Niklas talks with Raymond J. March, the Director of fdareview.org at the Independent Institute, public policy and public choice fellow at the American Institute for Economic Institute and assistant professor for economics at North Dakota State University.
Entrepreneurs are often taught the incentives of investors but rarely do they learn how the incentives of public bureaucracies work. However, in the area of medical technology and healthcare, navigating public health institutions is vital.
This episode is a takedown of the most powerful government agency in the world - the U.S. Food and Drug Administration (FDA). It regulates 40% of products in the US market and has an outsized influence on international markets.
Ray explains the concept of public choice economics and how it helps us understand the incentives of a large bureaucracy. Public officials are self-interested and their incentive is to rather let someone die from natural causes than from a bad drug.
The FDA withheld better insulin from diabetes patients, HIV drugs, and more covid-19 vaccines - all of which could have saved potentially millions of people's lives.
Historically, the FDA massively expanded in size and reach into what became into the 2000s a giant behemoth that mandates 10+ years and $1bn+ costs for approving new drugs, medical devices, and therapies. Even software can be regulated.
During the covid-19 pandemic, the key flaw of the FDA approval process became apparent: speed. A pandemic is no time for decade-long testing.
The pandemic led to deregulatory pressures on the FDA, and they may lead to progress when it comes to patients' rights and medical innovation.
We invite you to join us to build the healthcare systems of the future together on Roatan, Honduras, a beautiful Caribbean island:
Prospera Healthtech Summit, September 23-25, 2022
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Ep. 8: The Case Against the FDA