDA regulators’ duties to the public. Exit from government to private-sector employment via the “revolving door” is a frequent occurrence at administrative agencies like FDA. This Article offers a scoping analysis of the revolving door at the FDA specifically. Drawing on insights from many disciplines, including legislative history of existing revolving door prohibitions, the scholarship on regulatory capture, the psychology of gift-giving, and fiduciary theory, this Article approaches an old problem with new insights and situates the discussion of the revolving door at the FDA in a contemporary context.

In the background of FDA decision-making lingers the time-limited nature of an official’s tenure at the agency, which is especially true for political appointees on whom rest some of the agency’s most critical decisions. To believe that a regulator will make decisions unaffected by the prospect of lucrative private-sector employment in a regulated industry places unrealistic faith in the idea that human behavior is the product of conscious choices over which we have full control. The dangers of the revolving door can be understood as a product of conscious and unconscious influence that generates a risk of bias in favor of regulated entities with whom private employment may later be sought. As with bias in adjudication, it is that risk, even in the absence of actual proven bias, that requires mitigating measures.

Even when regulators’ decision-making remains fully aligned with the public interest, institutional legitimacy suffers whenever the potential for bias exists. This is especially true because those outside of the agency lack the information and expertise needed to make proper ex post assessments of the validity of highly specialized, highly technical decisions such as whether to approve a new drug or biologic therapy. The corrosive effects of the revolving door on public perceptions of agency decision-making thus prove resistant to easy solutions. Ultimately, this Article argues in favor of conceptualizing FDA’s revolving door as an institutional problem, even when it acts through the decisions of individual regulators. Because revolving door-induced conflicts of interest find expression through exercises of discretion, layered and multifarious checks on the discretion of senior FDA officials offer the public the greatest assurance of impartiality in the outcomes that matter most to the nation’s health and welfare.

Keywords: revolving door, FDA, regulatory capture, principal-agent, pharmaceuticals, Alzheimer's, FDA approval, regulation, administrative agencies

JEL Classification: K23; I28