Between a new law aimed at springboarding treatments and a new administration promising to steamroll regulations, the federal government seems primed to approve more prescription drugs — and to do so faster. But one unintended consequence could be a waste of taxpayer dollars.
Whether the Food and Drug Administration should hasten drug approvals is a matter of vigorous debate from a scientific and safety standpoint. But many critics of that approach also make another argument that has been largely overlooked: More drug approvals could mean more unnecessary public spending.
Generally, Medicaid and Medicare cover most, and in some cases all, FDA-approved drugs. If the FDA clears drugs that turn out not to be effective, millions of taxpayer dollars could be spent on fancy, and potentially pricey, placebos.
Rachel Sachs, an associate law professor at Washington University in St. Louis who tracks drug industry issues, said the FDA makes “mistakes,” approving drugs that later turn out to be unsafe or ineffective. She said those mistakes could only become more common as a result of the 21st Century Cures Act, the law President Obama signed last month that gives the FDA discretion to approve an existing drugs for new uses based on “real world evidence.”