Links - Regulatory Failure

What happens when the fix is a fail?

The theoretical underpinning for regulation is to correct market failure. And sure enough the textbooks can identify market failure as well as proscribe prescribe the fix for the problem—“take two government-approved pills and call me in the morning”.

In practice the real world is of course not so tidy. As a result we have problems so bad AOC and Ted Cruz are on the same side against the government’s solutions. And that is just the beginning.

Alex Tabarrok starts us out showing how thanks to the FDA and Congress we in America are stuck with inferior sunscreen as well as much worse common cold remedies.

…In the European Union, sunscreens are regulated as cosmetics, which means greater flexibility in approving active ingredients. In the U.S., sunscreens are regulated as drugs, which means getting new ingredients approved is an expensive and time-consuming process. Because they’re treated as cosmetics, European-made sunscreens can draw on a wider variety of ingredients that protect better and are also less oily, less chalky and last longer. Does the FDA’s lengthier and more demanding approval process mean U.S. sunscreens are safer than their European counterparts? Not at all. In fact, American sunscreens may be less safe.

Sunscreens protect by blocking ultraviolet rays from penetrating the skin. Ultraviolet B (UVB) rays, with their shorter wavelength, primarily affect the outer skin layer and are the main cause of sunburn. In contrast, ultraviolet A (UVA) rays have a longer wavelength, penetrate more deeply into the skin and contribute to wrinkling, aging and the development of melanoma, the deadliest form of skin cancer. In many ways, UVA rays are more dangerous than UVB rays because they are more insidious. UVB rays hit when the sun is bright, and because they burn they come with a natural warning. UVA rays, though, can pass through clouds and cause skin cancer without generating obvious skin damage.

The problem is that American sunscreens work better against UVB rays than against the more dangerous UVA rays. That is, they’re better at preventing sunburn than skin cancer. In fact, many U.S. sunscreens would fail European standards for UVA protection. Precisely because European sunscreens can draw on more ingredients, they can protect better against UVA rays. Thus, instead of being safer, U.S. sunscreens may be riskier.

He mentions the knock-on problem of cold remedies in the article above, but see also here as he is linking to something more direct.

Robert Kuttner discovered an excellent treatment for colds while vacationing in France and is rightly outraged that it’s not available in the United States:

Toward the end of our stay, my wife and I both got bad coughs (happily, not COVID). We went to our wonderful local pharmacist in search of something like Mucinex or Robitussin, which are not great but better than nothing.

“We have something much better,” said he. And he did. It’s called ambroxol. It works on an entirely different chemical principle, to thin sputum, facilitate productive coughing, and also operates as a pain reliever and gentle decongestant with no rebound effect.

We experienced it as a kind of miracle drug for coughs and colds. A box cost eight euros.

Ambroxol is available nearly everywhere in the world as a generic. It has been in wide use since 1979.

But not in the U.S.

But wait, there’s more. Here he explains how the Adderall shortage is due to the guys with guns part of the government standing in direct conflict with the guys with beakers and clipboards.

A record number of drugs are in shortage across the United States. In any particular case, it’s difficult to trace out the exact causes of the shortage but health care is the US’s most highly regulated, socialist industry and shortages are endemic under socialism so the pattern fits. The shortage of Adderall and other ADHD medications is a case in point. Adderall is a Schedule II controlled substance which means that in addition to the FDA and other health agencies the production of Adderall is also regulated, monitored and controlled by the U.S. Drug Enforcement Administration (DEA).

…

Indeed, there is a large factory in the United States capable of producing 600 million doses of Adderall annually that has been shut down by the DEA for over a year because of trivial paperwork violations. The New York Magazine article on the DEA created shortage has to be read to be believed.

…

The DEA’s contradictory role in both combating the illegal drug trade and regulating the supply of legal, prescription drugs is highlighted by the fact that at the same as the DEA was raiding and shutting down Ascent, the FDA was pleading with them to increase production!

Lest you forget from the first article cited above that the FDA are also the bad guys, Alex is here to point out their latest transgression against the good.

A FDA panel voted against approving MDMA (ecstasy) for post-traumatic stress disorder. Putting aside the specifics of the case, I was vexed by this statement on innovation from one of the experts voting no:

“I absolutely agree that we need new and better treatments for PTSD,” said Paul Holtzheimer, deputy director for research at the National Center for PTSD, a panelist who voted no on the question of whether the benefits of MDMA-therapy outweighed the risks.

“However, I also note that premature introduction of a treatment can actually stifle development, stifle implementation and lead to premature adoption of treatments that are either not completely known to be safe, not fully effective or not being used at their optimal efficacy,” he added.

A textbook example of making the perfect the enemy of the good. But the problem is even worse. Holtzheimer seems to think that treatments spring from the lab perfectly formed like Athena springing from the brow of Zeus. Indeed, Holtzheimer suggests that treatments should be kept in the lab until they are perfect. News flash: there are no perfect treatments–no drug or device in use today is completely known to be safe, fully effective, and used at its optimal efficacy. Not one. If we follow Holtzheimer’s counsel, we will never approve a new drug.

Once we let go the Nirvana Fallacy, we might have a chance to stop building brick walls only to charge head first into them.