The U.S. Food and Drug Administration is the most powerful regulatory agency in the world. How did the FDA become so influential? And how exactly does it wield its extraordinary power? Reputation and Power traces the history of FDA regulation of pharmaceuticals, revealing how the agency's organizational reputation has been the primary source of its power, yet also one of its ultimate constraints.
Daniel Carpenter describes how the FDA cultivated a reputation for competence and vigilance throughout the last century, and how this organizational image has enabled the agency to regulate an industry as powerful as American pharmaceuticals while resisting efforts to curb its own authority. Carpenter explains how the FDA's reputation and power have played out among committees in Congress, and with drug companies, advocacy groups, the media, research hospitals and universities, and governments in Europe and India. He shows how FDA regulatory power has influenced the way that business, medicine, and science are conducted in the United States and worldwide. Along the way, Carpenter offers new insights into the therapeutic revolution of the 1940s and 1950s; the 1980s AIDS crisis; the advent of oral contraceptives and cancer chemotherapy; the rise of antiregulatory conservatism; and the FDA's waning influence in drug regulation today.
Reputation and Power demonstrates how reputation shapes the power and behavior of government agencies, and sheds new light on how that power is used and contested.
|Publisher:||Princeton University Press|
|Series:||Princeton Studies in American Politics: Historical, International, and Comparative Perspectives , #137|
|Product dimensions:||5.90(w) x 9.20(h) x 2.00(d)|
About the Author
Daniel P. Carpenter is the Allie S. Freed Professor of Government at Harvard University. He is the author of The Forging of Bureaucratic Autonomy: Reputations, Networks, and Policy Innovation in Executive Agencies, 1862-1928 (Princeton).
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Reputation and PowerORGANIZATIONAL IMAGE AND PHARMACEUTICAL REGULATION AT THE FDA
By DANIEL CARPENTER
PRINCETON UNIVERSITY PRESSCopyright © 2010 Princeton University Press
All right reserved.
Chapter OneReputation and Regulatory Power
In ways that are stark and in ways not easily seen, organizational reputations animate, empower, and constrain the manifold agencies of government. Reputations are composed of symbolic beliefs about an organization-its capacities, intentions, history, mission-and these images are embedded in a network of multiple audiences. From military bodies and diplomatic establishments to disaster relief outfits and regulatory commissions, government agencies are buffeted and suffused by a multidimensional politics of legitimacy. Reputations can expand or deflate the legal authority that agencies exercise by virtue of law and delegation. Reputations can intimidate or embolden the subjects of government and, in so doing, reputations can complicate an agency's tasks or render them facile. Reputations can, by assigning expertise and status to government agencies, allow them to define basic terms of debate, essential concepts of thought, learning, and activity. In its directive facets, its gatekeeping facets, and its conceptual facets, regulatory power depends profoundly upon the image of state organizations.
The central concept in a reputation-based perspective on regulation is that of audience. An audience is any individual or collective that observes a regulatory organization and can judge it. Put most simply, audiences shape regulation in two ways. First, various audiences empower or weaken the regulator. Audiences such as legislatures can grant authority to the regulator. Audiences such as firms and regulated individuals can convey power by obeying the regulator's rules and suggestions, or contest power by challenging those precepts. Audiences such as scientific and professional organizations, firms, and institutions of learning can grant conceptual power to the regulator by accepting the agency's definitions of technical terms and concepts. These audiences also reproduce the regulator's definitions by using them as if they were natural or "purely" scientific, rather than as a partially regulatory creation. Second, regulatory organizations and their members adapt to their audiences. They adapt behavior and rhetoric. They adapt both consciously and unconsciously, in ways that are dynamically planned and in ways they may scarcely recognize. Patterns of anticipation and reaction to audience can in fact permit scholars to systematically interpret and explain regulatory behavior, in ways that scholars using other theories and models cannot.
Matters are of course more complicated than this simple portrait suggests. Government agencies live among numerous audiences, and these audiences overlap and blend into one another. Audiences include the political and judicial authorities who endow organizations with power; interest groups and civic associations; organizations of professional and scientific expertise; media syndicates in print and broadcast, and the mass publics who digest the information produced by these syndicates; the companies, corporations, and citizens who are governed by agencies; the clienteles who rely upon agencies for benefits and for order. In political systems like the United States-with formal separation of powers among legislative, executive, and judicial branches; with federalist structures that multiply and refract government capacity; and with pluralist political structures that often scatter the forces of business, labor, religion, race, and ethnicity-these audiences stand ever more diffuse.
