THE AMERICAN ENTERPRISE IN­ EXECUTIVE STITUTE FOR PUBLIC POLICY RE­ COMMITIEE SEARCH, established in 1943, is a publicly supported, nonpartisan re­ Herman J. Schmidt Chairman of the Board search and educational organization. Its purpose is to assist policy makers, William J. Baroody President scholars, businessmen, the press and the public by providing objective Charles T. Fisher III Treasurer analysis of national and international issues. Views expressed in the insti­ Richard J. Farrell Dean P. Fite tute's publications are those of the Richard B. Madden authors and do not necessarily reflect the views of the staff, advisory panels, officers or trustees of AEI. SENIOR STAFF Anne Brunsdale ADVISORY BOARD Director of Publications Paul W. McCracken, Chairman, Ed­ Joseph G. Butts mund Ezra Day University Professor Director of Legislative of Business Administration, Univer­ Analysis sity of Michigan Robert B. Helms Directorof Health Policy R. H. Coase, Professor of Economics, Studies University of Chicago Thomas F. Johnson Milton Friedman, Paul S. Russell Dis­ Director of Research tinguished Service Professor of Eco­ Gary L. Jones nomics, University of Chicago Assistant to the President for Administration Gottfried Haberler, Resident Scholar, American Enterprise Institute for Richard M. Lee Public Policy Research Director of Planning and Development C. Lowell Harriss, Professor of Eco­ Edward J. Mitchell nomics, Columbia University Director, National Energy Project George Lenczowski, Professor of Po­ litical Science, University of Califor­ W. S. Moore nia, Berkeley Director of Legal Policy Studies Robert A. Nisbet, Albert Schweitzer Robert J. Pranger Professor of the Humanities, Colum­ Director of Foreign and bia University Defense Policy Studies James A. Robinson, President, Uni­. Louis M. Thompson. Jr. versity of West Florida Assistant to the President for Communication David G. Tuerck Director, Center for Research on Advertising REFORMING FEDERAL DRUG REGULATION @ Jules Bergman, Moderator @ Michael J. Halberstam William N. Hubbard, Jr. Louis Lasagna Gaylord Nelson Alexander M. Schmidt

A Round Table held on February 23, 1976 and sponsored by the Center for Health Policy Research of the American Enterprise Institute for Public Policy Research, Washington, D.C. THIS PAMPIU..ET CONTAINS THE PROCEEDINGS OF ONE OF A SERIES OF AEI ROUND TABLE DISCUSSIONS. THE ROUND TABLE OFFERS A MEDIUM FOR INFORMAL EXCHANGES OF IDEAS ON CURRENT POLICY PROBLEMS OF NATIONAL AND INTERNATIONAL IMPORT. AS PART OF AEI'S PROGRAM OF PROVIDING OPPORTUNITIES FOR THE PRESENTATION OF COMPETING VIEWS, IT SERVES TO ENHANCE THE PROSPECT THAT DECISIONS WITHIN OUR DEMOCRACY WILL BE BASED ON A MORE INFORMED PUBLIC OPINION. AEI ROUND TABLES ARE ALSO AVAILABLE ON AUDIO AND COLOR-VIDEO CASSETTES.

© 1976 BY AMERICAN ENTERPRISE INSTITUTE FOR PUBLIC POLICY RESEARCH, WASHINGTON, D.C. PERMISSION TO QUOTE FROM OR REPRODUCE MATERIALS IN THIS PUBLICATION IS GRANTED WHEN DUE ACKNOWLEDGMENT IS MADE.

ISBN 0-8447-2084-4 LIBRARY OF CONGRESS CATALOG CARD NO. L.C. 76-13424

PRINTED IN UNITED STATES OF AMERICA ULES BERGMAN, science editor of ABC News and J moderator of the Round Table: Good evening. We are gathered for what we hope will be a frank and intelligent discussion of drug regulation and its problems in our society. Perhaps the one thing this panel would agree on, to start with, is that there are vast differences of opinion on how much drug regulation is needed, whether we have the right kind of regulation, whether new drug development is being encouraged or stifled, and whether the Food and Drug Administration [FDA] is doing a proper job. With us to freely and frankly toss bricks at one another are five distinguished experts: Dr. Michael J. Halberstam, a practicing physician in internal medicine and writer; Dr. William N. Hubbard, president of the Upjohn Com­ pany, a little outfit that makes a few drugs; Commissioner Alexander M. Schmidt of the Food and Drug Administra­ tion, an agency that has been in the news a good bit lately; Senator Gaylord Nelson, who has been deeply concerned with the state of legislation in the field of drug regulation and development; and Dr. Louis Lasagna of the University of Rochester, one of the nation's most distinguished phar­ macologists and drug experts and author of one of the definitive books in the field. With that short introduction, I will pose a couple of questions, if I may, to get you gentlemen started. Commissioner Schmidt, whether it is cyclamates, Red Dye Number Two, or whatever, FDA seems to keep crop­ ping up in the news. What is wrong with FDA? [Laugh­ ter.]

1 ALEXANDER M. SCHMIDT, M.D., comm1ss10ner of the Food and Drug Administration: Well, I don't think those necessarily follow each other. [Laughter.]

MR. BERGMAN: I can reverse the order. [Laughter.]

COMMISSIONER SCHMIDT: The FDA is very much in the news and, in some respects, that's quite flattering, because it means we're newsworthy. It means people are interested in what we're doing and why we're doing it. And I think the reasons are very clear if you stop and think about what you do when you get up in the morning. First, by the time they have finished breakfast, most people have come into contact with twenty or thirty products that we regulate. Everything that you eat, all the drugs you take, your television set, the X-ray machine that looked at your luggage when you came down here on an airplane, every­ thing that you put on your skin or smear on, or what have you, the FDA regulates it. Everybody wants to know about these products. Second, people are very much the experts about what they eat and they have very strong feelings, strong beliefs, about this. When the FDA doesn't meet the expectations of people, there is some disappointment. Putting these two things together, you can come up with the question you asked-which I think is a bad question: what's wrong with FDA? But I'd much prefer to talk about what's right about the FDA. I could use up the whole period of time on that one.

MR. BERGMAN: Just try it. [Laughter.] Dr. Halberstam, as a physician dealing :with patients on a daily basis, can you tell our audience why an indi­ vidual patient or consumer should be concerned about drug regulation in our country?

MICHAEL J. HALBERSTAM, M.D., internist in private practice and assistant professor of clinical medicine at George Washington University School of Medicine: I think it is clear to most people who read newspapers why they

2 should be concerned about drug regulation, because they can find stories in the press almost daily-particularly in the Washington press-about drugs that may do bad things to them. They should be concerned for another reason, one that does not get into the papers: there are drugs that have not been available to them that can do good things for them, with certain predictable side effects. I'm referring to the so-called drug lag, and though it's been overlooked, it is a real issue. As a practicing physician, when I read the medical journals published in England, Lancet and the British Medical Journal, I feel a bit like a little child with my nose pressed up against the toy-store window, seeing these marvelous things inside that I can't get at. This has been the situation now with a number of drugs for five, six, seven, and eight years. We're doing better on that, but it has been a problem, and it remains a problem for the consumer.

MR. BERGMAN: Dr. Lasagna, as an expert in this field, where does the drug lag exist, with what drugs, sir?

LOUIS LASAGNA, M.D., chairman of the department and professor of pharmacology and toxicology, University of Rochester: I can give a few examples. There's an ex­ tremely interesting drug called Beclomethasone which is remarkably effective for certain kinds of serious asth­ matics. I find it ridiculous that patients in Rochester, New York, have to go across the Canadian border to Hamilton, Ontario, to get this drug at the moment. Two drugs that are used in the treatment of a variety of cardiovascular diseases have been shown in controlled experiments done elsewhere to cut the mortality of patients who have been discharged from a hospital after a heart attack by about 40 percent on average. We've calculated that that could mean a saving of about 10,000 lives a year in this country, but those drugs are not available here. There are other examples, but these give you a feeling for the problem.

MR. BERGMAN: Why aren't they available, Commissioner Schmidt?

