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Selected research from leading health care experts whose findings have a direct bearing on public policies effecting medical progress. Research is chosen based on its quality and relevance by the Medical Progress Today editorial staff.

Selected Research

Assessing the Safety and Efficacy of the FDA: The Case of the Prescription Drug User Fee Acts
Tomas Philipson, Ernst R. Berndt, NBER, 11-3-05

Even before Vioxx became a hot-button political issue, a fierce debate raged as to whether one critical FDA reform has hurt public health by expediting the approval of too many unsafe drugs.

The reform in question, the Prescription Drug User Fee Acts (PDUFA), allowed the FDA to charge pharmaceutical companies fees in return for hiring additional staff to review marketing applications for new drugs and biologics. This paper shows that PDUFA has led to impressive public benefits, even when safety issues are taken into account.

We find that PDUFA raised the private surplus of producers, and thus innovative returns, by about $11 to $13 billion. Dependent on the market power assumed of producers while having patent protection, we find that PDUFA raised consumer welfare between $5 to$19 billion; thus the combined social surplus was raised between $18 to $31 billions.
Converting these economic gains into equivalent health benefits, we find that the more rapid access of drugs on the market enabled by PDUFA saved the equivalent of 180 to 310 thousand life-years. Additionally, we estimate an upper bound on the adverse effects of PDUFA based on drugs submitted during PDUFA I/II and subsequently withdrawn for safety reasons, and find that an extreme upper bound of about 56 thousand life-years were lost. We discuss how our general methodology could be used to perform a quantitative and evidence-based evaluation of the desirability of other FDA policies in the future, particularly those affecting the speed-safety tradeoff.


Project FDA.
  
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