Consumer Reports for Medicines
A Consumer Product Testing Act would help capitalism defeat its mortal enemy, monopoly
The three legislative proposals in yesterday’s post, “Life, Liberty, and the Pursuit of Health Experiments,” would affirm that people have a right to choose whichever non-addictive medicines they feel best fit their own individual risk/benefit preferences. Whether private health insurers should be required to cover these individual choices is a separate issue. Under the current system, the FDA decides how a medicine can be used and the CDC recommends how the medicine should be used. In general, the CDC judgment determines whether an insurer shall cover the medicine. The legislation I’m proposing would stipulate that the CDC is authorized to evaluate whether a Conditionally Approved medicine ought to be covered by insurance.
Insurers ought to voluntarily cover Xocova under expanded MUMS (see yesterday’s post) because Xocova is known to reduce the risk of hospitalization and long Covid, which are vastly more expensive than a five-day course of Xocova. It’s also much less expensive than Paxlovid (which CDC currently requires insurers to cover). Unfortunately, much that happens in our anti-competitive health insurance “marketplace” makes very little sense. If all your friends and family are perfectly healthy, and you haven’t noticed any problems arising from foolish short-term thinking (because you live in a cave or something?), then listening to any single random episode of An Arm and a Leg will open your eyes to problems so egregious they should make you angry.
In light of outrageous problems with the American healthcare system, the FDA reforms I’m proposing would undoubtedly leave some people unable to afford medicines they might wish to choose—particularly medicines with monopoly-extortion price tags. This is an important problem, but the solution isn’t to bring everybody down to a status where we’re all equally deprived of choices. Our goal should be a level playing field where everybody is empowered to pursue a dignified healthy life. Addressing egregious problems with the broader American healthcare system and rolling back America’s toxic rising tide of wealth inequality1 are important objectives, but the focus of this article is how to help the FDA better fulfill its important charter.
Legislative Proposal 4: The Consumer Product Testing Act (COPTA)
For examples like Xocova, there’s already plenty of evidence to support a Conditional Approval decision and consumers can easily read mass media coverage or scientific literature that would help them understand whether Xocova might be a wise choice to invoke for themselves under Right to Buy legislation. Other medicines may be more challenging because there isn’t enough high-quality scientific evidence to support confident decision-making. The frequent lack of evidence is in part because the current system relies heavily on product manufacturers to test their own products, so there’s little incentive to test candidate medicines that can’t be protected by patents or trade secrets.
I’m a lifelong Consumer Reports subscriber, in part because I believe that capitalist economies can only function properly if consumers have ways to accurately judge product quality before they buy. I’d never buy a car or a refrigerator without first checking Consumer Reports. For medicine, there’s currently no Consumer Reports-like mechanism for comparative product testing.
The purpose of the Consumer Product Testing Act (COPTA) would be to foster the development of infrastructure for routine independent testing of medical products. The availability of streamlined low-cost testing systems, together with the new Conditional Approval track, would lower barriers to market entry for new medical products. A primary aim of COPTA is to promote market competition, which would in turn help address the problem of monopoly-extortion pricing.
One barrier to the development of Consumer Reports for medical products is that testing medicines is riskier, more time-consuming, and more expensive than testing cars or refrigerators. I find it hard to imagine a standard personal subscription model working for a medical version of Consumer Reports.
An obvious solution might be a public option, where a new National Institutes of Health (NIH) division would be created to directly conduct medical product testing. Although I would argue that the NIH is a jewel in the crown of America’s proudest achievements, I can imagine drawbacks to this option. Despite the fact that the overwhelming majority of federal spending goes to entitlements and defense, a public testing option would be seen as a major expansion of tax-and-spend big government—and it would therefore be hard to attract buy-in from conservatives. Moreover, when conservatives argue that central planning doesn’t always work out quite as well as we liberals hope it will, they’re making a reasonable point. Current problems with the FDA are arguably an example of the very thing conservatives have been trying to warn us about.
One of these days, I’m going to get around to writing a joint review of Private Government, by Liz Anderson, and Adam Smith’s America, by Glory Liu. From these fascinating books I learned that The Wealth of Nations was built upon an intellectual foundation originally laid down by the Levellers of the 17th century, who proposed popular reforms aimed at promoting human equality. In Smith’s egalitarian moral framework, oligopoly—whether aristocratic, governmental, trade guild, or corporate—is a primary barrier to national flourishing. In Smith’s original conception, monopoly isn’t the inexorable destiny of capitalism, it’s the blight that capitalism was originally intended to cure. Another way of saying it is that we’ve known since the beginning that capitalist economic systems can only work if there’s a level playing field for fair competition.