3 COMMISSIONER SCHMIDT: Well, there are many dif­ ferent reasons for what people have termed the drug lag-the availability of certain drugs in other countries before they are approved for marketing in the United States. First, in 1962 we established a system of regula­ tion of drug development and marketing in this country that was not in existence in many other countries. Eng­ land, for example, just two-and-a-half years ago got an efficacy requirement-that is, before marketing their drugs had to be shown to be effective for the purposes claimed. We also have rather stringent safety requirements now about how one can develop drugs, how one can use people in doing research. And these requirements have been imposed as a matter of public policy. Undeniably, one pays a price in time, in dollars, and in manpower for requiring that drugs be shown safe and effective before they are marketed in this country; and most people agree that the price is worth paying. So the first element in explaining the drug lag is that you can't compare this country with its requirements with another country that has no such requirements. Second, drug firms-especially most large drug firms-are multinational, so they can pick and choose where they develop drugs. In this country they face IND requirements * and institutional review committees and also requirements that they obtain informed consent for the clinical research. And now we're talking about requir­ ing follow-up on patients. So when a company has to decide whether to develop a drug here or in a foreign country where it has a subsidiary and where it can cheaply, quickly, and easily develop the drug, you can easily see where that drug company will go to experiment with the drug and firstintroduce it. Beclomethasone, the asthma drug that Lou men­ tioned, was developed overseas. It was introduced in Eng­ land many years before it came here-which was just a couple of years ago-as an application to the FDA. The

• Editor's note: The sponsor of a new drug in the United States must submit a "Notice of Claimed Investigational Exemption for a New Drug"" (Form FD 1571) to the FDA prior to testing the drug on humans. The investigational new drug (IND) form is required to permit the interstate shipment of new drugs for clinical studies.

4 application was deficient. We have been working as quickly as we can to bring that drug into the marketplace in this country, when our requirements are satisfied. But we cannot approve a drug for which we don't have an appli­ cation. So the drug lag has to be analyzed. It has to be broken down. I think Lou has said that there has never been a real drug lag in antibiotics or in certain other drugs; cardiovascular drugs have, I think, been the big problem that people point to.

MR. BERGMAN: Senator Nelson, on the theory that where there is smoke there may be fire, is there something wrong at FDA from your point of view?

COMMISSIONER SCHMIDT: I wish you'd quit asking that question. I don't like your assumption. [Laughter.]

MR. BERGMAN: I don't mean to be a provocateur, Com­ missioner Schmidt, but I do mean to keep the conversation moving, though I'm not sure that's really necessary. I have a feeling this conversation may snowball all by itself. [Laughter.] Senator?

GAYLORD NELSON, United States Senate (Democrat, Wisconsin) : I have conducted hearings in the field of drugs for eight years and, though I think there are many things wrong with both the law and its administration, I have spent most of my time defending the Food and Drug Administration against assault from people who would like to destroy the laws that we have-that is, the require­ ments to prove safety and efficacy by adequately controlled scientific studies. And that's what the issue is all about. It's nothing to put a drug on the market in a country that doesn't make any pretense of protecting its citizens. Chloramphenicol, for example, is spread all over the world. It's a dangerous drug, widely used for improper purposes, with all kinds of people getting blood dyscrasia, aplastic anemia, with no warning whatsoever. We don't allow that in this country and we shouldn't.

5 Just to add to what Dr. Schmidt said, the Senate Sub­ committee on Health announced hearings; every drug company in this country had plenty of notice and the right to come to the hearings. Joe Stetler appeared for the Pharmaceutical Manufacturers Association on this precise question of whether there is a significant drug lag in the country. Now, of course, there has to be a lag when proof of efficacy and safety is required. That's a necessary lag, and I find nobody, no responsible scientist in this country, who would dispose of it. Granted, it might be possible to speed up the process and the drug companies might be able to improve upon the quality of their research. But nobody would want to destroy that law. Nevertheless, we asked Joe Stetler, who was repre­ senting all the major manufacturers and a good many of the minor manufacturers in this country, to name a single significant drug that is available on the European market but not on the American market or for which there is no adequate alternative. Neither he nor anybody else-nor any drug company-could name any such drug, and the FDA representatives said they didn't know of any signifi­ cant drug for which there was no alternative. So I'm not very much impressed by that argument for weakening our requirements, having given the experts adequate oppor­ tunity to produce the evidence. There is a strong attempt, a strong assault upon the proposition that you ought to prove safety and efficacy. Only two or three countries in this world protect the public against lousy drugs. Before the 1962 Kefauver amendments were enacted, every drug company in this country had all kinds of fixed-combination antibiotics in the marketplace. They were among the biggest sellers prescribed in this country. But every single one of them has been removed from the market because they all were found to be irrational, ineffective in combination. There are none left now. They should not have been there in the first place. Nevertheless, back then, the [former] Council of Drugs of the AMA was running editorials saying that fixed combinations were irrational, while in the same magazine, every month and every year thereafter, the AMA took ads promoting them. It was the law and the

6 Food and Drug Administration that got them off the market.

MR. BERGMAN: There is no question about that. Dr. Hubhard, as a drug company president, what are your feelings on this?

WILLIAM N. HUBBARD, Jr., M.D., president of the Upjohn Company: I think we have trouble with taking relative concerns and turning them into absolutes. With all respect, senator, there is on the market a recently approved anti­ biotic in fixed combination. So that generality, although correct from an historic point of view, is not now correct.

SENATOR NELSON: I didn't say there never would be such a thing as a fixed combination. I said they were all removed, and perhaps the example you give is the excep­ tion that tests the rule.

DR. HUBBARD: Good. [Laughter.] As far as what's the matter with the Food and Drug Administration, we shouldn't forget that the agency is doing its very best to carry out the laws as written. If there is a problem, then I think we have to look at the cost and benefits of the impact of those laws. The allegation that we are the only country that has drug-registration proce­ dures that protect people would, I think, be deeply offensive to Sweden and to England and to a number of other coun­ tries that take justifiable pride in having extremely high standards of review before registration. So the problem comes down to what you mean by safe and what you mean by effective, and with all respect, senator, there is no such thing as a scientific proof of safety or effectiveness. Safety and effectiveness are value judg­ ments. Even though those judgments may be informed by scientific data, the amount and character of data that one demands before making the judgment are again a matter of custom, of tradition-and indeed, of changing traditions. I think that what we have in the United States today is a situation in which the FDA is administering the law

7 as well as it can under assaults that, I think, fail to dis­ tinguish between the FDA's statutory responsibilities and the way it carries out those responsibilities. My own view is that the FDA is doing its very best to carry out its responsibilities. The challenge is to find the forum to discuss the public benefits and the public deficits of the law as it now exerts itself in practice-not in intent, because the intent is unexceptionable-rather than to make the FDA, the pharmaceutical industry, and the medical profession-all of them-scapegoats. Something, it seems to me, is awry, and I would seek a forum where a calm concern for the public interest rather than an unre­ lenting search for scapegoats could be established.

MR. BERGMAN: Dr. Halberstam?

DR. HALBERSTAM: Jules, I don't think anyone would argue the need for safety testing in drugs, but I think it is disingenuous to say that there is no significant drug lag. This is a concept that was developed in part by Dr. Lasagna and Dr. William Wardell, and I notice that in a speech at Tulane in November 1975, Senator Kennedy, who has been interested in drugs, admitted that there had been a drug lag and indeed proposed to do something about it. A few days later, in a speech in New Orleans, Dr. Schmidt him­ self acknowledged that perhaps there had been a lag, although it was shortening. But for the practicing physician and for the patient the drug lag still exists and it's very significant. For exam­ ple, in the New England Journal of Medicine of May 15, 1975, in a special article,* two leading allergists and professors of medicine at Massachusetts General Hospital in Boston wrote about Beclomethasone, which is a steroid drug that is not absorbed into the system but works within the lungs and therefore avoids the systemic effects of cortisone. They predicted "on the basis of past experience that years will pass before the FDA will approve Beclo­ methasone. During this period, many children will need­ lessly be stunted in growth and adults will suffer spinal * Editor's note: William Franklin and Francis C. Lowell, "Unapproved Drugs and the Practice of Medicine," vol. 292, p. 1075.

8 fractures. In the patient's best interest, the physician must advise him to leave the country or obtain the drug ille­ gally." That's a direct quotation. Now, I submit that if that article had been written about the side effects from the drug, we would have had stories and hearings all over us, but because they related to the unavailability of a drug, they draw little attention. The drug lag exists. We should admit it, and try to find ways to minimize it without endangering patients.

MR. BERGMAN: No radicals, they, certainly.

DR. HALBERSTAM: No, no radicals they.

SENATOR NELSON: Just to make myself clear, I didn't say there wasn't a drug lag, and I didn't say that the administration of drug regulation couldn't be improved. I said that there is bound to be some lag in any country with standards such as ours, compared with countries that have no standards, such as Mexico or the majority of-

DR. HALBERSTAM: But we are not talking about Mexico. We're talking about Great Britain.

