Big Data and Pharmacovigilance, Part II

By Dov Fox

Yesterday, I wrote about Ryan Abbott‘s new article that proposes to use health information exchanges to improve the collection of data about the safety of approved drugs. Today, I want to address his recommendation that the government pay private parties to help the Food and Drug Administration conduct post-market drug surveillance.

The article argues that health information exchanges will make far more data available for observational research, but the current drug regulatory system is not structured in a way that would allow it to use the information effectively. This is because pharmaceutical companies have powerful incentives to emphasize data favorable to their products. (The FDA’s own research is dwarfed by comparison to what industry does and could do, while insurance companies and academics have weaker incentives to investigate.)

So Abbott suggests encouraging private parties to submit evidence that an approved drug is ineffective or unsafe. Under his proposal, if the FDA determines the evidence warrants a change to labeling or approval status, the submitting party would receive a financial prize. Its size would depend on how much the government saved by avoiding the costs of ineffective and unsafe medicines. Abbott suggests that the prize come from taxpayer dollars, unless it’s determined that the pharmaceutical acted negligently (or worse), in which case the company itself would be responsible for paying it.

It might make more sense to put the burden on pharmaceutical companies, even when they haven’t been negligent, given that it’s their products that are found to cause harm. Not only do they have the most opportunities to seek out problems early in testing and development; they are also the parties deriving the most financial benefit from medicine sales. Claims by pharmaceutical companies that they can’t operate with additional costs or regulation sound exaggerated, at least for many of those companies, given that the pharmaceutical industry has some of the highest profit margins of any business sector.

The bounty system nevertheless deserves serious consideration as an innovative proposal for harnessing market-based incentives to improve the regulatory surveillance of approved drugs. And it need not be restricted to health information exchanges. Abbott suggests applying this system to the way agencies deal with scientific questions generally. We might worry competitors might trump up data hostile to approved drugs. The provocative question that Abbott’s article invites us to ask is whether we are better off evaluating medicines under an inquisitorial system or an adversarial system.

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This entry was posted in FDA, Health Care Finance, Health Care Reform, Health Information Technology, Medical Quality, Medical Safety, Ryan Abbott and tagged , by Dov Fox. Bookmark the permalink.

About Dov Fox

Dov Fox is Professor of Law and founding Faculty Director of the Center for Health Law Policy and Bioethics at the University of San Diego School of Law. He has published dozens of articles in leading journals of law and medical ethics, most recently “Reproductive Negligence” in 117 Columbia Law Review 149 (2017). His current book project, Birth Rights and Wrongs, is under contract with Oxford University Press. His work has been featured in CNN, ABC, NPR, BBC, Reuter’s, Bloomberg, the Boston Globe, and the Washington Post. Fox is a regular columnist for The Huffington Post and contributor to the Bill of Health blog. He also serves on the advisory boards of the American Constitution Society and Appellate Defenders, the non-profit law firm that administers all appointed counsel for indigent defendants in California's Fourth Appellate District. Prior to teaching, Fox served as a law clerk to the Honorable Stephen Reinhardt of the U.S. Court of Appeals for the Ninth Circuit. He has also worked at the law firm of Wachtell, Lipton, Rosen & Katz; the consulting firm of McKinsey & Company; and the Civil Appellate Staff at the U.S. Department of Justice. Fox was awarded a Rhodes Scholarship to attend Oxford University, where he earned his DPhil and then received a Soros Fellowship for New Americans to attend Yale Law School, where he served as projects editor for the Yale Law Journal and all three years was awarded the prize for best student paper in law and the sciences.