In 1960, Frances Oldham Kelsey became an overnight hero when she refused to approve a new medication. Rejecting Thalidomide, which later earned her a medal from President JFK, might have saved thousands of American lives, as the European wonder drug against morning sickness later revealed horrifying side effects and severely deformed newborns.1
But even though Thalidomide never reached the US market, its effect on American public health has been disastrous. In response to the Thalidomide scandal overseas, Congress unanimously passed the Kefauver-Harris Amendment to strengthen the FDA. In doing so, they changed the agency’s mandate to regulate not just the safety but also the “efficacy” of drugs, making sure that their benefits outweighed potential risks and side effects. Testing for efficacy is a significantly harder task than testing for safety, and has resulted in exponentially rising approval times for new medications.
Before Kefauver-Harris, drugs were automatically approved within 7 months unless the FDA intervened. By the late 1990s, drug approvals could take up to 7 years. Today, it often takes 10 to 15 years before medication is made available to the market.
These slower regulatory approvals are the hidden cost of increased caution and government intervention.2 While this keeps the FDA clear from public condemnation, media scandals, and political pressure, it also creates an invisible graveyard of victims who were kept from receiving life-saving medication.3
Approving harmful or ineffective drugs is what the FDA considers type I errors (false positives). Equally important to public health are type II errors (false negatives), which represent all the beneficial or effective drugs not approved by the FDA due to delays or bans.
The stories and victims of these type II errors go largely unaccounted for, and are usually tallied up within the numbers of hospital fatalities and excessive healthcare costs. But the FDA is just as responsible for type II errors, and their associated death toll, as they are for type I errors.
Headlines of new life-saving medication being approved today often miss the underlying implication that people died yesterday waiting for its regulatory approval. To the extent that slower drug development is caused by increasing regulation, the FDA should treat the rise in approval times as a public health emergency, as new drugs become increasingly inaccessible to the patients waiting for them.
It's estimated that for every life saved from type I errors, as many as 4 lives are lost to type II errors, a 4:1 ratio that only grows with ever more cautious regulation.
A first step to addressing and limiting this death toll could be reprioritizing speed over caution, a strategy already embraced by foreign regulators. The 3-year delay alone, between the UK and the US’s regulatory approvals for beta blockers, may have resulted in ~30,000 preventable American deaths. But the bias towards type I errors over time is a structural issue in the way that federal agencies are designed, rather than an imbalance between risk and speed.
As the former FDA commissioner Alexander Schmidt admitted, "In all of FDA’s history, I am unable to find a single instance where a Congressional committee investigated the failure of FDA to approve a new drug [type II error]. But, the times when hearings have been held to criticize our approval of new drugs [type I error] have been so frequent that we aren’t able to count them…"
It would be easy to frame the debate between type I and type II errors as a pure tradeoff, where decreasing one increases the other. However, evidence suggests that this doesn’t hold for regulatory approvals, as faster approvals abroad lead to almost identical safety outcomes. The American obsession with ever-increasing caution has not improved safety outcomes as a result. The modest gains in safety since the 1960s are largely attributable to post-market measures (once a medication is approved) like the “Adverse Event Reporting Systems”, rather than to the pre-market regulatory processes that create type II errors.
This false dilemma could eventually be transcended by technology. Innovations like digital twins are accelerating clinical developments, while others, such as biomarkers, are improving the accuracy of clinical trials. The hope is that technology can facilitate faster and more accurate regulatory approvals, reducing both type I and type II errors. The European Medicines Agency has already allowed the use of digital twins to “conduct smaller and quicker clinical trials”, while the United States still lags behind. Without structural reform, however, embracing new technology is likely to encounter the same risk-aversion that produces type II errors.
Emerging technologies could approximate the near-omniscience required of the FDA’s high efficacy standards, yet the structural issue remains. The FDA is only held accountable for Type I errors, and despite innovations, its poor political incentives could continue to plague American public health.
50 years later, the FDA gives out an annual “Dr. Frances O. Kelsey Medal” honoring its most cautious and thus exemplary members.
This increased regulatory approval time also creates space for pharmaceutical cartels to prop up prices in the absence of competition, as regulation creates barriers to entry for newcomers to arbitrage inflated prices. They allow pharmaceutical companies to make hundreds of millions of dollars from cartel practices, at the expense of consumers, and are only enabled by the slowness of regulators.
The invisible graveyard goes beyond patients tragically waiting for regulatory approval. It also includes patients for whom pharmaceutical companies did not develop medication, due to the significant increase in R&D costs imposed by regulation. As Nobel prize-winning economist Milton Friedman puts it, “The FDA has done enormous harm to the health of the American public by greatly increasing the costs of pharmaceutical research, thereby reducing the supply of new and effective drugs, and by delaying the approval of such drugs as survive the tortuous FDA process."