Supreme Court Amicus Brief Regarding Wyeth v. Diana Levine

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Summary of Argument

Prominent in arguments opposing preemption of state tort law liability for alleged inadequacies in prescription drug labeling is the argument that such liability can complement FDA regulation by improving on a regulatory scheme that fails to provide adequate deterrence against the marketing of unsafe or inadequately labeled drugs. The premise of this argument is faulty. Fundamental principles of economics and numerous studies of FDA drug regulation reveal that FDA in fact errs on the side of overregulation of prescription drugs. Product liability litigation focused solely on one side of the prescription drug public health equation leads to further distortions of the drug approval and labeling process and exacerbates FDA's inherent overly cautious approach. Preemption of state tort law where it conflicts with FDA requirements will minimize these distortions and thereby maximize public health.

FDA's incentive to overregulate is clear upon examination of the underlying forces that can skew its regulatory decisionmaking. In particular, FDA faces substantial criticism when it mistakenly approves drugs that should not have been approved ("Type I errors"), but considerably less criticism when it fails to approve drugs that should have been approved ("Type II errors"). As a result, FDA has an incentive to be overly cautious in approving new drugs, even though the failure to approve a beneficial drug can lead to more significant public health harms than mistaken approval of potentially dangerous drugs. The same FDA tendency toward over-caution (Type II errors) carries over to regulation of the drug label, where FDA has an incentive toward overwarning and undue contraindications. Such excessive warning language also has adverse public health consequences.

State tort lawsuits exacerbate the problems of FDA's overly cautious approach by imposing additional requirements on pharmaceutical companies to add new warnings or contraindications. These requirements lead to a host of distortions in drug marketing and availability that have adverse consequences for public health and wellbeing. Preemption provides an important safeguard against expected FDA Type II errors by countering the exacerbating impact of state tort lawsuits for failure to warn. . . .

About the Author

 

John E.
Calfee
  • Economist John E. Calfee (1941-2011) studied the pharmaceutical industry and the Food and Drug Administration (FDA), along with the economics of tobacco, tort liability, and patents. He previously worked at the Federal Trade Commission's Bureau of Economics. He had also taught marketing and consumer behavior at the business schools of the University of Maryland at College Park and Boston University. While Mr. Calfee's writings are mostly on pharmaceutical markets and FDA regulation, his academic articles and opinion pieces covered a variety of topics, from patent law and tort liability to advertising and consumer information. His books include Prices, Markets, and the Pharmaceutical Revolution (AEI Press, 2000) and Biotechnology and the Patent System (AEI Press, 2007). Mr. Calfee wrote regularly for AEI's Health Policy Outlook series. He testified before Congress and federal agencies on various topics, including alcohol advertising; biodefense vaccine research; international drug prices; and FDA oversight of drug safety.

 

Tomas J.
Philipson
  • Tomas J. Philipson is a visiting scholar at AEI and the Daniel Levin Chair in the Irving B. Harris Graduate School of Public Policy as well as an associate member of the department of economics at the University of Chicago. He was a senior health care adviser to the 2008 presidential campaign of John McCain and served in the Bush administration as the senior economic adviser to the commissioner of the Food and Drug Administration from 2003 to 2004 and subsequently as the senior economic adviser to the administrator of the Centers for Medicare & Medicaid Services from 2004 to 2005. Mr. Philipson is an editor of Forum for Health Economics & Policy and is on the editorial board of Health Economics and The European Journal of Health Economics. He has twice been the recipient of the highest honor of his field, the Kenneth Arrow Award from the International Health Economics Association, in 2000 and 2006.  Mr. Philipson is the cofounder of Precision Health Economics, is an adviser to the Gerson Lehrman Group, and is a consultant for Compass-Lexecon and Analysis Group.
  • Email: tomas.philipson@aei.org
  • Assistant Info

    Name: Gregory Lane
    Phone: 2028624879
    Email: greg.lane@aei.org

 

W. Kip
Viscusi

 

Paul H.
Rubin
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