Why We Need a No-Fault Compensation System for Drug Injuries

The Evolution of Federal Regulation

The original federal drug regulatory regime, codified in the 1906 Pure Food and Drugs Act, had a narrow purpose: regulating 'adulterated' and 'misbranded' products ' ie, products whose actual composition deviated from that specified in their labels. Pure Food and Drugs Act, Pub. L. No. 59-384, ” 6, 8, 10, 34 Stat. 768, 770-71 (1906). As long as a product's label accurately reflected its composition, the product fell outside the 1906 Act's regulatory scope. Drugs were not pre-cleared for safety or effectiveness. Tort law claims based on injuries from those products provided an important check on the careless introduction into the market of unsafe products, giving manufacturers the incentive to ensure their products were not dangerous, therefore avoiding the possibility of liability for injuries arising from these products.

In 1938, Congress enacted the Federal Food Drug and Cosmetic Act (FDCA), which dramatically expanded the FDA's regulatory authority, prohibiting new drugs from reaching the market until the agency had verified the safety of the product 'for use under the conditions prescribed, recommended, or suggested in the proposed labeling thereof.' Federal Food Drug and Cosmetic Act, Pub. L. No. 75-717, ' 505(d)(1), 52 Stat. 1040, 1052 (1938) (codified as amended at 21 U.S.C. ' 355(d)(1)). In 1962, Congress further amended the FDCA to require manufacturers seeking new drug approval to demonstrate to the FDA that their proposed products were not only safe but also effective for each labeled use. Drug Amendments of 1962, Pub. L. No. 87-781, ' 102(c), 76 Stat. 780, 781-82 (1962) (codified at 21 U.S.C. ' 355(d)(5)). Through these and subsequent congressional actions, Congress has given the FDA the comprehensive mandate of ensuring that products entering the marketplace have been tested for both safety and effectiveness, as well as final control over which drugs are to be sold in the marketplace. See Jeffrey E. Shuren, The Modern Regulatory Administrative State: A Response to Changing Circumstances, 38 Harvard J. on Legis. 291, 299-315 (2001).

As discussed in the May, 2003 issue of this newsletter, the FDA has responded to this mandate by implementing a regulatory system that regulates prescription drugs from cradle to grave, such that it is difficult to identify areas of potential risk reduction that the FDA does not extensively regulate.

Ideally, a federal regulatory regime for prescription drugs should encourage innovation and the timely approval of new products while ensuring access to pharmaceutical products and maximizing patient protection. The FDA accomplishes this last goal through its testing requirements, labeling requirements and continuing oversight of marketed drugs.

Ensuring Patient Safety and Drug Efficacy

The FDA's oversight of prescription-drug safety encompasses three broad areas. First, the agency must approve each new drug product as safe and effective before it can be marketed. This is accomplished through review of applications submitted by manufacturers containing extensive information on a drug's chemistry, pharmacology, toxicity and manufacturing, as well as clinical safety and effectiveness information from human trials.

Second, the agency must determine that a drug product's labeling accurately conveys necessary directions. The FDA cannot approve a drug until it is satisfied that the labeling accurately describes the drug's indications and dosages, routes, methods, frequency and duration of administration, and any relevant hazards, warnings, contraindications, side effects and precautions of use. 21 C.F.R. ” 201.100(c)(1); 314.125(b). This permits prescribers to identify those individuals who can benefit from a drug, individuals who should not use a product because the possible risks to them outweigh the drug's benefits, and contingent risks patients should understand prior to taking the drug.

Third, the FDA continues to monitor products after they are marketed. Drugs may sometimes have unforeseeable adverse effects on certain populations. For example, serious adverse events may occur in some subpopulations at a rate too low to be detected as significant in clinical trials, and thus may not appear until after marketing. The FDA thus imposes on manufacturers a continuing duty to promptly review all adverse drug experience information received from any source, foreign or domestic, and to report such events to the FDA either periodically or, for more serious events, on an expedited basis. 21 C.F.R. ' 314.80. Manufacturers must also report annually all new information that might affect the safety, effectiveness or labeling of the drug. The FDA inspects manufacturers routinely to ensure, among other things, compliance with reporting requirements, and can impose significant administrative and criminal penalties for violations. In addition, the FDA solicits adverse event information from health care practitioners and the public on a voluntary basis. The agency may also require certain post-marketing studies from the manufacturer as a condition of approval.

