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FDA is the Food and Drug Administration. While I'm not against administration, if you look at what they do, and what it costs to do it, the rational and economic minded, understand that it could be done cheaper and better, if there was more accountability and less bureaucracy. It's not always how much you spend, but how well you spend it.
Issue Lie Truth
FDA The FDA is this great and noble institution that protects our food and drugs from anarchy, quackery and food poisoning While the excuse is not in dispute, the reality (lie of omission) is whether it does a good job at any of those things, and whether it is worth the costs compared to the better alternatives.

I'm not someone who thinks the government is all bad, nor is it all good either. Controlling something through government is just a way to replace a commerce based process (free market), with a political process, and increase bureaucracy. Bureaucracy is not all bad either; just a series of rules, processes, hierarchies that slow down progress (red-tape), but increases visibility, accountability and order. Most of the time, these things cost more than they help, the help is visible and the costs are buried, and the accountability gets buried. But in all things there are balances, and they're usually not completely on one extreme or the other.


A relatively unknown and failing author and Socialist by the name of Upton Sinclair wanted to write a political propaganda book, so he went under cover in 1904 in Chicago meat packing plants, and by 1906 he completed his semi-fictional hit piece called, "The Jungle". Teddy Roosevelt had immediately put a team of government inspectors on it, and they concluded in the Neill-Reynolds Report that the book was, "intentionally misleading and false", "willful and deliberate misrepresentations of fact", and "utter absurdity". Now it was the Progressive era, so the truth doesn't matter as much as the opportunity to regulate, so Teddy suppressed the release of the report to the public and used the book (by an author he had dismissed as a "crackpot"), as an excuse to create more federal government (the Pure Food and Drug Act, and the Meat Inspection Act), which later became the FDA. While the book and its ideas were completely debunked at the time, it's still taught in schools (Marxist re-education camp) today.

This was the start of what we called crony capitalism and the explosion of corruption: once the fed had control over things like this, you could pay-off the correct politicians to get past inspections, or guarantee your competition did not, which resulted in consolidation (reduced competition, and higher prices).

We created a federal bureaucracy, under a false premise, to promote crony capitalism. The results are that there's few benefits for the FDA to be efficient, and a lot of risks. They don't get held accountable for blocking or delaying drugs, only for drugs that might have some extremely rare tertiary consequences in a small fraction of the people taking them. So they cause many to suffer (or possibly die), to protect the 1% from something unlikely, because that's what's politically expedient.

Thus, the system is a net loss. It is the TSA of Food and Drug protection. I developed medical instruments for 6 years full time (about 9 years total with consulting gigs). While I was more in the instrumentation side than the drug side, I saw many cases where they were costing us lives, patient risks, and hurting at least as much as helping. So while the FDA saves a few lives, it costs many more.

That's before looking at the opportunity costs of capital. Figure it's 10x more expensive to develop a drug in the U.S. because of the FDA (that's conservative). Now figure out how many more drugs/treatments/services would be developed, how much more competition we'd have (and thus lower margins), and all the life savings procedures because of those things keeping us safe. (Not to mention all the corruption, abuse, and false senses of security that didn't materialize), because of the FDA. That's economics.


Look, we all know the good the FDA does. It focuses on Food and Drugs. Trying to reduce bad foods that can make people sick, and reduce quackery, medicine men and snake oil salesmen from selling false cures. But again, the key to both is accountability and balances.

There's no doubt that a bureaucracy can get out of control and create more waste/harm than it helps. If you don't believe that, then stop reading now, go away, and read some far left ThinkProgress or DailyWorker delusion, because my articles will only annoy you (and vice versa). So to me, the question isn't whether bureaucracies aren't occasionally out of balance -- it's whether this one is, and how can we get it more in balance?

Here's some facts:

The FDA's budget has gone from:

  • $1.5M in 1930 (when created) to >$5B today - inflation adjusted it would be $15.14M
  • $1B in 2000, to >$5B today - inflation adjusted would only be $1.468 Billion.

