This Article reexamines the role of FDA regulation in motivating investment in biopharmaceutical innovation. I begin by challenging the standard story that it is the patent system that makes drug development profitable, and drug regulation that makes it costly, by showing how patents add to costs and how drug regulation works in tandem with patents to protect profits. I then compare FDA-administered exclusive rights to patents as a means of fortifying drug development incentives, suggesting ways that FDA-administered rights might be preferable both from the perspective of policy makers and from the perspective of firms. In the remainder of the Article, I turn to the role of the FDA in regulating clinical trials of new drugs, reconsidering its regulatory functions from the perspective of innovation policy (i.e., motivating the provision of information about drugs) rather than from the more conventional perspective of protecting health and safety (i.e., keeping unsafe products off the market). Some aspects of the current regulatory scheme, such as keeping products off the market and limiting permissible marketing claims pending the completion of clinical trials, make more sense from this revisionist perspective than they do from the conventional perspective. Yet other aspects, such as the relative emphasis on pre-approval studies over post-approval studies and the FDA-enforced secrecy of clinical trial data, come in for new criticisms and suggest new questions for scholars and policy makers.
Rebecca S. Eisenberg,
The Role of the FDA in Innovation Policy,
Mich. Telecomm. & Tech. L. Rev.
Available at: http://repository.law.umich.edu/mttlr/vol13/iss2/1