Question

In: Economics

The Food and Drug Administration uses a premanufacturing screening program for determining the marketability of new...

  1. The Food and Drug Administration uses a premanufacturing screening program for determining the marketability of new pharmaceutical products, whereas the U.S. Consumer Product Safety Commission relies on recall actions for products found to be defective, such as electric coffee-makers that short out. Can you think of any rationale other than historical accident for the difference in regulatory approaches between the two agencies?

(Chp. 22)

Solutions

Expert Solution

There are a few rationales for this difference in approach of the two agencies-

  • Many factors of failure vs one factor- A particular type of drug is extremely standardized and has same components (mostly one) and works the same way. Any product such as a coffee maker is assembled from hundreds of different parts. A single part out of a thousand product being defective doesnt mean the product overall is defective. Simmilarly, as the products under CPSC's ambit are so varied, they may be failing because of other things or user failure (like a coffee maker failing due to faulty surge or someone plugging it in the wrong line). This risk is very less in case of medicines or food items. The product under CPSC's ambit can be deemed defective only when there are consistent reports of it failing in the same manner. A drug or food item on the other hand, is a chemical and will affect everyone in the same way and hence if one is defective, all can be considered defctive and can ba banned even before reaching the public.
  • Harm- Most general products, even if systemically defective, will cause some harm but not on the same level as a defective drug. Its a calculation between possible harm and monetary cost/effort from the agency. FDA cant be lax and has higher resources and researches each product because they will cause griveous bodily harm to millions already sick people. The CPSC on the other hand relies on post facto recalls as they judge the risk of harm not that high.
  • Variety- FDA studies same types of products and there is a set way to test them. It is mostly standard, even if the drugs are different. The CPSC's ambit has products of extreme variety. Testing each of them before their release is extremely costly, time consuming and requires huge amount of resources and expertise. That is not practical.

For the above reasons, these two agencies work very differently.

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