When You Make Medical Progress Illegal, What Results is a Black Market in Medical Progress

I note a symptom of the highly restrictive FDA regulations on development of clinical therapies:

The indictment alleges the four distributed stem cells and other biological products without federal Food and Drug Administration approval, and for unapproved treatments of cancer, amyotrophic lateral sclerosis, multiple sclerosis, and Parkinson's Disease. ... Court records unsealed Wednesday show that the scheme made more than $1.5 million in sales between January 2007 and April 2010, from procedures Morales performed in Mexico on patients he met in the United States.

This is the standard situation: when regulation makes it impossible to meet demand or to try to develop and offer meaningful products, a black market will arise. That market will be less transparent, more costly, and less effective at delivering quality products than a free market would be in the absence of regulation. A black market will also tend to attract a larger contingent of sellers willing to commit fraud than would otherwise be the case, as the buyers have lower chances of success in any legal action or other means of forcing restitution.

So these fellows may be frauds, or they may be legitimate businesspeople trying to operate a medical tourism business, offering services that are perfectly legal - and even admirable - outside the US, while within the US forthright invention and competition in medicine is pretty much forbidden. Either way, other would-be legitimate businesspeople are going to look at this and think twice about trying to make the world a better place by offering better medical services.

So it goes. The FDA and its legal penumbra are monstrosities that distort all of the usual incentives involving profit and progress, and steer them towards bad ends. The FDA must go if we are to see progress in medicine that approaches the pace of progress in less regulated industries like computing.

There is a very simple solution to the problems of medicine. It's called freedom: freedom for providers to develop and compete as they see fit, and freedom for people to choose or reject their offerings with the money in their own pockets and savings accounts. For progress and efficiency to reign in an industry, people have to pay for goods with their own funds, and providers have to be free to innovate. Competition and the care with which people manage their own money keeps both sides as honest as any human culture is going to be.

Look at fashion. Shoes. Computers. DNA sequencing. Or any one of a thousand other important goods whose value has fallen over time and continues to do so. These are less regulated markets, not stifled and buried beneath chains like the provision of medicine. They are vibrant, constantly innovating and competing, and this is exactly because people pay for these products with the money they care about most.


Thanks for your comments Reason. As I recently told a friend of mine who complains alot about not finding a job but does not do anything about it (such as making yourself more maketable), focus on action.

Maybe we need to have someone who is well known and with funds available to push for FDA to relax on the regulations. Someone who is supportive of DeGray ideas such as Peter Thiel could be very helpful in this regard along with a political figure. If this political figure would say, we need to cure cancer more quickly and to do this, we need to relax regulations, this would be the beginning of getting the FDA to lighten up.

Posted by: Robert Church at December 29th, 2011 10:02 PM

If the FDA would not interfere with the practice of medicine and let patients decide with their own doctors about whether stem cell treatment might benefit them, then legitimate clinics would open up across the nation. This would eliminate the shysters and con artists that prey on those of us that are seriously ill. I have been taken more than once with false promises and hype. Stem cell treatments are not without risk. There is a lot of money to be made and all it takes is a website and a little marketing to do it. This story isn't about kindly doctors and others trying to help sick people. It's about money. The FDA has forced patients to take risks to try to save their lives or improve them. We need to be able to work through our own physicians and be given a wide choice of clinics to go to for treatment. The FDA's regulations are doing more harm than good as pointed out. Competition will weed out the hucksters making treatment safer and better.

Posted by: Pat at January 1st, 2012 9:49 PM

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