Les Jones

Economics > Tort Reform for Drug Companies

Alex Tabarrok at Marginal Revolutions explains why it's needed:

[FDA] Approval, however, does not end a firm's problems because even then it faces the risk of a debilitating lawsuit. Consider how bizarre this is: A team of statisticians, physicians and medical researchers pours over years of clinical data to pronounce a product safe (always noting that this means safe relative to the product's expected benefits) and then a jury of 12 randomly selected Joes and Janes second guesses them, awards plaintiffs billions of dollars and drives the firm into bankruptcy. This has happened more than once.

FDA approval ought to be a "safe harbor." Many states already have laws along these lines but they have been weakly enforced. The Bush administration's efforts to limit lawsuits against firms that have passed FDA approval is a therefore a necessary and welcome piece of common sense.