SENATOR NELSON: Britain, too.

DR. HUBBARD: Or Sweden.

SENATOR NELSON: Having looked at the statutes of many countries, I would say that there are only about four countries that have pretty good standards. We ought to do something about the law. What would it be? First, the FDA ought to have authority that the medical profession won't like-post-regulatory author­ ity over drugs in the marketplace. Now, a very potent, dangerous drug with very limited valid use but the poten­ tial for wide misuse-such as chloramphenicol was and many others, too-ought to be subject to the FDA's author­ ity to allow it into the marketplace under conditions that limit it to its proper use. Perhaps it should be administered only in a hospital situation or under other conditions that

9 prevent the kind of wide misuse that characterizes a sub­ stantial percentage of the drugs in the marketplace now. Second, if additional evidence of some risk or danger arises, the commissioner ought to have authority to add further conditions or remove the drug from the market­ place without having to go to court; these days, every time he tries to protect the public, he's brought to court by a drug company. Those two powers would have a very important effect on getting drugs into the marketplace more quickly and on removing them or limiting their use more quickly. PROFESSOR LASAGNA: Could I raise a couple of issues that I think Mac Schmidt and I could agree upon? They relate to deficiencies of the FDA but are no fault of the agency. I refer to its inadequate funding and manpower. Society ought either to stop thrusting upon the FDA more and more tasks or give it the wherewithall to accomplish them. I don't think that the way we're going about it now is really productive and in society's best interests. MR. BERGMAN: We seem to be a society searching for scapegoats in many areas, and certainly we have found enough things that are wrong. But as a newsman, I find half my desk is covered with unresolved drug issues and medical issues, whether it is malpractice, chloramphenicol, cromolyn, or what have you. I also happen to come from a family of doctors who are prolific letter writers, and every day I find a few more needling notes and a few more clippings. My brother, a pediatrician in Massachusetts, is one of those poor souls who was on the verge of smuggling in cromolyn from England, because he found it was the only efficaciouspreparation for pediatric asthma. And he's a super-conservative doctor; who regards aspirin as one of the few experimental preparations that may really have proven itself. [Laughter.] I suspect that besides the prob­ lems of size and funding that Dr. Lasagna mentions, the FDA should not be judge and jury, a role legislatively cast upon it since its creation really-just as the FAA was judge and jury for many decades until the safety function was split off by the creation of the National Transportation Safety Board.

10 SENATOR NELSON: FDA insulated itself from assault­ and there were plenty in the American Medical Association and outside who wanted to assault it-with the system set up under the Kefauver amendment of turning over the evaluation of the efficacyof drugs to the National Research Council of the National Academy of Sciences. The panel for each class of drugs is not easy to assault because it is composed of distinguished clinicians with national reputa­ tions. That makes good sense. I think the commis1;1ioner ought to be relying in this fashion upon independent, out­ side scientific expertise as much as possible-and I under­ stand they are doing more and more of that.

MR. BERGMAN: I agree, as long as throwing the problem to the National Academy of Sciences isn't a dodge to escape responsibility.

COMMISSIONER SCHMIDT: I am getting to be an expert on Beclomethasone, because when people talk about the drug lag, and they have their nose pressed up against the window looking at the goodies inside, the goody is always Beclomethasone. We have a one-drug drug lag. [Laughter.] You know, the only thing that offends me is that people assume that we at the FDA are back there saying, "Ha, ha, there's Beclomethasone. We're going to ignore it for another day," or something like that.

DR. HALBERSTAM: I have no idea what goes on back there.

COMMISSIONER SCHMIDT: First of all, the assumption that it is going to be years before Beclomethasone makes its foggy appearance out there is erroneous. We will ap­ prove Beclomethasone as soon as it meets the requirements that have been established by the Congress of the United States as we have interpreted them. One of the things that I would like very, very much to do-and I cannot to the extent that I would like-is to explain 'to everybody ·what it is we're doing with Beclo­ methasone. We are prohibited by law from discussing things like safety and efficacy data that I do not believe

11 should be in the realm of trade secrets. We should be able, in open advisory committee session, to take up Beclo­ methasone and to discuss what the deficiencies are in the demonstration of safety and efficacy and get consensus as to what it is, on what basis it will be approved, and when we can approve it. Then all of this nonsense about what we are doing or not doing would go away. If public policy needs to be changed, you can put the heat where, in my view, it belongs-on Congress to change the law.

DR. HALBERSTAM: The physician doesn't know what's going on and who is responsible, but it is clearly not a one-drug issue. In November 1972, again in the New England Journal, a series of articles discussed the treat­ ment of hypertension and the use of propranolol, which is what is called a beta-blocker, a new class of drug in the treatment of hypertension.* The articles treated it just as they did all the other classes of drugs-although, as I wrote to the Journal, the authors forgot to mention that propranolol was not approved for treatment of hyperten­ sion. Now, that article by two distinguished experts ap­ peared at the end of 1972, and my letter appeared in the spring of 1973. It's been three years now, and the drug still has not been approved for use in hypertension. It is approved for angina pectoris, that is, heart pain from coronary-artery disease. But approval for hypertension is dreadfully slow in coming. If people had just ignored the FDA and gone ahead and used propranolol, thousands of patients wouldn't have died and hundreds of thousands would have been in much less distress.

DR. HUBBARD: There is an optimization problem that we're walking around. The 1962 amendments were heavily influenced by the thalidomide disaster. The floor amend­ ments that are. an important part of the history of that legislation all came after review and were a reaction against a terrible thing that just couldn't be allowed to

,, Jane J. Sidd and Lot B. Page, "Medical Management of Primary Hyper­ tension" (Part 3, of 3 parts, November 23, 1972), pp. 1074-81.

12 happen again. Out of that incident came a mood of opti­ mizing the safety of the products that were presented to the public. Very little in the history of that legislation urges on the Food and Drug Administration a role of advo­ cacy to move a new agent into even limited use as rapidly as reason would allow. The entire history is one of urging constraint, and I think it is true that the FDA has never been criticized for delaying the introduction of an agent, but has frequently been criticized for allowing a drug to be introduced. Most of the recriminatory hearings that the FDA has been exposed to have been on allegations of moving too rapidly. Now, if you add up the requirement of very strong data support for a judgment of safety and efficacy, the legislative history that reflects the fundamental aim of preventing another thalidomide disaster, and the absence from the legislation and its history of any charge to the FDA to move a new therapeutic entity into the public realm and to the public benefit as soon as feasible, then I think it is inevitable that it will take a long time to introduce a new agent-certainly longer than it would if those con­ ditions did not exist. But I don't believe that that means that these agents will not be available. They will be, but in a longer period of. time, and that poses a very difficult judgment: Is the loss of benefits that could be obtained if the drug were available in that time larger or smaller than the demon­ strable degree of protection against another thalidomide disaster? Simply put, do the benefits of increased certainty about the drug arising from the delay outweigh the bene­ fits that might have arisen from its use during the delay? This is a relativistic question. It is not all or none. There are no white hats and black hats, no bad boys and good boys. It is an exquisitely difficult question. And it points up the lack in the United States today of a forum in which people of responsibility can calmly and objectively explore those questions.

MR. BERGMAN: Which I hope we are doing at least partly here. Dr. Lasagna?

13 PROFESSOR LASAGNA: May I enlarge the discussion a little bit by referring to an international drug lag, if you will, a situation in which the United States is not the country that approves all drugs the last-we are occasion­ ally ahead of the others. The point is that there is a lag­ not that the United States is always the laggard. What I findstrange is that a drug should be approved in one coun­ try ahead of another. Ideally, it seems to me that when a drug has been demonstrated to be effective and to be reasonably safe, it ought to be available to all sick people all over the world.

MR. BERGMAN: At a reasonable price.

DR. HALBERSTAM: And a reasonable profit as well. [Laughter.]

PROFESSOR LASAGNA: I think at the moment a lot of studies are duplicated needlessly in various countries in part because of a jingoistic wish to prove that one coun­ try's data are better than another's. I don't believe that controlled experiments should have to be repeated in the United States, for example, if impeccable trials have been performed in Sweden or Switzerland or the United King­ dom or any other country where there are responsible investigators capable of doing good work. And the reverse should also be true. I hope we could aim for the day when a company could file an international new-drug application with the reasonable hope of getting it approved simultaneously all over the world. At the moment my hunch is that some countries have standards that are too lax by my criteria and that we are at the other end of the spectrum, demanding more than I think is reasonable in the way of evidence. Now, if that's a matter of the law or the regulations, then we ought to change them. If it is a matter of interpretation, then it becomes another issue.

