February 2002

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Can the Drug Approval Process be Reformed to Save Lives?

by Laura Jones

AIDS and cancer activists claim
 that "Foot-dragging by bureaucrats and scientists responsible for approving prescription drugs in Canada is resulting in needless suffering and death for patients with debilitating illnesses," (Picard, 2001, p. A12). Health Canada argues: "Throughout [the drug] approval process, the safety and well-being of Canadians is the paramount concern" (Health Canada, 2001a, p. 1). Are the activists right to be so critical?

All drugs sold in Canada must first be reviewed and approved by the Therapeutic Products Directorate (TPD) of Health Canada. To obtain an approval, companies must submit the results of their preclinical and clinical trials—trials that now often take between 12 and 15 years to complete. Obtaining an approval is the last regulatory requirement that must be satisfied before a drug becomes available to consumers.

How efficient are Canadian regulators at completing approvals? A recent study published in the Canadian Medical Association Journal (CMAJ) comparing drug approval times in Canada, Australia, Sweden, the United Kingdom, and the United States finds that Canada had significantly longer approval times than all of the countries except Australia (Rawson, 2000) (see table 1). Although approval times in Canada are shorter than they were in the early 1990s when median approval times were over 1000 days, they still fall short of meeting Health Canada's own target of approving priority drugs in 180 days, and non-priority drugs in 300 days (TPD, 2001, p. 20).

Table 1: Time Required for Approval of New Drugs in Calendar Days

Source: Rawson, 2000.

Regulatory approvals are considered necessary by many to ensure drug safety. In theory, approvals lower the chance of a dangerous drug coming to market. But AIDS activists understand something that many of us forget: time spent on approvals delays and sometimes prevents safe, effective drugs from being available, which costs lives and creates unnecessary suffering. It also makes those drugs that do become available more expensive than they would otherwise be.

A study done by the Competitive Enterprise Institute illustrates the point. The CEI study compared the approval dates of three drugs in the US and other countries and found that approvals for these drugs were slower in the US than in other countries by between 9 months and 3½ years. These "drug lags" are estimated to have caused between 35,250 and 44,000 deaths in the US (see table 2). An earlier study published in the Cato Journal estimated that the net loss of life from the US drug lag in the early 1980s was between 16,000 and 110,000 annually (Gieringer, 1985, p. 196). Although there are no comparable studies for Canada, it is sobering to remember that our drug lag today is longer than the FDA's.

Table 2: The Human Costs of the Drug Lag in the US

Source: DeFalco, 1995

Government regulatory agencies can make two kinds of mistakes: a harmful product can be approved, which is called a type 1 error, or a useful product can be delayed, rejected, or taken off the market, which is a type 2 error. Given that the drug lags observed in the US are estimated to have cost many more lives than they have saved, we can conclude that regulators are making more type 2 errors than they should. Both types of error are undesirable. But delaying or preventing a safe product from coming to market rarely receives much media attention (with the exception of drugs that relieve the symptoms of AIDS, because AIDS activists are well organized). Approving a drug with unanticipated side effects, on the other hand, can be a public relations nightmare. Regulators, therefore, have an incentive to minimize their type 1 errors, which in turn, means more type 2 errors (Miller, 2000, pp. 42-3). While this is not a desirable state of affairs from the point of view of maximizing the number of lives saved, it is perfectly consistent with the incentives faced by regulators.

Some consumers are surely comforted by Health Canada's risk aversion, others who are waiting for drugs that could reduce their suffering or save their lives clearly are not. The current system is a one-size-fits-all risk policy. As Dr. Henry Miller, physician and former American regulator explains:

premarket approval severely limits individual freedom of choice. Personal autonomy is subjugated to government controls. Citizens are precluded from obtaining products they wish to purchase and have no recourse other than to await government approval. (Miller, 2000, p. 17)

The only option available to people who would willingly take a drug that has not been approved in Canada is to travel to another country where the drug or treatment is approved.

