Your Life Ain't Worth a Nickel: Against the FDA

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Bureaucratic management, as distinguished from profit management, is the method applied in the conduct of administrative affairs the result of which has no cash value on the market.

~ Ludwig von Mises

When it comes to our health, one would assume that the government is there to protect us through reasonable and sensible regulations. This is, however, far from the truth. The FDA in particular has been the cause of misery for those who have been unable to legally seek cures and treatment, the result of which ranges anywhere from health complications to death.

Millions Hurt, Billions Wasted

Imagine that you are critically ill, terminally perhaps, and a new experimental treatment has just been discovered. The doctors say that it’s still very new, barely tested, but it shows early signs of promise. You have tried every mainstream treatment available. None of them have worked. In a fit of complete desperation, you decide that, since you’re going to die anyway, you might as well go out swinging. You ask for the new treatment. Your doctor is aghast! Not only will he not be “party to someone preying on you,” he knows the new treatment is expensive and your insurance won’t cover it anyway. Even if you can pay, the answer is a resounding, “No.” You’re stuck. But hey, at least they’re looking out for you.

By the way, there are some who would say that this is exactly what happened to Coretta Scott King. Regardless of the somewhat dicey background of the “alternative medicine practitioner” she went to see, it seems rather clear that the decision should have been hers, not some government agency, no matter how well-intentioned. They and people like them protect you from yourself, but unfortunately, no one is available to protect you from them.

These appalling incidents are not, as many would think, exceptions. They are indeed how the FDA works. It holds a state monopoly on the ultimate decision-making ability when it comes to drug and treatment approval. In other words, it’s health socialism. Instead of the patient making a decision (with the help of doctors and other specialists), the one who gets the final word is a group of government “experts” who, through their decrees, have your best intentions in their selfless hearts. Just a glance at some of the recent behavior from the FDA reaffirms the point. When the FDA removes a senior scientist for voicing concerns about the safety of a product, one has to wonder what their real purpose might be.

When it comes to attacking private property and forcefully preventing peaceful exchange, the FDA is not a newbie. On the contrary, they are quite experienced in the crackdown department. For decades, the FDA has raided healers, vitamin shops and supplement companies. Here we have people who are engaging in mutually beneficial exchange and in comes the almighty state to destroy it all. Regardless of one’s position on “alternate” medicine, what matters is that those willing to sell products have found others willing to buy them. No one should have the right to impede that relationship.

In terms of its effects in the health industry, the FDA slows down the adoption of new technology, creating a chilling effect on development of potential life-saving treatments. Instead of the new drugs, treatments and medical devices being immediately available to hospitals, physicians and patients, they have to go through a lengthy and expensive bureaucratic process. This hurts patients, the ones who would otherwise be able to consume these new products and services. And though companies are sometimes precluded from being unable to develop and sell their technology, they often benefit from intervention. This is because only those who can afford to stay in business long enough to survive the FDA approval process are likely to receive such an approval. Bigger companies, therefore, are able to marginalize smaller ones.

When we combine the nefarious Food and Drug Administration with other policies enacted by the national and local governments, the panorama is not quite a glorious one. Medical patents, corporate welfare, subsidies, tariffs, quotas, regulations and a highly litigious legal system have established barriers that increase the cost of doing business. As usual, we find high prices and low quality. For some folks things are so bad that, just as foreigners travel to the U.S. for treatment that their FDA equivalent has prohibited, some locals are starting to travel to other countries to seek treatment that has been banned here.

If the above wasn’t bad enough, what’s worse is that since this is a government program financed through that pesky practice called taxation, the victims of the FDA are actually contributors to the very system that kills them. The charade is over once we realize that the FDA, far from protecting, is actually victimizing its “customers” by forcing them into a closed set of choices (and sometimes no choice at all). Withdrawing one’s consent exposes this agency’s true criminal nature.

Capitalism: Cause or Cure?

Looking at how insurers tend to influence health care in the U.S. one might reach the conclusion that the free market is the reason why people can’t obtain any type of care they wish. While it is definitely true that insurers can negatively impact how one is treated, the real problem — as expected — extends from the interaction between the state and those who use the state to close down the market. Regulation drives the market to take a certain shape and that shape precludes many of the choices that consumers would otherwise have. Let’s examine a couple of working cases.

Case 1: Person A is sick and he knows exactly what it will take to cure him. He knows both where to obtain his cure and he knows that it will be effective. He decides to obtain his cure from Person B. How is this situation normally handled in a regulated market?

First of all, Person B must be licensed to provide a cure of this type or likely any related services. Based upon the laws in the locale, Person A or Person B, or both of them, could be breaking the law if they were to interact! Consider the lunacy here. A person with knowledge and desire is prevented from exercising his free will, and prevented from making a decision in his own self-interest simply because another organization — an organization only peripherally interested, if at all, in his health — has succeeded in controlling access to the market. Make no mistake, licensing requirements are about little else but control of who can enter a market.

