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A Suitable Remedy

When the FDA Is Weak

By Robert B. Reich
Sunday, January 9, 2005; Page B05

The White House doesn't seem too worried about the medicines we take. Chief of Staff Andrew Card said recently that the Food and Drug Administration is doing a "spectacular" job overseeing drug safety. Really? Even though the agency reportedly didn't act on warning signs linking blockbuster arthritis painkillers to increased risk of heart trouble and strokes? When it failed to warn doctors and parents about the risk of suicide among children taking antidepressants?

Meanwhile, the president is calling for "tort reform." As a first step, his Republican allies in Congress are working on a bill to limit the liability of pharmaceutical companies from lawsuits brought by people injured by drugs or medical devices the FDA had okayed. But the administration can't have it both ways. Either it should move to strengthen regulatory agencies or it should maintain the present system of tort liability. Take away both, and consumers are in deep trouble.

Over many years, the federal government has evolved two systems for preventing the lure of profits from compromising Americans' health or safety. The first is an alphabet soup of federal regulatory agencies stretching from the FDA to the Federal Trade Commission, the Consumer Product Safety Commission, the National Highway Traffic Safety Administration, and on into nooks and crannies at the Department of Labor, the Environmental Protection Agency and elsewhere.

As anyone who has dealt with (or tried to run) one of these agencies knows, the regulatory system is far from perfect. Laws and rules are blunt instruments -- if too lax, people are hurt; if too rigid, the economy suffers. Enforcement is tricky -- finding companies that are in the wrong, discovering the extent of the harm, applying penalties sufficient to deter, coping with all the red tape. And then there are the subtle (and not-so-subtle) conflicts of interest -- revolving doors between the regulatory personnel and the industries they're supposed to regulate, political pressures from elected officials indebted to certain companies or industries, an endless parade of lobbyists and influence-peddlers through agency hallways.

The second system for protecting consumers works through private lawsuits. Individuals who are harmed can sue companies, typically in state courts, for lost wages and medical costs, as well as physical impairments and psychological harm ("pain and suffering") and possibly punitive damages. Sometimes plaintiffs join together in class-action suits under the aegis of trial lawyers who specialize in such cases ("ambulance chasers" if you're a Republican, "consumer champions" if you're a Democrat).

This tort liability system is also imperfect. Lawsuits are expensive and risky for plaintiffs. Large portions of awards go to attorneys. Verdicts can be devastatingly expensive for companies that are found liable. Cases are often complex, and juries can at times be swayed more by emotion than by logic. Further complicating matters, different states often have differing standards of liability. But the tort system has at least one large virtue: It creates a powerful financial incentive for companies to ferret out potentially harmful side effects before they market their products, and to withdraw or redesign dangerous products if and when injuries occur.

Both systems are now under considerable stress, partly because the U.S. economy has changed dramatically, faster than either system's ability to adapt. Even a quarter-century ago, most U.S. industries were dominated by three or four major companies that made a handful of products and rarely innovated, and investors tended to hold on to their stocks. But technology and globalization have changed the rules. Competition today is far more intense. A huge number of products are launched in rapid succession and distributed widely. Publicly held companies are tempted to push new products out before they're fully tested because they're under greater pressure to show profits for investors who are much quicker to abandon a stock that's not performing as well as they'd like it to be.

Even at their best, then, regulatory agencies would be challenged by today's economy. But now they're barely able to cope. Most of their budgets have been whacked over the last four years, their enforcement staffs have shrunk, and corporate political clout is arguably stronger than it's been in more than a century. At the same time, the tort liability system is coming under attack. Republicans who have been urging tort reform for years are in firm control of Congress and the White House and are intent on capping damage awards, limiting lawyers' contingency fees, ending punitive damages and preempting lawsuits involving products already approved by regulatory agencies.

T he popular painkillers Vioxx and Celebrex are cases in point. First the medicines got fast-track approval from the FDA. Then they were heavily marketed directly to consumers -- like many medications whose manufacturers need big profits to satisfy Wall Street and shareholders -- as potentially life-saving medications that avoided the ulcers and bleeding occasionally caused by standard painkillers such as ibuprofen, even though these claims weren't proven.

Under current law, the FDA has no power to mute such promotional hype -- all it can do is approve new drugs as safe and effective, or not. Nor does the agency have any systematic way to monitor the safety of drugs once they've been approved, other than by relying on the manufacturers to report side effects and injuries. It can't require manufacturers to undertake post-approval studies. (The studies that eventually discovered heart problems associated with these drugs were done independently of the FDA.) The FDA lacks authority to suspend the sales of a drug, except under extraordinary circumstances, or to dictate how drugs are distributed or marketed.

Merck & Co. decided on its own to take Vioxx off the market last fall. Pfizer Inc. continues to sell Celebrex but has stopped advertising it pending further study. Manufacturers took milder action on two other painkillers: Warnings about heart risks have been added to Bextra's label, and Aleve users are being instructed not to take it for more than 10 consecutive days. These were the manufacturers' decisions.

An important factor in convincing Merck to remove Vioxx from the market was the mounting threat of lawsuits. Hundreds have already been filed, representing thousands of plaintiffs and including a number of class actions, blaming Vioxx for heart attacks and strokes and alleging a link to more than 1,200 deaths.

Analysts have projected that the litigation might eventually cost Merck $10 billion or more. Pfizer also faces a lot of litigation, although clinical studies suggest that Celebrex might not pose as great a risk as Vioxx. (Nor have any documents emerged, as they did at Merck, showing that Pfizer had doubts about its drug before the studies showing dangerous side effects.) The warnings and instructions now being offered to Bextra and Aleve users could reduce any potential liability in connection with those drugs.

Hence the importance of the tort system. Yet Republican congressional leaders, prodded by Bush's pledge to reform tort law, are expected to introduce legislation soon to prevent consumers from winning hefty damage awards from pharmaceutical companies if they're harmed by drugs and medical devices approved by the FDA. The proposal would cap medical malpractice awards at $250,000 per injured party -- effectively ending such suits, since the attorney's share of damages would barely cover the cost of trying the case. The proposal would also shield doctors, HMOs, nursing homes and hospitals from sharing liability for damages for FDA-approved products.

With Republicans in control and the pharmaceutical lobby on the offensive, the legislation has a good shot at becoming law.

On its face, the legislation seems only logical. There's no reason why juries should be invited to do the same risk-benefit analyses that the FDA has supposedly already undertaken. Indeed, companies that go through the expensive FDA approval process shouldn't have to continue to fight state court battles in order to effectively keep that approval.

But there's one big flaw in that logic. The FDA is no longer able to do its job effectively. The same sort of logical flaw undermines the argument for tort reform generally. Surely both systems -- regulatory and tort -- can function far better than they do now. But unless or until our regulatory system is up to the task, the current tort liability system is our only real defense against corporate negligence.

Author's e-mail: reich@brandeis.edu

Robert B. Reich, secretary of labor under President Bill Clinton, is University Professor of Social and Economic Policy at Brandeis University. He is the author, most recently, of "Reason" (Knopf).

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