Enlightened Regulatory Capture: A Literature Review

Lobbyist interference from multi-million dollar pharmaceutical companies has heavily influenced Washington lawmakers’ policymaking. These pharmaceutical companies have their hand in much of the United States lawmaking practice. These powerful corporations stand to make a lot of money from the sale of drug testing supplies and services to the U.S. government. Macdonald reports:

Some challenge that the most efficient regulator is free-market competition among those seeking to attract the buying public. They argue that government regulation is intrusive with the marketplace and works to the disadvantage of both consumers and producers. Advocates of government regulation, however, see a better need to observe and guide the path of competition. They believe that an entirely unrestrained market will unavoidably lead to monopolistic practices, higher costs, underserved segments of society, and lower-quality goods and

Pharmaceutical companies are provided with temporary monopoly rights on the production of new drugs which result in a higher cost on consumers. If competing companies were allowed to produce generic forms of those drugs, consumers will be able to afford those medications even in cases where those consumers have no insurance coverage. The company responsible for developing and inventing the original medication could be offered incentives to invent in the future by either obtaining tax breaks or NIH funding for future research. They could even be offered a percentage of the sales of the generic drugs. Economist Gary S. Becker advocates dropping many FDA requirements that, in his opinion, provide no additional safety measures but rather delay the development of new drugs.[12] Betamethasone, for example, has been part of the standard prenatal care in Europe since the late 1970’s while it got adopted in the U.S. after 1997. On many occasions, the FDA ignores all scientific evidence concerning certain drugs because the manufacturer did not follow their mandated bureaucratic standards.

It is an industry that today is in very close ties with the FDA. The FDA has lost face because it is now to closely linked with big pharmaceutical companies. It is more beneficial and profitable for ‘Big Pharma’ to have more unhealthy people because that would mean more drug sales. Mercola, Joseph, Dr. "Exposing the Truth Behind FDA Approval and Guidance."

They have also attacked patent listings in the Food and Drug Administration “Orange Book” and have alleged monopolization through fraud on the Patent and Trademark Office and sham litigation. Yet other cases have condemned distribution agreements as unlawful exclusive dealing. These government actions have led to substantial private class action litigation against the pharmaceutical industry. The FTC has also challenged numerous mergers and acquisitions in the industry over the last decade. One common feature in all of these cases is the need to define a relevant market. In nonmerger cases, the FTC and private plaintiffsgenerally allege narrow markets, limited to a single drug and its generic equivalent in some cases and to generic drugs excluding the bioequivalent “brand-name” drug in other cases. In its merger challenges, on the other hand, the FTC has alleged markets ranging from those based upon a particular chemical compound, to broader markets based upon various drugs’ manner of interaction or dosage form, to still broader markets of all drugs used to treat a disease or condition. In numerous pharmaceutical merger challenges, the government has included in the market not only currently marketed drugs but also other drugs under development, alleging “innovation markets.”

What is the proper role of the following groups in addressing these dilemmas: National governments, Branded pharmaceutical firms, and Generic manufacturers?

Capture theory is when agency is to act in the public interest but instead acts on the commercial or political concerns of special interest groups that dominate the industry or sector, therefor they are captured for regulation. An industry can benefit from regulation if it can capture the regulatory agency involved. Like government privatization there are advantages like knowing who or what will get affected by it and what needs to change in order for it to work. The regulations that can come from the capture theory can be very beneficial to the business.

In looking into the opioid epidemic, Joe Rannazzisi, the head of the Office of Diversion Control in the DEA, started to notice a trend of distributors shipping large amounts of opioids to midsize to small pharmacies around the country. Based on the alarming consequences of pushing opioids in these communities, Rannazzisi decided to step in and freeze the distribution to these pharmacies. In addition, he decided to investigate them. The DEA has a broad authority to stop opioids being pumped into communities based on an imminent threat to the community. This all changed when lobbyists for the big pharmacies got legislation through Congress that essentially stopped the DEA from freezing the distribution of opioids to these communities. This legislation

Periodically assess the risk of criminal conduct and implement the appropriate steps to design or modify the requirements set forth in the Federal Sentencing Guidelines subsection B2 that refers to the seven elements of an effective ethics compliance program which are:

Numerous independent agencies can impose restrictions on prices, entry into markets, disclosures or contract terms. Yet agencies often conduct little or no economic analysis to identify the need for, or effects of, restrictions before they're adopted. So agencies can impose massive mandates

Health care regulations have developed in a lagging fashion throughout the history of the United States health care system. The regulations governing health care are a set of prescriptive rules that have cause the health care system to adjust and improve the quality of care provided to patients. Brennan and Berwick state, “functions for regulation aims at increasing equality in society. In health care, this sort of regulation typically involves efforts to increase access to health care.”2 These regulations have a had far-reaching effect on the safety, efficacy, cost, information, availability of medications. If a society does not have access to unadulterated medications, correctly labeled medications, and truthful information then there

This also means that our political leaders that should be concerned about the effects of regulation. In my opinion, there advantages and disadvantages to regulation. The advantages are the Government should be regulating certain things to make life safer and to make America stronger, and better place to live. The disadvantages are, the government should be regulating with more common sense. What I'm saying is the government should consider the costs and the benefits of what they're regulating. Unfortunately, if the Government does not, Americans run the risk of some kind of regulation that can't be explained by anyone except a bunch of lawyers which is going to cost the taxpayers more

The Food and Drug Administration dates back to the late 1840s, though it did not adopt that name until 1930. The first act if the FDA as it is known today was officially established in 1906 with the passage of its first piece of legislature. was the passage of the 1906 pure food and drug act, which prohibited the interstate commerce of misbranded food and drugs, and thus establish the FDA . It was established by the government, and thus inherited sits bureaucratic structure. ome of its flaws . Furthermore , the FDA was established as a council to regulate agricultural products through chemical analysis, and thus its structure is incredibly flawed

Consequently, any activity that is likely harmful to others and requires certain proclaimed capability for its safe effectiveness, it is in theory beneficial that we monitor, regardless if it were to trouble a single person. For example, refusing someone a driver's license in our society would inconvenience that person terribly by prohibiting them from working, shopping, or visiting in places only obtainable by car.

Even though the pharmaceutical industry has made great improvements to human health and quality of life, like creating drugs for the treatment of AIDS, cancer, and other diseases, an increasing tension is growing between the public and the industry. These thoughts are fueled by issues such as drug pricing, affordable health care, and the battle against epidemic diseases in third world countries; social critics wonder whether this multi-billion dollar industry is giving enough back to the community and fulfilling its social responsibility.