Conversely, how would the free market react? There would be no licensing (state-enforced) requirements. Membership in any professional organizations would be voluntary. While the consumer could take advantage of the recommendations of such a body, no outside influence could require it. Those who wish to consume make the choices and those who wish to provide items for that consumption would be subject to market backlash if what they provide proves to be less than satisfactory.

Case 2: Person A is sick and has no idea what it will take to cure him. He has heard of a cure that has promise, available from Person C, but the possible cure is expensive, due simply to high demand and small supply — that is, because of the market — and this price point will preclude him from obtaining it without help. How is this situation normally handled in a regulated market? This situation would be handled exactly the same way as Case 1, with licensing requirements, artificially smaller markets for cures, etc. Person A is stuck. What about the free market?

Even in a truly free market, it is still possible that Person A’s insurance company could decide that certain treatments are “outside the norms” that would be automatically covered. However, in all probability, there would exist insurers that specialized in “risky” or “experimental” treatments, versus the case now where all insurers’ hands are tied by statist regulation. These insurers could charge a higher premium from their customers, in exchange for allowing them to seek out the “latest-and-greatest” approaches to care. In fact, purveyors of experimental cures would seek insurers out to get on their list of options! Again, with no state to artificially shrink the supply, the “pull” of the market — demand for the treatments — would automatically require insurers to cover more options or risk losing customers. It’s also possible that the drug manufacturers and other health specialists, eager to show insurers (as well as hospitals and doctors) that their treatment is safe, would pay for and publicize their latest test results. Like today, they might also pay for the costs of this experimental treatment.

What these two simple examples are intended to show is that capitalism, sometimes reduced to “the profit motive” does not, by itself preclude any option for which there is a market. In fact, it is only mechanisms intended to reduce choice and implemented with the help of the state that can do this. Without intervention, choices rise to their highest natural level and poor choices are weeded out automatically. With intervention — in the manner of licensing requirements, regulations, etc. — choices fall to the level most appropriate to make those “pulling the strings” the most wealthy, and shield those responsible from the costs normally doled out by the market.

Errors

The FDA intervenes in the economy by being the only organization with the power to determine which products can be bought, sold, imported and used. As such, any errors that it makes impact everyone. There are two kinds of errors that the FDA can make: Type I and Type II.

Also called a “false positive,” a Type I error, in the context of the FDA’s testing system, means not approving a drug or treatment that should be approved. Conversely, a Type II error, also called a “false negative” in the context of the FDA’s testing system, means approving a drug or treatment that should not be approved. Setting the criteria for efficacy too tight means that tests that should be allowed to be sold are not. Setting the criteria for efficacy too loose means that tests that are either ineffective or dangerous get through. So besides having to arbitrarily determine the criteria for testing and coming up with a metric to determine safety, the FDA also has to gamble a bit, for it is simply impossible for it to assume that every drug it approves will not have a detrimental effect on anyone who uses it. Nor can it guarantee that drugs it prohibits would not have worked on some.

At this point we would like to point out that errors do exist in the free market. The difference, however, between the market and the state is that the latter lacks a negative feedback mechanism. In the market, if a company makes a mistake, it can be severely punished by the customers. With the government, no such thing happens. When the FDA makes a mistake, it doesn’t go away or downsize; it cannot be boycotted or legally bypassed; one cannot seek alternate quality control and certification systems. In fact, we are perpetually tied to the FDA and any state agency through taxation. The state has no incentive to be more effective by controlling cost or increasing quality because it can always rely on a constant influx of funds. Private enterprise, on the other hand, has to rely on the repeat satisfaction of its customers for it continue to stay in business and prosper.

Again, the problem is not that errors exist, but rather that when you have a monopoly on drug and treatment testing, when there are errors, some of the key people responsible are unfairly insulated from the backlash. Responsibility without negative consequence always breeds inefficiency and corruption. Imagine that instead of a monolithic FDA we had a myriad of competing agencies. It is the purpose of the testing agency to offer comprehensive and reliable reports on new technologies and to offer insurance companies, hospitals, physicians, and the public in general, an idea of the risks involved with treatments. Therefore if an agency states that drug X contains significant risks (let’s say an above number of severe side effects), it would make this information available. Other agencies, whose clients depend on them for accurate information, would almost certainly jump on this and either corroborate or rebuff the report about drug X.

The FDA has implanted a one-size-fits-all regimen, eliminating choice and crowding out potential advances in the health care industry. Our recommendation? Abolish the FDA.

Conclusion

Medical treatment socialism is but one of the many ways that the state makes our lives less livable. In their magnanimous quest to keep us safe from ourselves, they ultimately close many critical avenues that would have saved thousands (maybe millions by now) of lives.

The state kills. But do not despair. It’s For Your Own Good.

Manuel Lora [send him mail] works at Cornell University as a TV and multimedia producer. Visit his blog. Wilt Alston [send him mail] lives in Rochester, NY, with his wife and three children. When he’s not training for a marathon or furthering his part-time study of libertarian philosophy, he works as a principal research scientist in transportation safety, focusing primarily on the safety of subway and freight train control systems.

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