COMMISSIONER SCHMIDT: Quite recently, the FDA pub­ lished final regulations that set out the conditions under which we will accept foreign-generated data for evaluating

14 a drug in this country. I think that when the studies are impeccably done in other countries and when we can look at the raw data if we need to, there is no problem and we would share available data with other countries. The difficulty is that in many countries the studies are poorly done, and the type of data that is accepted for demonstra­ tion of efficacy is simply not acceptable in this country. So in addition, I think, we must have some kind of a common agreement about the quality of data that are acceptable.

DR. HUBBARD: The problem is not even informed con­ sent.

COMMISSIONER SCHMIDT: Well, there are a number of very important issues-informed consent, the ethics of research. There is a lot of feeling that we should not benefit by exploiting the citizens of those countries that don't provide the protections for the research subjects that we do provide. A marvelous example of what many of you have been talking about is coming down the pike right now, because we are in the process of developing regulations that would make it mandatory to follow patients for years after they had been experimental subjects, if there were a reason to do so. This would call for a commitment on the part of the drug developer to invest the resources necessary to track down everybody, do examinations, and so on if an adverse reaction to that drug turned up.

MR. BERGMAN: Who decides if there is a reason to do so, Dr. Schmidt?

COMMISSIONER SCHMIDT: Well, the way we're writing the regulations, the FDA would. And there is good reason for this because, in effect, we would be in the best position to know. If you want to know what's wrong with the FDA, read what was in the congressional hearings on those regu­ lations. You would think that one of the things wrong with the FDA is that we have not yet promulgated those

15 regulations. But, according to our critics, if we do promul­ gate them, they will have a significant impact on the cost of doing research in this country. They will contribute to a drug lag, if there is such a thing. They will tend to drive research overseas and to stifle innovation in this country. These are the charges that are thrown against the FDA for its regulations. And it is interesting to me that the real issue is a public policy issue of whether subjects of research in this country are to have the pro­ tection of the research sponsor's commitment to long-term follow-up for any adverse reaction that develops as a result of that research. I sincerely wish that in Dr. Hub­ bard's public forum a consensus would emerge on whether we should have those regulations. Then I would like the dollars and the people and the elbow room to do a good job of regulating that aspect of drug development.

PROFESSOR LASAGNA: Could I pursue the issue of whether we should ignore data from a study otherwise properly done abroad but under ethical constraints looser than we might consider appropriate? It seems to me highly unethical for us to insist on repeating studies whose data are convincing because the political climate in this country is such that we don't like research done under those con­ ditions.

COMMISSIONER SCHMIDT: Our regulations say that we will accept data developed under the Helsinki Conventions and the protections of-

PROFESSOR LASAGNA: No, I'm going beyond Helsinki. Let's pose the unlikely possibility that a bunch of Nazis have done terrible experiments under gruesome circum­ stances but, in fact, have come up with a cure for cancer.

DR. HALBERSTAM: I think that gets too deeply into the whole issue of ethics, which opens up an entirely different forum.

PROFESSOR LASAGNA: Well, I raise it, though it sounds ridiculous, because it seems to me we ought to be looking at the data, whatever their source.

16 COMMISSIONER SCHMIDT: Well, you're making a rule, and as a rule, I would stick with the internationally ac­ cepted ethical considerations. If you're talking about an isolated instance of abysmal research, unethical research that turned up the cause for cancer, then clearly one would utilize that knowledge while deploring the circumstances of its development. What I'm talking about is public policy and a rule, and I'll stick with the rule that we have.

DR. HUBBARD: But you all are again arguing the ex­ tremes. What we have is a problem of an investigation that is unexceptionable in terms of the ethics of the coun­ try in which it takes place; but, unlike ours, the style there does not require the patient's signature when he gives informed consent or that a record of that consent be kept. All you have is the investigator's word. This is the kind of problem that troubles me. It isn't the Nazis we're worried about. It's people who are just as ethical as we are in the United States but who rely on the Greek tradition of purpose rather than the Roman tradition of legalisms. The difference is very profound and at present, as I understand it, we could not accept data unaccompanied by validation that informed consent had been given.

SENATOR NELSON: That may be correct. The standard set in law since 1962 is quite simply stated, as you well know: efficacy has to be proven by adequately controlled scientific studies. It is the scientific community in this country that decides that, not the Congress. We aren't qualified to do so. The standard, as you have said, is not under assault at all. Now, if the medical community, scientific commu­ nity, and the FDA think they need some additional guid­ ance, why don't they tell us? But if we tried to decide it up on the Hill with a specific statute, you'd say we were irrationally interfering with the scientific community and the practice of medicine. We just gave you a simple standard. If you can't figure it out, then ask us for some help. Maybe we can give it.

17 DR. HUBBARD: Senator, the Ten Commandments are fairly simple, too, but they've caused confusion over the years. [Laughter.] SENATOR NELSON: Well, doctor, you've been fuzzing it up all evening long. Let's take a practical example. You're talking about various forums and so on. Are you in favor, for example, of relying on the method for testing the efficacy of the drugs in the marketplace established under Dr. Goddard-for the National Academy of Sciences­ that uses distinguished clinicians all over the country to evaluate the various classes of drugs? Is there anything wrong with that system, or do you have a better one?

DR. HUBBARD: I don't have a better system. SENATOR NELSON: Well, then, let's use that. DR. HUBBARD: The problem is to examine this system, which is really the only one available, and see if we can't change it so that it relieves the FDA of inappropriate attacks- SENATOR NELSON: I'm for that. DR. HUBBARD: -and also relieves physicians and the pharmaceutical industry of inappropriate attacks, because, after all, we all have a common purpose. And none of us is going to survive in this endeavor except if we act in the public interest. So the question really is a relative one: are we doing the best we can with this system? SENA TOR NELSON : Let me ask a further question. Did I understand you to say you're satisfied with the NAS pro­ gram established by the FDA and the responsibility given to it? DR. HUBBARD: Senator, I'm satisfied with the scientific methodology. I grew up in it. I'm part of it. SENATOR NELSON: I'm trying to figure out, Dr. Hub­ bard, what you're talking about. What is it that you think ought to be done?

18 COMMISSIONER SCHMIDT: I think that he is talking about something that any one of us could agree to, and that is that things can now be done to improve the system that we have based on the Food, Drug and Cosmetic Act and the 1962 amendments. My list would include a sharpening of the FDA's authority, provision in certain areas of resources to carry out that authority, more cogent and open planning of research so that everybody would know what the require­ ments were in advance of conducting the research, and sequential review of how the drug was being developed with some sign from the FDA along the way as to how things were going. I think expediencies in a number of areas can improve the system. Some will take legislation, which is what many of us mean when we talk about reform of the drug­ regulation system: reform means agreeing as to what the system is about, being sure that it is equipped properly, and then working to make it as efficient as it can be.

PROFESSOR LASAGNA: The fundamental disagreement between scientists in general and people in the regulatory agency rests on the acceptance by the scientific community of findings appearing in reputable journals around the world that a drug is effective. This acceptance reflects their belief and faith. In the regulatory agency, on the other hand, the feeling is one of skepticism-that without scrutiny of those individual patient sheets, one cannot believe investigators. And I'm sure the FDA could cite occasional instances of investigators who did not tell the truth.

DR. HALBERSTAM: It is hard to see that the FDA has any perspective on the urgency for certain drugs in certain situations. Although it may not be true, it seems that the same slow process is followed both for a drug that is a dramatic innovation with no precedent and no challenger and for a drug that is only moderately different from others already in use, or is prescribed for a much less serious condition.

19 COMMISSIONER SCHMIDT: Well, one of the reasons we keep asking for all these pieces of paper that contain the data supporting the contentions is that I have to keep taking them up to Congress and showing Congress­ [Laughter.]

MR. BERGMAN: No one ever said you had an easy job, commissioner.

SENATOR NELSON: And you should have to do these things. You don't quarrel with the standard in the statute, I take it, doctor?

MR. BERGMAN: I have to break in. Forgetting the ex­ tremes that you all have been referring to, is it not true that fewer and fewer NDAs * are filed each year, because of the excess of regulation and paperwork?

COMMISSIONER SCHMIDT: Each time you ask a ques­ tion, you're safe until halfway through, and then you tack on a reason that gets you into trouble. [Laughter.]

MR. BERGMAN: Is it not true that fewer and fewer NDAs are filed each year?

