Among several regulatory bodies, if one has to pick the two biggest promoters or inhibitors of capitalist expansion in the US, it is the FDA and SEC. The SEC in recent times has again gained prominence in the media due to the Wall Street disaster and the sudden love people have found for more monitoring of so called “greedy” Wall Street practices through the SEC. In similar lines, the FDA also comes under the radar and mostly misses the hawk eyes of the media because of the nature of its responsibilities. Certain concerns I have with how SEC can truly manage greed at Wall Street also applies to how the FDA can effectively do it.
For starters, the FDA is a government body and probably employs people with an inclination towards working in a government enterprise. Looking at how Americans in general perceive government jobs, I believe applicants to the FDA may also fall into a group that is not so sought after by many. Moreover, the FDA is a regulatory authority with heavy “influential” capabilities. This means the power to dictate the direction in which business establishments move. However, as I often feel, with power comes politics or vice-versa. So, working on these hypothetical assumptions, there are a lot of questions that cross my mind. Questions for which I still seek answers.
The FDA has 9300 employees with a budget of $2.3 Billion (2008) . 30% of that money comes from user fees, charges levied on companies who submit new applications for prescription drugs, medical devices etc. So, in effect, the government is contributing to only 70% of this budget.
The FDA not only regulates new product entrants but also existing products in food, Health and Beauty aids, medical devices and biological products. The companies that were talking about in these areas are not only within the US but also spread around the world. Several among these companies are giant corporations with multi-billion dollar sales and dominant market shares in the world. Even by taking a wild stab, the combined “wealth” of these companies in terms of their market influencing capability (based on their sales) will be about $500 Billion. Assuming that only 50% of their sales is spent on creating products that are monitored or evaluated by the FDA, we arrive at a $250 Billion spend for these companies.