The current drug approval process is slow and costly. Moreover,
the disclosure of confidential data to national regulators, and the
subsequent use of this data to support regulatory approvals by
competitors, diminishes the incentive to innovate. As a result,
many potentially life-saving medicines are not developed and the
delivery of many more is unnecessarily delayed.
Activists complain that too few drugs are developed and the prices charged
for medicines excessive. Governments have typically used a heavy-handed
approach to such complaints, employing a combination of price controls
on medicines and public subsidies to drug development. However, these
policies do not address the underlying problem – indeed, they tend to
exacerbate it.
One solution to address part of the underlying problem would be to
enhance competition in the regulation of pharmaceuticals. The authors
argue that ideally this would happen through the privatization of existing
regulators, and open competition between private certification boards.
Such privatised regulators would set the standards of regulation at levels
demanded by those making choices about drug regimens. For many drugs,
this would mean swifter approvals and a reduction in development costs,
leading to an increase in the number of drugs developed for most diseases
– especially those which affect the poorest and those which affect smaller
populations – while also reducing the price of medicines to all.
In addition, under a privatised regulatory system it is likely that different
certification boards would target different groups. For example, some
might focus on the implications of drugs for specific populations, such
as the elderly or children, while others might focus more on long-term
effects. As a result, doctors and consumers would be able to make more
informed choices about drug regimens.