A reader (thanks Jen) alerted me to this article on Forbes, The FDA's Black Box. The basics of the article are that the FDA can't say anything about drug approvals or non-approvals (or anything else relating to a drug for that matter) if it deals with information that the drug company submitted, since that information is confidential by law. The article thinks Congress should give FDA the ability to release this to the public. Here's why Forbes thinks this is a good idea:
1) Companies fool Wall Street all the time into thinking a drug is the next best thing only to find out all of a sudden that FDA's final decision is 'no go'. Investors lose a lot of spondulic* this way.
2) They just should.
It's interesting that the article really says nothing about whether the decisions were bad or good. In fact, of the decisions, it puts the FDA in a pretty good light. That said here's why I disagree with the article:
1) The FDA is in the business of ensuring safe and effective drugs, not in the business of business. I'm sure the FDA is really sorry the striped-suit boys have no flow*, but it probably cares more about patients getting a drug that works with acceptable risk-benefit.
2) Here's the biggie: Shouldn't investors be informed about what they're investing in? Here's the issue that's a non-issue from the article:
"One thing I've said now for several years is, if a company is telling you about the letter, I would ask to see the letter, because that's the only way to know what the FDA said," says John Jenkins, director of the FDA's Office of New Drugs.
But in recent months, the FDA sent out "not approvable" letters for an anesthetic from Japanese drug maker Eisai, an antipsychotic from tiny biotech Vanda Pharmaceuticals (nasdaq: VNDA - news - people ) and a pain drug from UCB Pharmaceuticals. In none of those cases did the company make the full text of the letter available.
Well, let's see here, the FDA sends out a letter to the company. You, as an investor, don't know what's in it. The company refuses to show you but tells you everything's great. You can:
a) Use good judgement and put your money else.
b) Believe the company and then be stunned when your investment dies.
Companies are BSing all the time to keep their stock up. If they didn't, we wouldn't have any of these stories which leads me to...
3) The government isn't where the pressure should be. If industry is being sneaky (read: lying), doesn't it make sense to use moolah as a weapon? Demand transparency by allocating your investments to those who provide it, don't come crying to the FDA. They hide stuff because Wall Street lets 'em get away with it. What we need here is not more things for government to do, we need Wall Street to stop acting like such dopes.
Weekly Aural Pleasure
In honor of the Olympics, I'm choosing 'Harder, Better, Faster, Stronger' ("Faster, Higer, Stronger" is the Olympic moto). I had a hard time picking the video to embed but since this one takes a lot of amature talent, I figured it a better choice over the official anime version.
*Have any great slang for money? Other favorites: oomph, scratch, green, happy cabbage, bucks, sawbuck ($10), coin, bread, dough, chips (I'm getting hungry here), large (as in $1K).
+1, fully agreed.
* moolah, ducats, fin ($5), grand ($1000), capital, two bits (25 cents), wherewithal, funds, fundage, means.
My fav money slang is "Benjamin" for $100, but $100 is prolly not an appropriate scale for the kind of "flow" you are talking about.
simoleons: It took about a zillion of them to make Who Framed Roger Rabbit. Frequently the currency of my hero, Bugs Bunny.
Cake, loot, greenbacks.
Angry T - Haven't you been paying attention? The purpose of government is absolutely to protect the "striped-suit boys," even if their speculation drives up the prices of everything for the rest of us suckers.
The Flintstones used Clams.
I remember a very long time ago when Genentec was working to get it's clot busting drug approved back in the eighties. Their stock rose in anticipation of final FDA approval, and then crashed when the FDA told them to go back and do more studies. Then next day the Wall Street Journals editorial page was full of bile, screaming that the FDA was costing people there lives. When really the FDA by doing it's job probably saved a bunch of lives, and inadvertently cost the editors of the Journal a bunch of cash.
Turns out though, that clot busting drugs seem like a good idea, but as a friend says, they are a knife that is extremely sharp on both sides. You don't use them unless you are very very sure because of the risks. So the market is really much smaller than people thought. In the end for heart attack patients mechanically removing clots is much more effective and a lot safer.