Causing More Harm than Good: Conflict-of-Interest Rules Thwart Medical Progress

by Richard Epstein

Forbes
October 26, 2010

In the abstract, just about everyone favors the rapid development and deployment of new pharmaceuticals and medical devices. But when the question turns on how to organize these vital activities, universities, hospitals, and government agencies often adopt strategies that undermine this basic objective. The increased severity of conflict of interest regulation of firms developing drugs and medical devices offers a powerful illustration of the unfortunate recent trends in this area.

More concretely, these two industries are now facing a two-pronged attack. As regards the creation of new knowledge, a wide range of public and private regulations now curb cooperation among research scientists in the industry, the academy, and government. As regards the dissemination of information about new drugs and devices, pharmaceutical companies are subject to increasingly stringent rules on the types of promotional practices that they can use to market their new products. Together, these costly regulatory initiatives spell lower rates of innovation and slower dissemination of newer products.

In a recent report that I prepared for the Manhattan Institute, I seek to develop, at length, the downside of the strong, present push to add more teeth into conflict of interest regulation. It is useful to set out the key steps in the argument as it applies to new drug and device development.

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