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Right now it is rumored that the Food and Drug Administration is on the verge of adopting a proposal that will bar an injured party from attacking the adequacy of an FDA-approved warning in products liability cases. The change represents nothing short of a major revolution in thinking about the interaction of tort liability and administrative oversight. On most topics, I am a sharp critic of the FDA. But in this instance I welcome the move, which should work a vast simplification and improvement in our nation’s drug laws. First off, this critical rule change is likely to survive any judicial challenges branding it an abuse of administrative discretion. A formal ruling carries a lot more weight than the FDA amicus letter brief on pre-emption that carried the day in Horn v. Thoratec, 376 F.3d 163 (3d Cir. 2004). The FDA has broad administrative powers, and the trend in recent Supreme Court pre-emption cases gives extensive deference to the choices of agencies in their core area of expertise. This proposed reform need not rest, however, on the crutch of judicial deference because it is fully defensible on the merits. The FDA labors under skewed incentives. Keeping good drugs off the market produces invisible harms that often generate little outcry, except from informed patient groups. Letting dangerous drugs on the market can result in deformed limbs: The agency is thereby subjected to public scorn and congressional investigations. This systematic bias keeps many good drugs off the market for too long. That problem is only intensified if drug companies face suit for drug-related injuries, which routinely crop up in many drugs that have survived the FDA’s marathon process. It is just too easy for the skilled plaintiffs’ lawyer to say, “That large volume of data is just designed to hide the truth from unwary consumers.” No matter what the medical record, the prudent drug company now hesitates to launch new drugs intended for widespread use for chronic conditions like arthritis or high blood pressure. Once one complaint is launched in one case, it can be repeated, as with Vioxx, in all. The one-two punch of risk-averse FDA and a fearful drug company spells longer delays and fewer drugs on the market. Reducing delays to market In my judgment, a pre-emption rule will not make the FDA less risk-averse than it already is. It doesn’t take a suit to create public outrage, so the heat’s still on even if the pre-emption barrier is rock solid. But the incentives on drug companies will be strongly improved because they will no longer have to set aside billions in reserves against the possibility of some common adverse event. So long as the expected value of new drugs is positive, that increased speed will save lives. It will also go a long way to reduce confusion and error. The tort system, in general, works best with automobile accidents, where clear rules of the road and physical evidence-who hit whom-resolve disputes quickly. But the more sprawling the litigation, the less the reliability, and the smaller the chance that the law can serve its acknowledged twin goals of compensation and deterrence. The confusion starts with this simple question: Did the injured party take a particular drug? When months or years can intervene between treatment and illness, slippery memory, not to mention outright perjury, is difficult for any drug company to guard against, when the injured party has exclusive control of the relevant evidence. For drugs not administered in a hospital, product identification must be litigated one case at a time, raising costs for all customers. Then the struggle moves to causation-with a twist. Many people take multiple prescriptions, and are often exposed to other dangerous substances. In those cases without a distinctive “signature” illness, delving into causation can consume gobs of expert evidence without yielding any reliable determination. The plaintiff must also show that if more information had been supplied-but no one knows how much-it would have led him, no matter how desperate, to avoid the drug. But, after the fact, who can figure out what might have been done? The proposed rule offers a much needed once-and-for-all relief against tort reliability. Plaintiffs’ lawyers have already screamed that this approach creates a license to maim. But they can’t show that the expensive and unreliable process of tort litigation pays for itself through improved incentives for good health. Also, they can’t assume that the only way to curb drug company misconduct, if any, is through tort litigation. The FDA is perfectly able to impose fines and sanctions of its own, especially on firms that hide data or rig criminal trials. The proposed FDA rule nips these multiple dangers in the bud in ways that promise more accessibility and affordability of desperately needed new drugs. Richard A. Epstein, an NLJ columnist, is the James Parker Hall Distinguished Service Professor of Law at the University of Chicago, and the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution. He has consulted extensively for the pharmaceutical industry, and his new book on the industry, The Life Cycle of Pharmaceuticals (Yale University Press), will be published this spring.

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