The goal of the FDA's comprehensive regulation of drugs is to ensure that risks posed by medical products to the public throughout products' life cycles are as limited as possible. FDA, Task Force on Risk Management, Managing the Risks From Medical Product Use: Creating a Risk Management Framework (May 1999) (hereinafter, 'Managing Medical Risks'). However, the FDA recognizes the simple truth that no drug is without risk, and that drug approval must be based on a scientific analysis of the benefits to the public health as a whole versus the risk of individual harm posed by a drug. According to the FDA, 'safety does not mean zero risk. A safe product is one that has reasonable risks, given the magnitude of the benefit expected and the alternatives available.' Id., pt. 4 at 1.

The FDA's risk-management scheme also reflects a commitment to continual evolution, incorporating new management tools and emerging technology. For example, the agency has recently published a series of concept papers on risk management to facilitate public discussion and get public input on new agency proposals in the areas of assessing risk during drug development (FDA, Concept Paper: Premarketing Risk Assessment (March 2003), at www.fda.gov/cder/meeting/riskManageI.htm), individualized risk management programs for drugs as part of the approval process (FDA, Concept Paper: Risk Management Programs (March 2003),at www.fda.gov/cder/meeting/riskManageII.htm), and improving pharmacovigilance (FDA, Concept Paper: Risk Assessment of Observational Data: Good Pharmacovigilance Practices and Pharmacoepidemiologic Assessment (March 2003), at www.fda.gov/cder/meeting/riskManageIII.htm).

These papers include proposals for maximizing the value of the overall process of risk management planning, which encompasses the efforts of a manufacturer to minimize the risk from its product's use through a variety of means, including labeling, risk assessment, pharmacovigilance, and special studies or interventions. The agency is also working with partners such as New York's Columbia Presbyterian Hospital on developing tools that utilize current information technology to give the FDA immediate access to information about possible adverse drug events. FDA Commissioner Mark B. McClellan, Speech Before FDLI (April 1, 2003) at http://www.fda.gov/oc/speeches/2003/ fdli0401.html.

In addition, in August 2002, the agency began a major initiative on 'Pharmaceutical Current Good Manufacturing Practices (cGMPs) for the 21st Century: A Risk Based Approach,' which is designed to update cGMP's to reflect advances in manufacturing technologies and methods and evaluate and improve upon the agency's approach to reviews and inspections related to the manufacturing of human and animal drugs and biologics. In March 2003, the FDA also announced two proposed rules: a requirement for bar codes on drugs to reduce the number of medication errors by verifying that the right drug is being given to the right patient at the right time (FDA, Bar Code Label Requirement for Human Drug Products and Blood, Proposed Rule, 68 Fed. Reg. 12,500 (March 15, 2003), and a proposed revamping of safety-reporting requirements aimed at enhancing 'the agency's ability to effectively monitor and improve the safe use of medications' by improving the quality and usefulness of safety reports submitted to FDA (HHS News Release, 'Secretary Thompson Announces Steps to Reduce Medication Errors' (March 13, 2003), at http://www.hhs.gov/news/press/2003pres/20030313.html).

Next month's article discusses comflicts in the tort system.

Part One of a Two-Part Article

The FDA's approval of a prescription drug or biologic is the product of an often-delicate risk-benefit analysis of public benefit as opposed to individual safety. The therapeutic balance of these products must always be weighed against the risks inherent in their use. And there are always inherent risks associated with their use. Accordingly, while millions of Americans reap the benefits of prescription drugs every day, these same drugs may pose an unavoidable health hazard to a narrow, and often unidentifiable, subset of potential users. The American legal system currently regulates these risks by two means ' through the federal regulatory system as administered by the FDA, and through the common-law tort liability regime.