COMMISSIONER SCHMIDT: Well, if we talk about what's important-new chemical entities, new drugs-one finds some very interesting things. Briefly, one is that the decline in new chemical entities began before 1962. Second, although the rate of development of new chemical entities has been fairly constant since 1962, it has turned up in the last year or two so that more have been showing up for approval and more have been getting approved in the last two years.

DR. HALBERSTAM: In other words, there wasn't a drug lag, but it's better. [Laughter.]

* Editor's note: Prior to marketing a new drug in the United States, the manufacturer must submit a New Drug Application (NDA) demonstrating that the drug is "safe for the use suggested on the label" and must re­ ceive FDA approval of the application.

20 DR. HUBBARD: There are intellectual drug lags. There is a famous drug lag between the time that Paul Ehrlich did his first chemotherapeutic work and the time of the introduction of the sulfanamides. There were no new highly significant chemotherapeutic entities in that period; biologics, yes. Now, why, with all that chemistry was doing, was there that enormous lag of new chemical en­ tities in those years? It's one of the great mysteries in the history of pharmacology, so that I don't know whose side I'm on, but when we talk about drug lag, we're talking about a great complex of problems, and it starts with the intellect. It is not possible to forecast a specific rate, or guar­ antee that the same number of significant new chemical entities will appear every year. History points to an in­ terval, long before the Food and Drug Administration was even conceived of, in which there was a remarkable drug lag that to this day has no explanation. So drug lags are real, but they are extremely complex, and you have to be very cautious about how you discuss them and their origins. Now, if you ask the question the other way-given an entity, how long does it take to go through the steps to registration?-you can get a fairly straightforward response. But the whole concept of drug lag is quite apart from the length of time it takes for the registration of a new entity.

R. BERGMAN: Now, in the second part of M this unrehearsed attack on the FDA and drug regulation in this country, the audi­ ence gets in its licks with some questions. In our usual impartial, totally spontaneous style, the moderator has preselected the first two questioners-but not, I guar­ antee, their questions.

CAROL BENSON, National Association of Environmental Professionals: I'm a socioecological consultant and, as

21 such, I work sometimes in the field of ethics. I have a question for Dr. Hubbard. What would be the ramifica­ tions as far as liability is concerned if a drug company really did choose to follow, on a long-term basis, one of the subjects of its clinical trials and found that some life­ threatening effects had been caused?

DR. HUBBARD: I can't answer in economic terms. All I can say is that the company I work for assumes this obligation. Now, the problem is that we have a highly mobile population in the United States; keeping track of somebody for two years, let alone twenty, is a formidable task, so that between the intent and the feasibility of execution, there is a great chasm. And if you push the question to its logical extreme, and say we would have to keep documentation of the location, by year, of everyone who participated in a trial for twenty-five years, then we would increase our polyurethane chemical activities and diminish our pharmaceutical activities.

MR. BERGMAN: Let me ask one thing quite quickly, Dr. Hubbard. Do the drug companies carry liability insur­ ance to protect them?

DR. HUBBARD: All drug companies carry liability insur­ ance. Whether it is actually a protection against the kind of major hazard that it intends to insure, I don't know. Let me explain. Most companies self-insure against claims that are really quite large-a few million dollars-and the insurance that's carried is in layers beyond that. If a com­ pany has done something so heinous that it is exposed to that kind of liability, I'm not sure that the insurance means much; but we all have it.

MR. BERGMAN: Since I cover aviation as well, and fly, I know how self-insurance works. The airlines self-insure their first six or seven or ten million dollars of liability, and take that loss in tax deductions. Beyond that, a second or third crash comes out of insurance because that's more than any single airline could afford. We all know how profitable the airline business is.

22 DR. HUBBARD: The airlines have the advantage that limited liability has been written into the law. In the pharmaceutical industry we don't have that yet. [Laugh­ ter.]

GAIL UPDEGRAFF, Food and Drug Administration: As I'm sure that both Senator Nelson and Dr. Hubbard are aware, Commissioner Schmidt has proposed that there be a Phase IV with respect to drug regulation.

MR. BERGMAN: What is Phase IV?

COMMISSIONER SCHMIDT: It's post-market monitoring. We believe it would be good, in some instances, to trade off early approval of a drug for some control that would allow us to determine things about its use that could be learned by wide experience with it. So a Phase IV trial would be, in effect, a study of the early use of the drug in commercial sale.

MR. UPDEGRAFF: I would like to have a comment from both Senator Nelson and Dr. Hubbard about what they think Phase IV would do, in Dr. Hubbard's case for the drug industry, and in Senator Nelson's case for the safety and efficacy of drugs.

SENATOR NELSON: I proposed that with respect to chlor­ amphenicol five years ago. We have legislation almost completed in my office now to do exactly that.

MR. BERGMAN: Why has it taken five years?

SENATOR NELSON: I didn't get around to drafting the legislation until now, that's the main reason. [Laughter.]

DR. HALBERSTAM: As a practicing physician, I think that there is validity to the idea of releasing drugs in a somewhat controlled way, rather than the all-or-none situation that we have now. But I think that we would make a mistake if we released them only to certain classes of doctors, particularly specialists or sub-specialists. I

23 think the Congress, which has been making a special effort to turn out family practitioners, will get into trouble about that. The effort should be designed to release drugs for certain conditions, for certain patients-and not as a research tool primarily, but as a way of getting specific drugs out to specific patients.

DR. HUBBARD: I see it as a plausible and useful idea. The difficulties are enormous. If a drug were released only to hospitals, what would you say to the local phar­ macist? And the questions can go on and on: How many patients would you like to have? Would the patients be seen in circumstances different enough from those apply­ ing to Phase III * so that you would actually be increasing your experience? How rare an adverse effect would you wish to protect against-one in 10,000? one in 50,000? The problem is not the validity of the concept, but the ability to manage it so that it responds to the indi­ vidual case. And what I fear is that it would be so legalistically interpreted that this kind of discretion would not be available. That would be a tragedy.

BOB WOODWARD: I am from the Department of HEW, the Brookings Institution, and the University of Western Ontario. Dr. Schmidt has mentioned his desire to pub­ licize the clinical-efficacy information now classified as trade secrets. Dr. Hubbard has mentioned the exquisitely difficult task of exactly determining when the benefits and costs of drugs are such that the new drugs should be put on the market. I wonder if we can get our philosopher, Dr. Hubbard, to indicate whether he would actively support a practical step that might speed the approval process-in particular, whether he would actively back publicizing the clinical-trial information now classified as trade secrets?

DR. HUBBARD: It's a non sequitur, because I see no rela­ tionship between the regulations as they are now written and putting the information in the open literature. These

* Editor's note: Phase III is the period during which a drug is tested on healthy human beings.

24 are different questions. They are both good questions, but they are unrelated.

MR. WOODWARD: I would only ask if Dr. Schmidt would agree with that.

COMMISSIONER SCHMIDT: Well, if I understand your comment, I would agree that much of the clinical-trial information, or some, does find its way into the open liter­ ature. However, much does not. In the past there has been some unfortunate repetition of clinical trials by different companies wishing to bring the same drug on the market. And, in general, the safety and efficacy data, including that derived from humans, are looked upon as proprietary information. It would be difficult to separate patent issues and protection-of-investment issues that are very impor­ tant for the well-being of the pharmaceutical industry, but I think we must try somehow to tease these issues apart and see what it is that we really want to use to protect companies' investment, for example.

ROBERT CHIEN, Institute of Health Economics and Social Studies: I'm an economist in the health field and I'd like to ask Dr. Schmidt a question. You have indicated recently that you think we should arrive at a national expectation of the FDA. My question to you is, what specifically do you have in mind when you speak of national expectation? And if there is one, by what process do you hope to dis­ cern it?

COMMISSIONER SCHMIDT: Well, I used one example a little while ago: whether we promulgate regulation that would force a company to keep track of people who have been in its clinical trials. One good place to look for an answer is the forty­ seven General Accounting Office reports that have come out about the FDA since 1969, or the seventeen GAO reports that came out in the last year. If the cost of doing what the GAO recommends were added up, the FDA's budget would rise to between half again as much and twice as much as it now is.

25 Now, we are beaten bloody in congressional hearings, in the public media, and so on, for not having done things that apparently people in the GAO think we should do, that people on congressional staffs think we should do, that consumer advocates think we should do. Clearly there is no consensus about how rigorously, for example, we should be looking at the physicians who do clinical re­ search. There are 12,000 such physicians across the coun­ try, a good many of them in medical schools. From a recent report I would assume that we are expected to police quite tightly these 12,000 investigators. Is that what we are to do? Because if it is, give me several hundred people and about $10 million-$20 million-and I will do it; and the agency will do a very good job. Achieving consensus about what is expected of FDA is very important. The forums I have looked at include the Institute of Medicine, which I think could evolve into some kind of a forum for this. Certainly, congressional committees could, in my mind, be immeasurably improved for the benefit of the FDA and the people of this country if the oversight hearings took up some of these issues rather than, as in too many, serving as shooting galleries for taking shots at the FDA.