One way in which Canada could improve the timeliness of access to new drugs is to agree that an FDA or European approval is sufficient evidence of a drug's safety and efficacy. This would effectively put reviewers at Health Canada out of a job. But the job is redundant anyway because companies submit the same paperwork to Health Canada as they do to other regulatory agencies. Even if reviews at Health Canada were maintained, there is no reason not to make drugs that have been approved in other countries available to Canadian consumers together with information on what regulatory agencies had approved the drug. Consumers who prefer the Health Canada standard would be free to wait for it while other consumers who would willingly take a drug without Health Canada's seal of approval could then have that choice.

A more fundamental solution to the problem is to replace government approvals process with a voluntary approval system conducted by private, independent third parties (Campbell, 1997). Economist Noel Campbell points out that such a system has been working well for over 100 years for the certification of other consumer products including hairdryers, toasters, and cordless phones. Underwriters Laboratories Inc. (UL) is a third party, not-for-profit safety certification and standards writing organization that has certified the safety of products on which millions of people rely. Thousands of manufacturers ask for UL approval to satisfy consumers (Campbell, 1997). Campbell argues that competition between UL and other organizations encourages efficiency and integrity. One would expect the same to be true for drug certification. Third party certifiers would have the incentive to make sure the drugs they approve are safe (or risk going out of business) and to make sure their approvals are timely (or risk losing business to their competitors). Drugs on the market that lacked third party certification would not likely be prescribed by doctors or consumed by patients, except those willing to tolerate higher risks. Campbell explains:

Table 1: Time Required for Approval of New Drugs in Calendar Days Table 2: The Human Costs of the Drug Lag in the US [frames 167, 168]

Private certification would allow different people in different circumstances to balance the risks they accepted. In concrete terms, no bureaucrat could prevent someone dying of AIDS from buying and using AZT or new experimental drugs. (Campbell, 2000)

Health Canada's mission is "To help the people of Canada maintain and improve their health" (Health Canada, 2001b, p. 17). But their slow drug approvals are hurting Canadians. Given this, it is time to challenge conventional wisdom and ask: do we need a federal monopoly over drug regulation? Eliminating the monopoly either by accepting other governments' approvals as proof of safety or by accepting third party certification would almost certainly increase consumer choice, reduce drug costs, and save lives—which would "help the people of Canada maintain and improve their health."

References

Campbell, Noel (1997). Making Drugs Safe and Available without the FDA. National Center for Policy Anlysis. Available on the internet at www.ncpa.org/studies/s208/s208.html.

DeFalco, Julie (1995). "Defeating Drug Lag." CEI UpDate 8. Washington, D.C.: Competitive Enterprise Institute.

Gieringer, Dale (1985). "The Safety and Efficacy of New Drug Approval." The Cato Journal, Volume 5, Number 1, Washington, D.C.: The Cato Institute.

Health Canada (2001a). "How Drugs are Reviewed in Canada." Available on the internet at www.hc-sc.gc.ca/hpb-dgps/therapeut

Health Canada (2001b). Health Canada Departmental Performance Report.

Higgs, Robert, ed. (1995). Hazardous to Our Health? FDA Regulation of Health Care Products. Oakland, California: The Independent Institute.

Miller, Henry (2000). To America's Health: A Proposal to Reform the Food and Drug Administration. Stanford, California: Hoover Institution Press.

Neal, Mark (1995). Keeping Cures from Patients: The Perverse Effects of Pharmaceutical Regulations. London, England: The Social Affairs Unit.

Picard, Andre ( October 18, 2001). "Drug-approval process too slow, activists argue," Globe and Mail, p. A12.

Rawson, Nigel (2000). "Time required for approval of new drugs in Canada, Australia, Sweden, the United Kingdom and the United Sates in 1996-1998," Canadian Medical Association Journal (Feb. 22).

Therapeutic Products Directorate, Health Canada (TPD) (2001). Management of Drug Submissions. Available on the internet at www.hc-sc.gc.ca/hpb-dgps/therapeut/2 files/english/policy/issued/mangdrug_e.pdf.

Laura Jones (lauraj@fraserinstitute.ca) is Director of Environment and Regulatory Studies at The Fraser Institute. She received her M.A. in Economics from Simon Fraser University.

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