When the federal regulatory system was initially developed in the early 20th century, these two systems played important roles in protecting the public health. Today, however, while the FDA comprehensively and effectively manages the unavoidable risks of prescription drugs, it is becoming increasingly clear that the tort liability system may not do the same. In fact, the tort liability regime may actually undermine the FDA's risk-management scheme, to the detriment of the public. The development of an alternative means for compensating those injured by prescription drugs is therefore appropriate.

The Evolution of Federal Regulation

The original federal drug regulatory regime, codified in the 1906 Pure Food and Drugs Act, had a narrow purpose: regulating 'adulterated' and 'misbranded' products ' ie, products whose actual composition deviated from that specified in their labels. Pure Food and Drugs Act, Pub. L. No. 59-384, ” 6, 8, 10, 34 Stat. 768, 770-71 (1906). As long as a product's label accurately reflected its composition, the product fell outside the 1906 Act's regulatory scope. Drugs were not pre-cleared for safety or effectiveness. Tort law claims based on injuries from those products provided an important check on the careless introduction into the market of unsafe products, giving manufacturers the incentive to ensure their products were not dangerous, therefore avoiding the possibility of liability for injuries arising from these products.

In 1938, Congress enacted the Federal Food Drug and Cosmetic Act (FDCA), which dramatically expanded the FDA's regulatory authority, prohibiting new drugs from reaching the market until the agency had verified the safety of the product 'for use under the conditions prescribed, recommended, or suggested in the proposed labeling thereof.' Federal Food Drug and Cosmetic Act, Pub. L. No. 75-717, ' 505(d)(1), 52 Stat. 1040, 1052 (1938) (codified as amended at 21 U.S.C. ' 355(d)(1)). In 1962, Congress further amended the FDCA to require manufacturers seeking new drug approval to demonstrate to the FDA that their proposed products were not only safe but also effective for each labeled use. Drug Amendments of 1962, Pub. L. No. 87-781, ' 102(c), 76 Stat. 780, 781-82 (1962) (codified at 21 U.S.C. ' 355(d)(5)). Through these and subsequent congressional actions, Congress has given the FDA the comprehensive mandate of ensuring that products entering the marketplace have been tested for both safety and effectiveness, as well as final control over which drugs are to be sold in the marketplace. See Jeffrey E. Shuren, The Modern Regulatory Administrative State: A Response to Changing Circumstances, 38 Harvard J. on Legis. 291, 299-315 (2001).

As discussed in the May, 2003 issue of this newsletter, the FDA has responded to this mandate by implementing a regulatory system that regulates prescription drugs from cradle to grave, such that it is difficult to identify areas of potential risk reduction that the FDA does not extensively regulate.

Ideally, a federal regulatory regime for prescription drugs should encourage innovation and the timely approval of new products while ensuring access to pharmaceutical products and maximizing patient protection. The FDA accomplishes this last goal through its testing requirements, labeling requirements and continuing oversight of marketed drugs.

Ensuring Patient Safety and Drug Efficacy

The FDA's oversight of prescription-drug safety encompasses three broad areas. First, the agency must approve each new drug product as safe and effective before it can be marketed. This is accomplished through review of applications submitted by manufacturers containing extensive information on a drug's chemistry, pharmacology, toxicity and manufacturing, as well as clinical safety and effectiveness information from human trials.

Second, the agency must determine that a drug product's labeling accurately conveys necessary directions. The FDA cannot approve a drug until it is satisfied that the labeling accurately describes the drug's indications and dosages, routes, methods, frequency and duration of administration, and any relevant hazards, warnings, contraindications, side effects and precautions of use. 21 C.F.R. ” 201.100(c)(1); 314.125(b). This permits prescribers to identify those individuals who can benefit from a drug, individuals who should not use a product because the possible risks to them outweigh the drug's benefits, and contingent risks patients should understand prior to taking the drug.