The FDA's headcount has gone from:

  • <400 in 1930 (when created) to >17,468 today - inflation adjusted it would be ≈5654
  • ≈7,700 in 2000 to >17,468 today - inflation adjusted it would be ≈11,319

So FDA growth has far exceeded inflation. Is it really doing 333x as much as it was in 1930, or >3x as much as in 2000? If it isn't, then the budget is not in line with output/expectations. And if it is, that's a testament to scope creep -- it was certainly never promised when created that it would become this big a behemoth. [1]


There is this leftist fallacy that, "If we don't continue this disastrous failing program, why then you want NOTHING? OMG! Anarchy? Dog's and Cat's living together? Oh the humanity". Of course that's stupid. (No offense). Because:
  • (a) even if it was true, it wouldn't make this failing system any better
  • (b) it's not true, there's lots of ways to solve a problem, we picked the worst way (a socialist/centralized/politicized boondoggle).
  • (c) even if I wanted to eliminate it, you need to look at what would happen -- companies would figure out ways to secure their own quality to the public. Have you ever heard of the UL (Underwriters Laboratory) to guarantee electronic goods safety? ICANN for managing Internet Addresses? The IIHS (Insurance Institute for Highway Safety) that does you car safety ratings? Oh yeah, they're private / not-for-profit organization. Without government, corporations create these things anyways (and better), because consumer confidence helps sales.

So the false choice is:

  • (a) the government does it
  • (b) nobody does it

The real world choice is:

  • (a) the government does it poorly, for more costs, wastes and bureaucracy and based on politics
  • (b) the private sector would do it, only for less costs and more value, and improve over time more than the politically driven government solution


So while the FDA's budget for inspections has gone up astronomically, how has their results? How many things are they catching and preventing, and how many are getting through their process? That's how they should be rated.

It appears to be a little less than 1 recall per day[2]. And many of those recalls look pretty unnecessary, "process might lead to potential contamination that could result in X". Or "May contain egg", "Undeclared peanut and tree nuts", or birdfeed that may contain "Excessive sodium", or the label may not have listed nuts, etc.

Look, I don't know about you, but I'm not that worried about birds with heart disease, and civil liability of poisoning someone with a nut allergy means the companies are going to recall such things without the FDA. And if you dive deeper, you find the gross majority of recalls are the COMPANY doing the recall. It wasn't the FDA that caught it, they were just the mechanism the companies used to report their own recalls. It didn't sound like the FDA caught anything. And when you read the Press Releases, they say "no reported cases of reaction" -- so there was no impact.

So do the math on that, $5B / 365 recalls means $13.7M/recall, with the gross majority of them being completely unnecessary and having caused no harm. Now that's not completely fair, since the FDA does do other things. But the ROI on this agency for this function is pretty f'in poor.


Let's start from the top: the economics. How much does the FDA cost us in dollars and delays, versus how much benefit do they give us from protecting us from bad drugs/treatments? To know the answer to the cost/benefit of delay and overhead, we need to know both sides costs.

  1. By the time drugs get to phase II and phase III clinical trials, they've already passed a few other screenings. Only about 25% fail at this point, but 100% are delayed many years by the FDA [3]
  2. On average, it now takes $802 million, including the cost of capital, to come up with a new pharmaceutical product.[4] Companies don't eat those costs, they pass them on to consumers.
  3. With the cost of drugs going up, people turn to alternatives (other nations where they're cheaper) or alternatives which may not be effective, but are affordable.
  • "From 1990 to 1997, the use of herbal remedies increased 380 percent," reports Carol L. Norred, C.R.N.A., in a study published in the February 2000 Journal of the American Association of Nurse Anesthetists . She adds that data from 1998 indicate that about 37 percent of Americans used herbs during the previous year, spending more than $3.87 billion for these food supplements.

So the FDA drives down negatives (bad drugs), but they drive down the use of good drugs too. They drive people to worse drugs, or alternatives. Even if all the 25% were valid and only caught through the FDA process, we'd be losing at least 3x as many people as we're saving. And probably 95% of that 25% would be caught through far simpler and far quicker systems (and a few are blocked on false positives that would have helped many).