SENATOR NELSON: I hope the audience knows that there are at least six committees that conduct hearings on the Hill and that all of that stuff you're talking about doesn't apply to my committee.

MR. BERGMAN: Well, of course not.

MR. CHIEN: May I ask another question? I'm not satis­ fied. Let's suppose there is a new drug that would save a hundred lives, but might harm ten. Has there been set up-in your mind or anywhere-a criterion to guide you in deciding whether to approve this drug?

COMMISSIONER SCHMIDT: No. Your point makes an­ other point, and that is that we are in the business of balancing benefitand risk. And it comes down ultimately

26 to a judgment. One of the reasons that we are trying to open up the agency, that we are using and will continue to use advisory committees, that we are seeking expert help, is so that we can have the best scientific basis on which to make the best possible judgment. Each case is so different. The judgment must be tailored to the dis­ eases, to the conditions, to the type of side effects, to the amount of suffering that's involved, and so on. Economists don't like that, and I don't like a lot of things economists say, so we're even. MR. CHIEN: You haven't answered my question, though. COMMISSIONER SCHMIDT: That's the best I can do. The answer is no.

MR. CHIEN: You would not approve it? COMMISSIONER SCHMIDT: No, sir. You asked, is there a rule by which we would approve or disapprove a drug that would save a hundred lives and kill ten? The answer to that is no. There is no rule.

MR. BERGMAN: If I may interject, I think what Mr. Chien meant to say was: If you could save a hundred lives but might lose ten, would you approve the drug? That's a yes-or-no question.

DR. HUBBARD: Yes. In cancer chemotherapy.

COMMISSIONER SCHMIDT: Dr. Hubbard says yes. We've done it in cancer chemotherapy. There are drugs that we would approve that meet those criteria. But, you know, it has been pointed out tonight repeatedly that thi'> is an extremely complex area. And if you believe it isn't, wait until your Aunt Tillie gets sick and you'll find out. These issues are not amenable to simplistic formulae. I'm sorry, but that's the way science is: the answers to many of our terribly agonizing questions are imperfectly inadequate.

DIANNE LEVINE, Council on Wage and Price Stability: I'm a patient, but I also happen to work for the govern-

27 ment, the Council on Wage and Price Stability. I'd like to hear comments on a criterion for approving a drug like the drug just described-one that would save a hundred lives. What about leaving it up to the patient, telling the patient what symptoms, or conditions, the drug has been found to alleviate, about the side effects that have not yet been found not to occur. In other words, why don't we give the patient all the available information, as well as the gaps in the information about the drug, and let the patient decide?

COMMISSIONER SCHMIDT: That approach is used to some degree-to a lesser extent, I think, than it should be. My own view, and the way I've tried to practice medicine, is that a decision on the part of an individual to take a drug is, and should be, a joint decision between that indi­ vidual and the expert consultant, who is the physician. And I think that the patient should know the good and the bad. That's why we are moving into patient package inserts, for example-to provide that information. Some­ times this process is very difficultto carry out, and at other times the benefit-risk decision that the agency makes obvi­ ously comes before it and is separable from it.

MS. LEVINE: Well, what about the two drugs mentioned earlier this evening in the discussion of the drug lag, one that would treat arthritis and one that would treat hyper­ tension?

MR. BERGMAN: Dr. Halberstam, as a practitioner, do you tell your patients?

DR. HALBERSTAM: Yes. I think that the patient should certainly participate in the decision, but not all patients want to. And the move by the FDA to provide the patient with package inserts containing information about side effects on all drugs has its clear drawbacks because of the psychological principle of "motivated perception." People perceive what they expect to perceive. If you tell people in advance that when they take this drug, they may have dry mouth, excessive salivation, rapid pulse, slow pulse, im-

28 potence, frigidity, whatever, you'll be surprised how many people will develop these symptoms, and how many other people will sit around in terror waiting for them to develop. Also, while I believe in informing patients, I think there has to be some kind of mutuality. Some patients clearly reject information about the drugs, they don't want to hear about it. I like patients to ask about it. MR. BERGMAN: Isn't informing patients your moral re­ sponsibility, or ethical responsibility, as a doctor? DR. HALBERSTAM: Yes. But I can't force information on people who don't want it.

MR. BERGMAN: Right. But let's suppose I come in and tell you I have corns. And you say it's because I've been stepping on the FDA so much that my feet have grown too big-[laughter]-and you say that you're going to prescribe drug X and that the only trouble is it will leave me with a continual dry mouth.

DR. HALBERSTAM: Well, of course, it's in the physician's interest that he, or she, inform the patient about major side effects just so the physician doesn't get phone calls at nine o'clock at night saying, "I have a dry mouth, could that be the pill?" You certainly want to inform patients about major common side effects, or serious side effects. The question is, how many and under what circumstances?

MR. BERGMAN: I'm not sure dry mouth would be con­ sidered a serious side effect. Is it?

DR. HALBERSTAM: It can be-if you're a speaker, it is.

SENATOR NELSON: Sometimes it helps speakers. DR. HALBERSTAM: For a senator, it's probably a tragedy. [Laughter.]

WILLIAM WARDELL, School of Medicine and Dentistry, University of Rochester: I'd like to ask Commissioner Schmidt, first of all, whether he knows that his statement

29 about the efficacy requirement is incorrect. It is often said by the FDA that the reason for a conservative posture inthe United States is that we have had an efficacy require­ ment for so much longer than other countries, and the example he used tonight was that Britain got one only two-and-a-half years ago. In fact, if you read the first report of the Committee on Safety of Medicines, as quoted in our book * - COMMISSIONER SCHMIDT: Do you allow commercials? [Laughter.]

MR. BERGMAN: In this case, yes. I would say that the book ought to be required reading for every FDA employee. Go ahead, Dr. Wardell.

DR. WARDELL: You will note that the Committee on Safety of Medicines reaffirms the British policy, enunciated as far back as 1965, that there's no separation between safety and efficacy. So my first point is that it is incorrect to say that Britain-or for that matter, any other English-speaking country-lacks a sensible policy on efficacy. My point here is that it's not the fact of an efficacy requirement that matters; it's how it's interpreted and administered. My next question relates to the- [Laughter.]

MR. BERGMAN: What was the first question?

COMMISSIONER SCHMIDT: Questions are usually fol­ lowed by a question mark-[laughter]-and they are usually followed by answers too.

DR. WARDELL: I would like to hear Dr. Schmidt's answer.

COMMISSIONER SCHMIDT: And I would like to ask you a question, namely, if Britain had a requirement for efficacy all along, what was it that happened two-and-a­ half years ago?

* William M. Wardell and Louis Lasagna, Regulation and Drug Develop­ ment (Washington, D.C.: American Enterprise Institute, 1975), p. 101.

30 DR. WARDELL: What happened to what? I'm sorry?

COMMISSIONER SCHMIDT: Furthermore, I have talked with people in a great many English-speaking countries, and I have sat with their regulators and compared U.S. efficacy requirements in law, in regulation, against theirs; and ours are different from theirs. It is true that gentle­ men can sit around and agree that safety and efficacy are intertwined. But that is not to say that other English­ speaking countries have the requirements in law that we do. I disagree with you.

MR. BERGMAN: Now that you have both fired your editorial salvos, do you have a question, Dr. Wardell?

DR. WARDELL: Okay. Regarding the sequential review of the IND, how is Commissioner Schmidt so confident that this review will speed things up, when on the record it ought to slow things down?

COMMISSIONER SCHMIDT: Well, I don't know what record you're speaking of. As we look at what happens now, we can see many times when everybody is pretty much at the end of the process and then, and only then, findsdeficiences in the NDA that could have been remedied much earlier in the sequence. I don't know to whom you've been talking, but the people to whom I talk say that agree­ ment in advance of the regulatory requirements, and then a step-wise assessment of the meeting of those require­ ments, would speed the process so that drugs would move more smoothly and more quickly through it. And I think that's true and that we can evaluate it.