Third, the FDA continues to monitor products after they are marketed. Drugs may sometimes have unforeseeable adverse effects on certain populations. For example, serious adverse events may occur in some subpopulations at a rate too low to be detected as significant in clinical trials, and thus may not appear until after marketing. The FDA thus imposes on manufacturers a continuing duty to promptly review all adverse drug experience information received from any source, foreign or domestic, and to report such events to the FDA either periodically or, for more serious events, on an expedited basis. 21 C.F.R. ' 314.80. Manufacturers must also report annually all new information that might affect the safety, effectiveness or labeling of the drug. The FDA inspects manufacturers routinely to ensure, among other things, compliance with reporting requirements, and can impose significant administrative and criminal penalties for violations. In addition, the FDA solicits adverse event information from health care practitioners and the public on a voluntary basis. The agency may also require certain post-marketing studies from the manufacturer as a condition of approval.

The goal of the FDA's comprehensive regulation of drugs is to ensure that risks posed by medical products to the public throughout products' life cycles are as limited as possible. FDA, Task Force on Risk Management, Managing the Risks From Medical Product Use: Creating a Risk Management Framework (May 1999) (hereinafter, 'Managing Medical Risks'). However, the FDA recognizes the simple truth that no drug is without risk, and that drug approval must be based on a scientific analysis of the benefits to the public health as a whole versus the risk of individual harm posed by a drug. According to the FDA, 'safety does not mean zero risk. A safe product is one that has reasonable risks, given the magnitude of the benefit expected and the alternatives available.' Id., pt. 4 at 1.

The FDA's risk-management scheme also reflects a commitment to continual evolution, incorporating new management tools and emerging technology. For example, the agency has recently published a series of concept papers on risk management to facilitate public discussion and get public input on new agency proposals in the areas of assessing risk during drug development (FDA, Concept Paper: Premarketing Risk Assessment (March 2003), at www.fda.gov/cder/meeting/riskManageI.htm), individualized risk management programs for drugs as part of the approval process (FDA, Concept Paper: Risk Management Programs (March 2003),at www.fda.gov/cder/meeting/riskManageII.htm), and improving pharmacovigilance (FDA, Concept Paper: Risk Assessment of Observational Data: Good Pharmacovigilance Practices and Pharmacoepidemiologic Assessment (March 2003), at www.fda.gov/cder/meeting/riskManageIII.htm).

These papers include proposals for maximizing the value of the overall process of risk management planning, which encompasses the efforts of a manufacturer to minimize the risk from its product's use through a variety of means, including labeling, risk assessment, pharmacovigilance, and special studies or interventions. The agency is also working with partners such as New York's Columbia Presbyterian Hospital on developing tools that utilize current information technology to give the FDA immediate access to information about possible adverse drug events. FDA Commissioner Mark B. McClellan, Speech Before FDLI (April 1, 2003) at http://www.fda.gov/oc/speeches/2003/ fdli0401.html.

In addition, in August 2002, the agency began a major initiative on 'Pharmaceutical Current Good Manufacturing Practices (cGMPs) for the 21st Century: A Risk Based Approach,' which is designed to update cGMP's to reflect advances in manufacturing technologies and methods and evaluate and improve upon the agency's approach to reviews and inspections related to the manufacturing of human and animal drugs and biologics. In March 2003, the FDA also announced two proposed rules: a requirement for bar codes on drugs to reduce the number of medication errors by verifying that the right drug is being given to the right patient at the right time (FDA, Bar Code Label Requirement for Human Drug Products and Blood, Proposed Rule, 68 Fed. Reg. 12,500 (March 15, 2003), and a proposed revamping of safety-reporting requirements aimed at enhancing 'the agency's ability to effectively monitor and improve the safe use of medications' by improving the quality and usefulness of safety reports submitted to FDA (HHS News Release, 'Secretary Thompson Announces Steps to Reduce Medication Errors' (March 13, 2003), at http://www.hhs.gov/news/press/2003pres/20030313.html).

Next month's article discusses comflicts in the tort system.