In math terms, that means about 98.75% of the drugs are falsely blocked/delayed (by about 4 years), for a 1.25% capture rate of bad drugs. That doesn't seem like a net win to me. Now figure out how many people are dying or suffering because of inaccessibility of those 98.75% drugs, versus the very few (1.25%) that are protected by the capture rate. Those are some pretty gruesome numbers to me.

Remember the false positive rate (estimated to be about 10%) prevents 8x as many good drugs from coming on market as it prevents bad drugs from coming on market.


There's always alternatives. For example, if instead of creating a slow government bureaucracy, that hides the cost/benefit and offers no real value to companies, and no consequences for false positives, image the alternative. In a free'er market, we setup a privately run UL (Underwriters Laboratory) that oversaw testing procedures, in exchange for limiting liability for those that passed? We could balanced incentives between quality/liability, and actual approvals and limiting false positives -- all without a government bureaucracy being a burden on taxpayers, but only the drug companies would pay the costs.


Here's a few articles related to the FDA:6 items

Suffocating Liberty - the cost of red tape -
Each new tax, law or regulation, comes with costs (compliance, non-compliance, enforcement and punishment). We 174,545 pages of regulations with over 1,040,940 restrictions. Our tax code has over 73,954 pages. Our federal legal code has over 23,000 pages and over 4,450 federal crimes (in 2008). Double that for statutes, case law, and regulatory provisions. Then there’s another 300,000 criminal punishments within the discretion of administrative agencies. Then you have to add in the state and local laws, regulations and taxes on top.
Progressives gave us - You often hear advocates claiming, "if it wasn't for progressives, you wouldn't have X...", then they explain without progressives, we wouldn't have roads, schools, police, fireman, military, or some other thing we had for decades or centuries before progressives. But I wanted to compile the other side of the equation (the balances). Here's a reminder of what they gave us that wasn't so great, or started off fine but entropied into something bad, so people can decide if jumping on every new big-government bandwagon is a good idea… or if a little prudence, caution and research is warranted before gobbling up the bandwagon fallacy and putting on that Che Guevara T-Shirt.

The short list of losers would include the following:

  • Financial servitude: centralized banking/money (the Fed), fiat currency backed by debt (and the inflation that results in), they gave us the 16th amendment, the IRS, the worst tax code in the free world (73,954 pages), they fought for every tax increase and against all relief or simplification (to fund themselves), and then they piled on 174,545 pages of regulations (over 1,040,940 restrictions spread among them) in our regulatory code, and that’s not touching the 23,000 pages in our federal legal code (and over 300,000 criminal punishments burried within the discretion of administrative agencies).
  • Bigotry: centralized education with the admitted intent of reprogramming the youth (against their immigrant/catholic parents), they were champions of racism (and still are in affirmative action), supported eugenics, created our anti-immigration quotas and policies as a favor to unions (then call anyone that wants to enforce those laws a xenophobe), FDR blocked all immigration for a while, interned even 2nd generation Japanese, Germans and Italians,
  • General Statism: they replaced the constitution with federalism (jurisprudence and precedence over original intent), invented supreme court stacking and judicial activism, they gave us the 17th amendment (popular vote senate which broke the constitution and states rights completely), they gave government the power to take our property (eminent domain, national parks/federal lands), and to control what we can do on our land (via the EPA and other agencies)
  • Too big to fail: they have always been in bed with big business (like organized labor) and created the biggest cartels and trusts in the nation (utilities, unions, federal reserve, banking, Fanny/Freddy, tort lawyers, AMA, and so on),
  • Enemies of liberty: they gave us Prohibition and the post-prohibition drug war, they granted the Fed it's own unconstitutional police forces (FBI, NSA, DEA, OSS/CIA, IRS), centralized transportation (like Amtrak), used centralized road as a way to force things on the states that were unconstitutional (like the 55MPH speed limit, forced raised the drinking age, and so on), then they complain that our federally mandated highways and bridges are crumbling (the agencies they created, failing to do their charter), they invented the anti-liberty regulatory state: the FDA was created so they could control what we put in our own bodies, the FCC and fairness doctrine were created to control our free speech (so FDR could bully any TV/Radio stations that did unfavorable pieces on the administration or it’s policies), they gave us FISA warrants and invented domestic spying (look at Espionage and Sedition Acts of the 1917-1918 and how they empowered government to read our mail, listen on phone calls, and how they undermined free speech), they created American imperialism (and got us into the Civil War, Spanish American War, WWI, WWII, Kosovo, Bosnia, Vietnam, and Central/South America), they gave us conscription/draft, they took away our guns for our own good, invented the poverty industrial complex (which is over 2/3rds of our budget and 9/10ths of our future liabilities), they made it harder to save for our retirement and replaced it with a youth-tax ponzi scam calls Social Security, then they raided the Social Security Trust fund and left IOU’s in their place (for our kids to pay for our debts/sins), they invented congressional appointed agencies to give congress plausible deniability and more opacity in government, and most of all, they won’t accept responsibility for any of it. It’s all the Republicans fault.