Another central complication is that what one audience sees is not necessarily what another audience sees. Within and between the audiences of government there flow opaque and symbolic beliefs about the agency-its intentions, its authenticity and legality, its capacities and weaknesses, its unity or disunity, its most historic achievements and most enduring failures, its likely actions in the next day, year, or decade. In part because perception differs across audiences, so does judgment. These images and judgments shape the power of government organizations, and more broadly, the powers of the state.
The powers of government depend in enduring ways upon organizational vessels of state and their collective images. This pattern is especially relevant in government regulation of social and economic behavior. In the sort of government regulation that is practiced in democratic republics, generally small government entities undertake to shape and constrain the behavior of massive economies and institutional relationships. A regulatory agency and its diminutive staff are often charged with enforcing complex statutes over wide spaces of territory and technology; preventing and deterring consumer fraud; guarding the value, stability, and privacy of consumers and workers; compelling patterns of honesty and fair play in large, dynamic markets; establishing standards of behavior and measurement. Such an agency may facilitate its work by establishing and maintaining a name for stringency, so as to induce thoroughness and caution on the part of private actors. Such an agency may fail in its tasks if it fails to project an image of strict enforcement as a way of inducing compliance with the law and less formal policies. Such an agency may benefit from enhancing its reputation for flexibility to encourage some degree of risk-taking and, perhaps, honesty. Such an agency may preserve its political relations with representatives of producers and employers by demonstrating this flexibility. By its actions, such an agency may attract or repel members with technical skills and experience. By the oscillation of its image, it may keep or lose the persons in its employ or its circle of advice.
Because regulatory organizations include numerous individuals, offices, and activities, an organizational reputation is rarely singular. Reputations bind to the assorted capacities and actions of government agencies. A regulatory organization may be known as moderate in its enforcement behavior, stringent in its licensing, and aggressive in its development of standards. Its enforcement may be considered to be strong in administering one statute, and weak or flexible in implementing a second. An agency's governance of one marketplace or geographical region may be considered distinct from its regulation of another, perhaps so much so as to provoke questions of procedural fairness or equity. The actions of government entities, especially the more visible and controversial ones, will feed back to shape the reputations that empower and constrain them. The result of this feedback is not tautology but duality and historical reality. Expectations may be affirmed when challenges to regulatory power fail to materialize, when emotions constrain the agenda of economic and political possibility. When actions leave predictions disappointed, new images emerge and melt into the old ones, and might replace them.
Regulation and Its Limited Theories
Organizational image molds government power, and perhaps nowhere more significantly than in economic regulation. Modern life is shot through with regulations and regulators, or at least it seems that way. Financial transactions and wages, radio and television broadcasts, new home construction and landscaping, the manufacturing of computers, toys, and household products, the processing and packaging of food, and the development of medicines-all of these patterns and practices of daily life, and many, many more, are shaped by government actors in the name of "regulation." Not only are many things regulated, but for each entity regulated, there are often many regulators. To take one example, consider the modern automobile. The size, weight, fuel efficiency, emissions, and safety characteristics of cars-and the manner in which cars are manufactured-are all thoroughly and legally shaped by national governments, by state-level agencies and local bureaus, by courts, by industry certification programs, and by companies themselves through "self-regulation."
In the United States, regulation by the national government is as old as the republic itself. Yet in nineteenth-century America regulation was more often conducted by state and local governments than by national executive agencies, and much regulation at the federal level was undertaken not through the executive branch but by the courts. As the regulatory state of the twentieth century grew-across nations and industries, and at the state, local, and national levels within the United States-academic scholars and journalists alike began to ask how regulations come about, and why the agencies that implement or enforce them behave the way they do.
A century later, most of the answers to these questions seem to fall into two camps: regulations are intended to solve real problems and are implemented by neutral and public-spirited officials, or regulations are intended to redistribute (usually to the industry being regulated) and their implementing officials are kleptocrats of a sort. Regulation amounts to an endeavor toward the "public interest," or it is "captured" by the regulated industry and used as a tool to divert wealth to entrenched interests and the government itself.
