Carpenter, Daniel --- "Reputation, Information and Confidence: The Political Economy of Pharmaceutical Regulation" [2010] ELECD 319; in Farber, A. Daniel; O’Connell, Joseph Anne (eds), "Research Handbook on Public Choice and Public Law" (Edward Elgar Publishing, 2010)

Book Title: Research Handbook on Public Choice and Public Law

Editor(s): Farber, A. Daniel; O’Connell, Joseph Anne

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847206749

Section: Chapter 12

Section Title: Reputation, Information and Confidence: The Political Economy of Pharmaceutical Regulation

Author(s): Carpenter, Daniel

Number of pages: 20

Extract:

12 Reputation, information and confidence:
the political economy of pharmaceutical
regulation
Daniel Carpenter1


The basic structure of pharmaceutical regulation differs in several crucial respects from
the governance of other goods and other economies. The most salient contextual distinc-
tion concerns the pervasive uncertainty that governs pharmaceuticals ­ neither produc-
ers nor consumers nor regulators can be said to know with plausible certainty the quality
or hazards of a drug product. The fundamental dynamic is far more than asymmetric
information; it is also that no participant in the game of pharmaceutical regulation can
be said to know the true quality of any drug. The most salient institutional distinction
rests in gatekeeping: the necessity of governmental pre-market review for new prod-
ucts, where any approval is based in part upon an experimental (non-market) history
of the product. This gatekeeping feature of pharmaceutical regulation is adopted by
nation states and regional federations around the globe, and this fact gestures less to the
pure optimality of these arrangements than to the symbolic centrality of the American
example (Carpenter 2010, chapter 11). In the United States, the gatekeeping role is
played by the US Food and Drug Administration (FDA), a storied organization that
exercises significant administrative discretion and has deeply shaped the laws and regu-
lations by which it has been given regulatory authority (Marks 1997; Carpenter 2001,
2010; Carpenter and Sin 2007).
The emergence of gatekeeping power at the FDA is one of the most compelling nar-
ratives in American public law over ...