Licensing and Regulation - These are where Government takes your rights away.... and then will sell (lease) your liberty back to you, if you follow their rules. The left created agencies like the FCC or FDA to do exactly that. FDR took licenses away from his political opponents, and then created the “fairness doctrine” to punish those who weren't pro-administration enough. The FDA has been used to go after political opponents as well. You can't empower government, without empowering corruption.
FDR: Agencies -
FDR modeled his business recovery on what the Fascists of Europe had been doing: making many agencies to socialize, control and centralize industries, business and workers (National Syndicalism). Most of his programs were later declared flops (and abolished), replaced, or ruled unconstitutional. Well over a hundred new bureau's and agencies unconstitutionally burdening the nation and bankrupting investments. (Remember, Article One, Section 1 of the United States Constitution says, "Congress cannot delegate its power to anyone else", like creating an agency to do what congress should). FDR used that power abusively. By controlling the agencies, he could make people or sectors dependent on him and the government. And he used those powers to bully the opposition, and reward allies. The rule of law and constitution was for academics and he was a man of action. And the the consequences of the New Deal is something we're still paying for today: politically, socially and economically.
2018.04.05 Milk isn't Milk - Government Regulations are when the government tells you what to do, then charges you for doing it. Certainly not all of it is bad... but we must also recognize that it's not all good or helpful either. The following video is definitely not helpful (and where government has run amok). This is where a farmer must mislabel his Skim Milk products as artificial, because he didn't add the artificial ingredients (vitamins and nutrients) that the government demands. So real milk is labelled as artificial, and artificial milk is labelled as natural. Thanks FDA, what would we do without you?
2014.06.06 No more cheese boards - For hundreds or thousands of years, people aged cheese in basements, often on wooden boards. The FDA recently decided that this is too dangerous, despite many award winning artisan cheeses being done this way, and no reported cases of a problem. Even the hyper-regulatory Canadians are scratching their heads as they never saw this as an opportunity/problem. Without government who would protect you from liberty and non-problems like this? (NOTE: The FDA got enough back-pressure and public exposure, that they backed down. But there are plenty of cases that didn't get this kind of backlash, so they did not. And the problem is that they tried).


The FDA's been a boondoggle, but mere math, logic, economics, history, will never convince anyone that wants to believe otherwise. The same way some people think the TSA keeps them safe. It might keep them slightly safer than nothing, but far less safe than a more reasonable/competently designed alternative.

I'm not someone who thinks the government is all bad or is all good. Nor is the FDA. Controlling something through government is just a political process that increases bureaucracy: a series of rules, processes, hierarchies that slow down progress (red-tape), but increase potential accountability and order. Good or bad, is a balance between the needs of the problem and cost of the solution: did you get the implementation right? If it could be done with industry cooperative and private licensing organization, at a small fraction the size, with more accountability. Wouldn't that be better? If someone can't ask that question sincerely, then they're not up for a discussion on public policy, and are incapable of understanding how to avoid the moral hazard in the future. So I point out the abuses, to understand what we've been lied about, and what we might want to watch for in the future -- and to think about those real economic and societal balances. And how we can make real progress towards more beneficial to society, instead of "progress" (progressive) just meaning bigger government with less individual liberty and government accountability.


📚 References

Here's some articles if you want to learn about the topic: