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Why Does the FDA Get Nearly Half Its Funding From the Companies It Regulates?

Thanks to user fees drug companies pay the FDA, the number and speed of drug approvals have been increasing over time — so have the number of drugs that end up having serious safety issues.

The Food and Drug Administration (FDA) has moved from an entirely taxpayer-funded entity to one increasingly funded by user fees paid by manufacturers that are being regulated. Today, close to 45% of its budget comes from these user fees that companies pay when they apply for approval of a medical device or drug.

As a pharmacist and medication and dietary supplement safety researcher, I understand the vital role that the FDA plays in ensuring the safety of medications and medical devices.

But I, along with many others, now wonder: Was this move a clever win-win for the manufacturers and the public, or did it place patient safety second to corporate profitability?

It is critical that the U.S. public understand the positive and negative ramifications so the nation can strike the right balance.

The FDA blocks Thalidomide

Americans in the early 20th century were outraged when they found out that manufacturers used poor-quality methods for producing food and medication, and used unsafe, ineffective and undisclosed addictive ingredients in medications. The resulting Food, Drug and Cosmetic Act of 1938 gave the taxpayer-funded FDA new authority to protect the U.S. consumer.

One of the FDA’s most shining successes occurred in the late 1950s when the agency refused to approve thalidomide. By 1960, 46 countries allowed pregnant women to use thalidomide to treat morning sickness, but the FDA refused on the grounds that the studies were insufficient to demonstrate safety. Debilitating birth defects resulting from thalidomide arose in Europe and elsewhere in 1961. President John F. Kennedy heralded the FDA in 1962 for its stance. An FDA driven by the data — and not corporate pressure — prevented a major tragedy.