There is one other important difference between drugs (as currently regulated) and supplements: insurance doesn’t pay for supplements. Insurance companies today frequently refuse to pay for drugs they claim are ineffective or unnecessary. While they typically rely on FDA recommendations, privately controlled pharmacy benefit managers set criteria which can differ from the FDA’s. Insurance companies have an incentive to find reasons to refuse to pay for some, but not all, drugs, and deciding based on whether the drug is actually useful is a Schelling point. Big insurers and PBMs could conceivably afford to test new drugs, if sufficiently motivated.[1] To be sure, there are numerous opportunities for companies to profit by lying, colluding, and making decisions that are less than medically sound, but the market is still far from unregulated even without the FDA.
This isn’t to say unscrupulous drugmakers won’t market useless or dangerous products directly to consumers—of course they will. Nothing stops a manufacturer from releasing completely untested drugs onto the market and then waiting for someone else to study them. Any controls would have to move farther up the food chain. A big pharmaceutical company that doesn’t want to get its hands dirty could buy the rights to a new drug once it starts to gain acceptance.
Assuming drugs cannot be evaluated by some other reputable group. In the event the FDA is abolished, I expect regulatory requirements for drug approval would persist in other countries, and any interested party could benefit from the information, so most insurance companies likely would not do their own testing.
I think there are arguments you can make a system without the FDA would still work. This particular post however additionally makes predictions about how the resulting system would look like that I find unlikely.
There is one other important difference between drugs (as currently regulated) and supplements: insurance doesn’t pay for supplements. Insurance companies today frequently refuse to pay for drugs they claim are ineffective or unnecessary. While they typically rely on FDA recommendations, privately controlled pharmacy benefit managers set criteria which can differ from the FDA’s. Insurance companies have an incentive to find reasons to refuse to pay for some, but not all, drugs, and deciding based on whether the drug is actually useful is a Schelling point. Big insurers and PBMs could conceivably afford to test new drugs, if sufficiently motivated.[1] To be sure, there are numerous opportunities for companies to profit by lying, colluding, and making decisions that are less than medically sound, but the market is still far from unregulated even without the FDA.
This isn’t to say unscrupulous drugmakers won’t market useless or dangerous products directly to consumers—of course they will. Nothing stops a manufacturer from releasing completely untested drugs onto the market and then waiting for someone else to study them. Any controls would have to move farther up the food chain. A big pharmaceutical company that doesn’t want to get its hands dirty could buy the rights to a new drug once it starts to gain acceptance.
Assuming drugs cannot be evaluated by some other reputable group. In the event the FDA is abolished, I expect regulatory requirements for drug approval would persist in other countries, and any interested party could benefit from the information, so most insurance companies likely would not do their own testing.
I think there are arguments you can make a system without the FDA would still work. This particular post however additionally makes predictions about how the resulting system would look like that I find unlikely.