DAVID O'NEILL, Center for Naval Analyses: I'm an econo­ mist, and I'd like to ask a question of Dr. Schmidt-not so much as a specialist and not as one in the drug or health area, but as a patient and someone interested in organiza­ tion theory. Suppose that you're dealing with a certain drug and you believe that there is one chance in ten of some adverse

31 effect, so you decide not to let the drug on the market. And let's say all the councils in the National Academy of Sciences agree with you. But let's suppose that out in the general population a large majority of the people would be willing to run a higher risk. What kind of process might help you to change your mind? How would the National Academy of Sciences play a role? How would Dr. Lasagna play a role? The question is asked in the hope of stimulating some insight into this process of forums that Dr. Hubbard has talked about and that we all want to get at.

COMMISSIONER SCHMIDT: Well, our subject tonight is reform of the drug regulatory process. And one of the things that is common to almost everyone's program of reform is some kind of an appeal mechanism from the agency's decision. Many of the bills provide for a drug appeals committee. We have been reading about science courts, which is a very interesting concept. In our draft procedural regulations, we set out the concept of a scien­ tific board of inquiry. To me there is nothing wrong, or bad, about having our decision reviewed in the public arena as long as the review is fair and unbiased. The problem now is that the only things that we do that get reviewed are controversial decisions for drug approvals. You can always find somebody who says that a drug shouldn't have been approved. When we approve one, we are benefiting the industry; and, since it's been con­ ventional wisdom for fifty years that regulatory agencies sell out to those they regulate, we've sold out to the industry. That kind of appeal mechanism is for the birds. But I would not object at all to a sound scientific one that would take into account the people who needed the drug and the druthers of the country.

FRED ZERKLE, Chemical and Engineering News: Senator Nelson, you have held hearings for some years on FDA. Do you foresee enactment any time soon of additional legislation as broad as the 1962 amendments? If so, in what specific areas and when?

32 SENATOR NELSON: Well, we have about thirteen bills pending in Senator Kennedy's health subcommittee of which I am a member. We think we'll move seven, eight, or nine of these, his bills and mine, up to the full committee -in the very near future, I hope. We're dealing with a number of areas. One is the labeling of drugs. I think the confusion in that area to the profession, and to everybody else, of having 700 compounds out in the marketplace under 20,000 brand names is overwhelming. Nobody alive can master it. For example, there are, I think, 75 pred­ nisones in the marketplace under 75 different names. As to the prescribing practice of the physician, I think that the drug ought to be prescribed by the official name, period. That's what a drug is, and that's what it ought to be identified by. Drug companies should not be able to get a patent for seventeen years, as they now can. Then what happens is that everybody prescribes the drug by the brand name for seventeen years, so that the patent in effect is extended by brand-name identification for many, many years beyond seventeen. Meticorten was a good example. It was in the marketplace under the brand name, at $17.98 a hundred to the pharmacist at a time when it was avail­ able to the pharmacist under the generic name for 60 cents a hundred. So that ought to be reformed. In my judgment, we ought to take the testing away from the drug companies. They have a built-in bias. The examples we've collected over the years are multitudinous -including a good one involving the Upjohn Company, which I shan't go into at the moment. So I think we need independent drug testing, and the drug tester should not be under the control of the drug company. It would be better to set up an independent authority, under the FDA, who would then contract the testing out. We've got eight or nine such reform bills, but I've imposed longer in my answer than I should.

MR. BERGMAN: So your answer is that you will have a specific amendment in specific language shortly.

SENATOR NELSON: Oh, we've got thirteen of them all drafted. They have been sitting there for quite some time.

33 MR. BERGMAN: What does it take to break them loose?

SENATOR NELSON: A majority in the committee to start with, that's the political science of it, and then a majority in each house of Congress. And that's hard to get with the drug lobby, which is very powerful-don't you forget it.

COMMISSIONER SCHMIDT: I think that the Senate has already passed a bill-the medical-device bill-that is equivalent in importance to the 1962 drug amendments, and I hope the House will follow suit soon.

SENATOR NELSON: I thank you for the kudos. I intro­ duced that bill in 1969; it took six years to get it through one house.

DR. LASAGNA: In regard to these safety and efficacy studies, you could look on them not as being done under the control of industry, but rather under the control of physicians like Dr. Halberstam and me, who may do studies to support the application. Until I'm convinced that there's more wisdom or probity on the Washington scene than is spread throughout the country, I'd vote for keeping things the way they are.

SENATOR NELSON: I wasn't suggesting that "the Wash­ ington scene" do it. I was suggesting that the FDA contract with Dr. Lasagna, or a research hospital, or any other group, to study a drug that has been proposed by a com­ pany rather than having the company select the researcher and pay for the study.

DR. HALBERSTAM: What is Dr. Schmidt's feeling about that new responsibility? I mean if we just give you the money and the people, is that okay?

COMMISSIONER SCHMIDT: I refuse to answer on the grounds that it's going to get me in a lot of trouble. [Laughter.]

MR. BERGMAN: I think it already has. Next question?

34 HARRY PETERSON, Patient Care: I'm the editor of a controlled-circulation publication going to family physi­ cians, general internists, osteopaths. I would like to know if the panelists consider it feasible that the government, particularly the FDA, relieve the pharmaceutical industry and the physicians of some of the onus for informing the patient of the risks and benefits of drugs. Shouldn't the patient learn from some other source of the risks as well as benefits in drug therapy?

COMMISSIONER SCHMIDT: I would take a cut at that by saying yes. I think we need to do a much better job of explaining risk to everyone-and of pointing out that there is no effective drug that is absolutely safe. For that matter, almost any manipulation of the natural environment en­ tails some risk. But simply explaining the risks and benefits of drug therapy in general won't do the job because there are many different drugs, many different kinds of adverse effects. Often the patient's attention needs to be directed to what might develop in his specific case. I think one needs to be very specific with patients about a particular drug and teach them to recognize its specific side effects. I'm very doubtful that any general educational program can do that job.

DR. LASAGNA: May I tell you what patients would like to have, at least the ones we've talked to? Most of them are dissatisfied with the amount of information they have about drugs, both ethical drugs and over-the-counter drugs. We asked them what would be their preferred major source of information. For ethical drugs it's the physician, and for over-the-counter drugs it's the pharmacist. They give the media a very low rating indeed. Now, they can't say much about the patient-package insert because they haven't had experience with that. So one will have to do some experimentation with the inserts to find out how important a medium that would be.

DR. HALBERSTAM: Mr. Peterson's question was directed to the panel, was .it not? May I comment on it?

35 It might be very nice for the practicing physician if the FDA took all the onus for informing patients because, clearly, in internal medicine, one of the major risks of malpractice-since we internists do not do surgery-is in the area of drug reactions. This is a constant concern of the internist. If each patient got all the information that was required through package inserts, or through the FDA, it might be finein a medical-legal sense with the physician. It might relieve the physician of the legal responsibility of informing the patient, but I don't think it would really be a service to the patient. And probably most physicians would resent it because the information has to be applied individually. The absurdity of such a practice is seen in some of the warnings to patients now carried on drugs: that a particular medication, for example, should not be taken if you are driving a car, should not be taken at the same time as alcohol. Such a prohibition-which is not an official FDA prohibition I should say, but one promulgated by pharmacists-is found with a large number of tran­ quilizers. Well, if people who take tranquilizers did not drive, a quarter of the cars in the United States would be off the streets. The contraindications are not absolute, but when you get them on a piece of paper, they all look equal, and they all look absolute.

DAVID OLSON, IMS America Ltd. : I'm involved in modelling drug-utilization review in the PSRO * program. My question is to Dr. Lasagna and Dr. Halberstam and focuses on two problems. One is how to weigh the danger of approving drugs prematurely against that of creating a drug lag. The other problem involves the tremendous number of drug interactions related to, I believe, the country's inability to perform adequate drug-utilization review. What do you feel is the relative importance of these two problems in terms of extended patient care, length of stay, the patient's safety, and drug efficacy?

* Editor's note: PSROs are Professional Standards Review Organizations, a type of medical review organization intended as a means of controlling costs and maintaining medical standards by having doctors oversee the work of other doctors.

36 DR. LASAGNA: I think the question of drug interactions is a relatively minor one. There are hundreds of drug inter­ actions in the pharmacologic literature, most of which have occurred in animal experimentation with doses that are, I think, unreasonable for humans. I might say, however, in regard to studying what a drug does, that I feel that what goes on after the drug is marketed is where the action is. We are surrealistically trying to predict how a drug will perform, including how it will interact with a lot of other drugs, on the basis of what I might call "hothouse evidence" accumulated by experts under highly controlled conditions prior to market­ ing, by and large. We need to move away from the idea that such a process can predict everything good and bad that a drug can do. We should look at the drug after it's released, when it's used by all the doctors in heterogeneous populations, on patients getting all sorts of drugs. That's when we'll find out whether a drug is being underused, overused, misused, and what the cost-benefit ratio is in the real world.