There are areas where it’s hard to imagine ways to create fair market competition for a particular good or service. The publicly funded blue-sky basic science research research my lab pursues is one example. But the existence of ConsumerLab.com—which uses a personal subscription model to provide comparative product testing for food supplements—teaches us that independent testing can be a competitive business model, at least in terms of quality-control for medicine-adjacent products. I’ve been generally happy with the ConsumerLab subscription I got while researching the mint-versus-Covid hypothesis, but their article covering supplements that might fight Covid is woefully out of date, and they don’t offer testing of the caffeic acid content of mint-family tea products. If I could find a different testing company that offers caffeic acid info, I would jump ship. It illustrates Smith’s great insight that fair market competition increases national wealth by productively keeping everybody on their toes. We should make use of it wherever it seems feasible to do so.
Profit margins in the private clinical trial contracting sector have been estimated to be 50-70%. The sector is dominated by a single large conglomerate, IQVIA, which is currently under a court injunction for anti-competitive practices. I’m proposing that the federal government tax pharmaceutical sector monopoly-extortion profits, and use the revenue to offer independent medical product testing companies a matching subsidy that is indexed to their subscriber base. Nurturing independent testing infrastructure would be a far more productive way to use the approximately $80 billion the pharmaceutical sector currently squanders each year on profligate stock buybacks.
COPTA would also provide low-interest startup loans to facilitate the creation of new independent testing companies. The approach is similar to the Energy Loan Program that helped promote competition in the electric vehicle market by saving Tesla. The development of independent consumer product testing companies would enable competitive-bid contracting for efficacy testing of specific high-priority products of interest. Mint! Mint, I tell you!
ConsumerReports.org is a nonprofit company. I also note that my husband works for a defense contractor that has been spectacularly successful ever since they escaped unwanted short-termist monopolization pressures by converting to an employee-ownership model (ESOP) in 2017. If my husband ever gets around to writing a post about the subject, I’ll provide a link. Poke, poke, Honey! The point is that federal contracts can easily offer preferred status to ESOP and/or nonprofit companies. For example, under the current National Defense Authorization Act (NDAA), ESOP companies are offered priority for sole-source renewal once per contract. Support for this clause of the NDAA was bipartisan.
The COPTA approach rests on the premise that finding out which medicines help make people healthier is, like my husband’s work defending our country, a job that people enjoy and feel proud of. The lure of windfall profits isn’t necessary to convince people to do this type of work2.
As the name of the Consumer Product Testing Act implies, it wouldn’t necessarily just be about medicine. I find it disappointing that Consumer Reports doesn’t have adequate resources to test all the brands of cars and refrigerators I’d like to see compared. Our capitalist economy would likely work more efficiently if Consumer Reports had a bigger budget - and if it had some competitors keeping it on its toes. Farther afield, I can also imagine using a subscriber-matching approach to promote a more competitive marketplace for independent journalism. Hey there, Substack journalists!
Like, Um, Duh Legislation
Pharmaceutical companies pay FDA salaries. In addition to needlessly creating conflicts of interest, the ~$2 million dollar “user fee” system also creates a major barrier to market entry. Maybe high user fees are why Shionogi hasn’t applied for veterinary Conditional Approval under existing MUMS law? A law that creates perverse incentives while suppressing fair market competition obviously shouldn’t have been renewed.
We should also close the revolving door that currently allows FDA employees to accept job offers from the corporations they regulate. The Hulu series Dopesick casts the stakes of this particular problem into stark relief. The FDA, like Caesar’s wife, should be held above this type of reproach.
Final thoughts
The current Congress has passed 33x fewer bills than the famous “do-nothing” Congress of 1948—which passed the Marshall Plan, the National Security Act, and the Presidential Succession Act. The do-absolutely-nothing-whatsoever Congress has been stirring up futility bias in the minds of friends who helped me hammer out these ideas. I urge readers to resist this insidious fallacy3. Complacency kills.
Acknowledgements
I’m grateful to David Humphrey, Brad Queen, Andrew Rum, Jake Seliger, Chris Shiebler, Chris Tharrington, and my friends who used to work for FDA for helping me hammer out these ideas and for critical review of the article. I’m especially grateful to Jake for helping streamline the arguments with improved plain language.
Disclaimers
•The thinking behind this article comes from my experience as a vaccine developer. I receive licensing royalties for vaccines that are currently in preclinical development.
•I am not a licensed medical professional
•A few clarifying sentences have been added to the initial post in response to reader critiques (which I welcome!)
•This article is mirrored on my Medium account
“The fact is that the work which improves the condition of mankind, the work which extends knowledge and increases power and enriches literature, and elevates thought, is not done to secure a living. It is not the work of slaves, driven to their task either by the lash of a master or by animal necessities. It is the work of men who perform it for their own sake, and not that they may get more to eat or drink, or wear, or display. In a state of society where want is abolished, work of this sort could be enormously increased.” Henry George (1879) Progress and Poverty
Inspirational song of the day: “Complicated” by Poi Dog Pondering