The Public Interest Theory as a Fictional Straw Man. At no point in the twentieth century were the various theories and narratives that we now call "public interest theory" collected into a unified, textbook account. Put differently, there is no single public interest theory. If any such theory exists, it has been synthesized much more clearly in the writings of its opponents than by any who would call themselves public interest scholars of regulation. Indeed, very few public interest accounts of regulation actually employ the term "public interest." The term is much more commonly used by capture and rent-seeking theorists.
Hence, "public interest" is less a body of theory and more a descriptive label used by critics of an earlier era's scholarship. It collects under one term an array of views, each of which tends to render three claims about the origins and operation of regulation. These three claims combine a normative statement of what regulation should be with a positive notion of how regulation comes about and how it operates in practice.
First, regulation should (and generally does) serve the general interest of a society, in particular the welfare of consumers. Historically, consumer enrichment and protection are the reasons for which regulations have been created. Second (which can be read as a variant of the first), regulation serves to correct "market failures," such that market failures help to locate and explain the rise and incidence of regulation, and such that regulation in fact serves to correct or ameliorate these failures. Third, the administrators of a public interest regulation are, and should be, characterized by neutral competence in the pursuit of objectives specified in law.
In the past few decades there has been little development in this literature, at least from the standpoint of politics and political economy. The public interest theory of regulation is mainly kept around as a punching bag for theorists of capture and rent-seeking. As critics have noticed, it is a normative portrait of what regulation ought to look like, but since it lacks an account of how regulatory politics might create regulation, it is woefully incomplete. By default, the public interest theory of regulation commits a form of theoretical naïveté.
The other distinctive feature of public interest accounts is that the font of policy in these stories-the essential political decision maker or voter-is the consumer of goods and services in a modern industrial economy. Most of these studies identified consumers as the intended and actual beneficiaries of regulation. Hence the economic and political objective of regulation under the public interest view is seen to be the maximization of consumer welfare. The difficulty comes, once again, in the portrait of politics. By definition (or by the lack of it), consumers are seen to represent the mass of society, the general public. The problem with equating the public interest with the consumer interests is that consumers are often poorly organized both in the economy and in the polity, and public interest theories never specified a compelling political account of how these consumers mobilized or organized to demand regulation from their representatives.
Recent Normative Accounts of Regulation: Risk and Externalities. Some recent writings might be called "public interest" views because they focus on normative justifications for regulation. The most notable of these has been the resurgence of interest in the regulation or management of risk. Analysts from law, business, and economics have identified the management of risk as the dominant form of regulatory policy, and an unappreciated form of government policy. One way of viewing government policies on environmental hazards, occupational safety, the approval of new medicines and other technologies, and other forms of regulation is that they represent public attempts to regulate risk by reallocating it across the members of society. On this view, according to some theorists, government's regulatory functions have grown because the state has a unique ability to reallocate risk in large, industrial societies.
As with more traditional public interest accounts, however, theories of "risk regulation" falter in their portrayal of political life. Scholars can point easily to regulation of risk as a potential justification for all sorts of government policies. Yet in doing so, they leave the crucial question unanswered. What about the political system translates the existence of risk into a policy whereby government manages that risk? Why will the agents of risk regulation-what one theorist calls "risk monitors"-be expected to behave in such a way as to identify risks and manage them? If anything, the existing narratives point to a form of reputation as the decisive factor animating risk regulation: the belief that government in general, and some government bodies in particular, could smooth an unstable world. The notion that government (in general or particular) could manage risk to a degree that neither an unregulated market nor a set of social institutions could, is one shot through narratives of the origins of risk management policy in the United States, ranging from product liability to worker's insurance to environmental regulation.
Today, in many analyses of regulation, and regulatory agencies, a similar sort of public interest perspective is implicitly taken, but one that is derived from microeconomic theory. The standard microeconomic analysis of regulation begins with justifications for regulation based on some notion of a market failure or externality. Conceptually speaking, an externality is a product of a transaction that affects parties who were not involved in the transaction. At least some of the externality's value is neither embedded in nor communicated by its price; hence part of the value of the product, whether negative or positive, is "external to" the price system. Modern theorists of regulation-witness any number of recent treatises or textbooks on the subject-begin with the unregulated market as a sort of "state of nature." Scholars then walk point by point through different forms of market failures and the regulations which are purported to solve them. In many cases, scholars identify nongovernmental solutions to these externalities, such as tradable permits in environmental regulations. Yet in these studies, too, the political and historical emergence of alternative forms of regulation is almost entirely neglected.