DR. HALBERSTAM: I agree that drug interactions are a grossly overstated problem. Significant drug interactions are comparatively rare. As to the first problem you men­ tioned, it's hard to balance off the risk involved in early release of drugs against the risk of withholding them. I would like to emphasize here the fact that there's been no lobby-no media interest, no consumer groups that are supposedly interested in patients-pointing out that there are significant drugs that are not available. This is a great failure for a group of people who profess interest in patients. It's interesting that, in the lobbying before Congress about vitamin C and various other vita­ mins, an enormous amount of patient interest was focused on what I consider to be a rather far-out topic and on products of little benefit. But in matters where there could be major benefit, no patient support was generated.

MR. BERGMAN: And the FDA, as far as I am concerned as a newsman, never has done a control test on vitamin C,

37 and never did answer the question of whether it prevents colds.

DR. HUBBARD: The answer to Mr. Olson's question is that the longer the delay in allowing a drug to be marketed, the greater the probability of benefit loss because of its unavailability.

PETER FURTH, student, the University of Rochester: If I understood him correctly, and I don't guarantee I have, Dr. Schmidt said that a drug that might kill ten people but save the lives of-or significantly help-a hundred people would not receive FDA's approval and would not get into the marketplace. I'd like to ask Senator Nelson if this is truly in the public interest. If so, how can you defend it? If not, what are you going to do about it?

COMMISSIONER SCHMIDT: Let me say first that that is not what I said. I said there was no rule by which one could make benefit-risk judgments; there was no simple formula. I said that in the cancer areas, we had already approved drugs that probably had a benefit-risk ratio of the magnitude you mentioned. What I object to are simplistic formulae and approaches like that, approaches that simply don't apply in real life. But I did not say that the drug you describe would not be approved by FDA.

MR. FURTH: Well, then Dr. Schmidt, how do you decide? What criteria do you use, because I don't think the public knows.

SENATOR NELSON: What I understood the underlying statement of the question to be was that if 110 people were to receive this drug, 10 people would die from the side effects and 100 would have their lives saved.

MR. FURTH: Yes, sir.

SENATOR NELSON: What you have then is a physician looking at 110 of his patients and deciding that all of them were in a critical condition; and that he will have to take

38 the risk of a very potent but dangerous drug in an effort to save their lives. If the doctor makes that decision based upon the condition of the patient, knowing that the chances are that IO of them will die from the side effects and 100 will live, I think every doctor would go ahead and prescribe the drug-if that's what the question is.

MR. FURTH: What if you don't know what would happen to the patient, but the rat died? Or the rat got cancer? [Laughter.]

MR. BERGMAN: We have less than a minute left, so let's get one last question from somebody. This lady back here has been dying-

COMMISSIONER SCHMIDT: Of what drug? [Laughter.]

JUNE O'NEILL, Council of Economic Advisers: I wonder whether the same standards are in fact used for approving a drug as for banning a drug or for warning about a drug. It seems to me-as a superficial reader of the papers­ that the standards are really rather weak for casting doubt on a drug. For example, a warning has been given recently about the birth-control pill. The warning was based on a study, published in a British journal, that used fifty women, most of whom smoked. To me, as a statistician, the study did not seem to be overwhelmingly convincing. It seemed to say more about the relationship between smoking and taking the pill than it did about the pill and heart attacks. But I'm sure it has frightened a lot of women.

COMMISSIONER SCHMIDT: A very good question. Cer­ tainly the data needed to approve a drug have to be much more rigorous than the data needed to warrant issuing a warning. You know, a warning is just that-a warning, not a prohibition. We require controlled studies, and a lot of other things, for approval of a drug. We do not require that same kind of proof for a warning. If we did, it really wouldn't be a warning-in the sense that we would be

39 saying that there are some data that show that this might be true. That's what a warning is all about. It means we will inform physicians about these data-which, however, are based on less rigorous research than we would require for approving a drug or taking it off the market.

MRS. O'NEILL: Couldn't there be conditional approval with a warning? Couldn't there be something in between directrejection and full approval?

COMMISSIONER SCHMIDT: Yes. You have touched on something important. I would say to you, read our hear­ ings, read what happens to our controversial proposals to reform drug regulation.

MR. BERGMAN: You've got to be kidding. Read your hearings? [Laughter.]

COMMISSIONER SCHMIDT: Well, I have to sit through them, so let other people read them. [Laughter.]

MR. BERGMAN: I'm sorry but we are out of time. We hope we've brought a little bit of light, as well as some fire, to the issue of reforming drug regulation. Thank you and good night. [Applause.]

40 . \

Design: Pat Tayl(!r ROUND TABLES The Economy and Phase IV ($2.00) John T. Dunlop, Charis E. Walker, Yale Brozen, and Gary L. Seevers Foreign Trade Policy ($2.00) William R. Pearce, Al Ullman, Barber B. Conable, Jr., and Hendrik S. Houthakker The Energy Crisis ($2.00) Part One: Clifford P. Hansen, Morris K. Udall, Mike McCor­ mack, and Charles E. Spahr. Part Two: Jennings Randolph, Mark 0. Hatfield, Dixy Lee Ray, and Philip H. Trezise. Part Three: J. William Fulbright, John N. Nassikas, George W. Ball, and Charles J. DiBona Watergate, Politics, and the Legal Process ($2.00) Part One: Charles S. Hyneman, Richard M. Scammon, Aaron Wildavsky, James Q. Wilson, and Ralph K. Winter, Jr. Part Two: Richard M. Scammon, Harry H. Wellington, James Q. Wilson, and Ralph K. Winter, Jr. Indexing and Inflation ($2.00) Milton Friedman, Charls E. Walker, Robert J. Gordon, and William Fellner Is the Energy Crisis Contrived? ($2.00) Walter F. Mondale, Charles H. Murphy, Jr., Stanley H. Rutten­ berg, and James W. McKie Japanese-American Relations ($1.50) Hubert H. Humphrey, Ted Stevens, Robert S. Ingersoll, and Philip Caldwell Health Insurance: What Should Be the Federal Role? ($2.00) Bill Brock, James C. Corman, Al Ullman, and Caspar Weinberger Is Nuclear Power Safe? ($2.00) Daniel Ford, Craig Hosmer, Ralph E. Lapp, Laurence I. Moss, and Ralph Nader Affirmative Action: The Answer to Discrimination? ($2.00) Owen Fiss, Richard Posner, Vera Glaser, William Raspberry, and Paul Seabury Government Regulation: What Kind of Reform? ($2.00) Hubert H. Humphrey, Ronald Reagan, Hendrik S. Houthakker, and Ralph Nader Offshore Oil: Costs and Benefits ($2.00) Brendan Byrne, Jacques-Yves Cousteau, H. J. Haynes, Royston Hughes Energy Policy: A New War between the States? ($2.00) David Boren, Edward Brooke, Stewart Udall and Frank Zarb Freedom of the Press ($2.50) Floyd Abrams, Edward J. Epstein, William B. Monroe, Jr., Jack Nelson, Kevin P. Phillips, Antonin Scalia, Charles Seib, Clay T. Whitehead, and Ralph K. Winter, Jr. Round Tables are also available in audio-video cassettes. For information contact AEI. Reforming Federal Drug Regulation examines some of the questions that vex the development, testing, and marketing of new drugs in the United States, focusing upon how they relate to the debate about reforming drug regulation. Does the FDA do too little to protect the public from adverse­ or even disastrous-effects of new drugs, or so much that it prevents the timely introduction of drugs that could provide enormous benefits in comparison with their risks? Does it stifle innovation? How do other countries handle the difficult benefit/risk decisions? Can legislation be written to improve the way drug regulation is administered? These questions were considered in a televised AEI Round Table featuring a distinguished panel and a lively question-and-answer session with a well-informed audience. The speakers were Dr. Michael J. Halberstam, practicing physician and writer; Dr. William N. Hubbard, Jr., presi­ dent of the Upjohn Company; Professor Louis Lasagna, chairman of the Department of Pharmacology and Toxi­ cology, the University of Rochester; United States Senator Gaylord Nelson, Democrat from Wisconsin; and Dr. Alex­ ander M. Schmidt, commissioner of the Food and Drug Administration. Jules Bergman, science editor of ABC News, was the moderator. $2([)

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