Imagine the following scenario: a PhD candidate, before writing his dissertation, sits down with his PhD examiner. She says to him, “as long as you structure your argument in this particular way, and use this specific evidence, I will pass your dissertation. Don’t worry – I’ll be with you every step of the way, in case you have any problems or questions. After all, it’s in the interest of both of us – and society more widely – that your thesis is approved as quickly and painlessly as possible.”

This is the new model of pharmaceutical regulation.

Traditionally, regulatory theory focused on the need for regulatory independence. This literature emphasized the relationship between the regulatory agencies and the state, and generally argued that a regulatory body could not perform its functions effectively if it did not retain sufficient independence. But a different kind of regulatory relationship has emerged, especially within the pharmaceutical sector, and there has been very little critical discussion of this shift.

This new kind of relationship sees regulatory bodies not just as adjudicative bodies (this drug will be licensed; that one won’t) but also as assistors and enablers. Increasingly, pharmaceutical regulators such as the US Food and Drug Administration (FDA), the European Medicines Agency (EMA), and Health Canada are being tasked by their political masters with assisting those applying for licensing approval. In the most recent articulation of this expectation, the European Union has developed a model called “Adaptive Pathways.” Under this pilot, the EMA not only sits in judgment of companies’ applications for drug approval, but it is also being asked to assist these companies in navigating the bureaucratic process of application, in designing the protocol for testing the drugs, and even in identifying which kinds of drugs should be developed.

This new kind of relationship sees regulatory bodies not just as adjudicative bodies, but also as assistors and enablers.

The reasons for this shift in function are clear. Biomedical and pharmaceutical markets are the most profitable in the world, eclipsing that of the banking, automotive, energy, and media sectors. Worldwide, the market for pharmaceuticals is worth US$1057.2 billion, and is still expanding, especially in developing states.

Within this market, the biggest expansion is for niche or “orphan” drugs that target very specific conditions. These drugs comprised over 40% of all FDA approvals for new drugs in 2014. These drugs are more controversial than traditional ones, as there are too few subjects to perform standard clinical trials. Testing of safety and effectiveness is increasingly carried out after approval has been given, even though there is evidence that the willingness to follow through on these studies wanes once these drugs hit the market.  As traditional testing methods become increasingly unsuitable for these lucrative classes of drugs, governments have charged their regulatory agencies with figuring out ways to assist biomedical and other pharmaceutical companies bring these products to market.

Health Canada serves in an advisory capacity to the very industry it is expected to regulate.

A report by Industry Canada noted that “Federal and provincial policy and regulations can enhance or detract from the business climate for the Canadian pharmaceutical industry,” and suggested that “[a]n increase in government policy supporting R&D may further strengthen Canada’s expertise in niche areas within biologics and oncology.” As in other states, the concept of “state support” in Canada has gone from the utilization of tax incentives, subsidies, and market access arrangements to the requirement that Health Canada serve in an advisory capacity to the very industry it is expected to regulate.

In 2002, Canada’s Auditor General released a report on public sector accountability. In it, the Auditor General noted the increase in “partnering arrangements” between public, private, and private not-for-profit bodies. This may be a characteristic of twenty-first century governance. “If the roles and responsibilities of each are not clear, however,” added the Auditor General, “shared accountability can become accountability diffused.”

It is reasonable to provide a clear set of expectations and protocol requirements for industries that must acquire regulatory approval before they can market their products. It is also unsurprising that states would want to support private sector innovation in ucrative markets with a high degree of export potential. But we should ask what precisely the model of public accountability is that underlies this new kind of function placed on regulatory agencies. And we should ask whether there are any checks and balances, such as requirements for public transparency, which would ensure effective accountability in this new regulatory regime.

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Katherine Fierlbeck
Katherine Fierlbeck is McCulloch Professor of Political Science at Dalhousie University. She holds cross-appointments with the Departments of Community Health and Epidemiology, European Studies, and International Development Studies; and is a Fellow at the European Union Centre of Excellence. Katherine has published six books to date; the most recent are Comparative Health Care Federalism: Competition and Collaboration in Multistate Systems (ed. with H. Palley), Ashgate Press, 2015; Health Care Federalism in Canada: Critical Junctures and Critical Perspectives (ed. with Bill Lahey), McGill-Queens University Press, 2013; and Health Care in Canada: A Citizen's Guide to Politics and Policies, University of Toronto Press, 2011. She is currently working on a Health System Profile book on Nova Scotia for the McGill-Queen University Press Book Series on Provincial-Territorial Health Systems.

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