Capture and Rent-Seeking Perspectives. The producer capture argument has become perhaps the dominant account of regulatory policy. The theory offers both an account of formal regulation-as in laws and rules-and a portrait of the regulatory agency that administers the formal regulation. The legislature rewards the bribes of industry with regulatory protection because the form of these bribes-campaign contributions or votes-assists politicians in their ultimate goal of getting re-elected. The agency cozies up to existing firms, particularly the large and stable ones, because they provide the reason for its existence. Moreover, the agency and the industry ritually exchange personnel and thereby create an unholy "revolving door." The agency recruits employees from the industry that it regulates. After a period of service at the relevant commission, the officials depart the agency and return to industry for lucrative careers there. The revolving door hypothesis suggests that industry and regulators are united not just by interests but in terms of identity. Regulators and the regulated are one and the same people.
Excerpted from Reputation and Power by DANIEL CARPENTER Copyright © 2010 by Princeton University Press. Excerpted by permission.
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Table of Contents
List of Illustrations ix
List of Tables xi
List of Abbreviations and Acronyms xvii
Introduction: The Gatekeeper 1
Chapter 1 Reputation and Regulatory Power 33
Part 1 Organizational Empowerment and Challenge
Chapter 2 Reputation and Gatekeeping Authority: The Federal Food, Drug and Cosmetic Act of 1938 and Its Aftermath 73
Chapter 3 The Ambiguous Emergence of American Pharmaceutical Regulation, 1944–1961 118
Chapter 4 Reputation and Power Crystallized: Thalidomide, Frances Kelsey, and Phased Experiment, 1961–1966 228
Chapter 5 Reputation and Power Institutionalized: Scientific Networks, Congressional Hearings, and Judicial Affirmation, 1963–1986 298
Chapter 6 Reputation and Power Contested: Emboldened Audiences in Cancer and AIDS, 1977–1992 393
Part 2 Pharmaceutical Regulation and Its Audiences
Chapter 7 Reputation and the Organizational Politics of New Drug Review 465
Chapter 8 The Governance of Research and Development: Gatekeeping Power, Conceptual Guidance, and Regulation by Satellite 544
Chapter 9 The Other Side of the Gate: Reputation, Power, and Post-Market Regulation 585
Chapter 10 The Détente of Firm and Regulator 635
Chapter 11 American Pharmaceutical Regulation in International Context: Audiences, Comparisons, and Dependencies 686
Chapter 12 Conclusion: A Reputation in Relief 727
Primary Sources and Archival Collections 753
What People are Saying About This
In this truly splendid, magisterial study, Carpenter thoroughly documents and narrates the FDA's struggle with the certainties of science, the uncertainties of politics, and the requirements of reputation, an asset that simultaneously granted the agency autonomy and then took it away through ever-increasing expectations of performance.
Richard Bensel, Cornell University
Carpenter has integrated an understanding of the FDA's legal history and programmatic responsibilities with a perceptive grasp of the personalities who shaped that history. His work surpasses in depth and scope all other accounts of the FDA with which I am familiar. No one in the future will be able to write seriously about the FDA's drug approval system without taking account of Carpenter's work. His curiosity knows no limits.
Richard A. Merrill, professor emeritus, University of Virginia, former FDA general counsel, and coauthor of "Food and Drug Law: Cases and Materials"
Deeply researched and subtly conceived, Reputation and Power demonstrates how much our modern system of drug regulation and clinical research owes to the scientific creativity and political skills of federal drug regulators over the past sixty years. It will be the standard work on the FDA for decades to come, while providing instructive lessons for how one can think critically about government regulation without recourse to the ideological lenses of the Left or the Right.
Harry M. Marks, history of medicine, Johns Hopkins University
Reputation and Power is by far the most thorough and penetrating study of the most powerful and important regulatory agency in the worldthe U.S. Food and Drug Administrationand one of the best studies of any American regulatory agency. The book is essential reading for anyone seriously interested in American politics, public policy, administrative institutions, or health and medicine. This is an extraordinary work.
Paul Quirk, University of British Columbia