

VC: Rumors of Its Non-Brokenness are ... Wrong - cwan
http://paul.kedrosky.com/archives/2010/12/vc_rumors_of_it.html

======
lkrubner
It is unfortunate that, in the USA, the FDA and EPA keeps such a heavy lid on
innovation in the biotech sector. Whereas the tech industry had the luck of
being allowed to run relatively free for 50 years, the biotech industry needs
to get approval for anything it might want to do. It seems to me likely that
at some point in the 21st century the biotech sector might lead a revolution
in the economy similar to what the tech sector was able to achieve 1960-2000,
but sadly, the biotech sector faces so many checks and limits, that the pace
of innovation will probably not be allowed to ever match what the tech sector
achieved in the past.

Some have argued that the FDA needs to heavily regulate everything in biotech,
so as to protect lives, but this argument cuts 2 ways - the heavy regulation
also freezes out a certain amount of innovation that would also save lives.
More so, the FDA insists that any treatment that is approved must work for a
known illness, and it has steadfastly refused to define "aging" as an illness,
so no business can go after aging by itself and have any hope of meeting with
regulatory approval. And aging is a major contributor to illness and death.

More so, the biotech industry includes a lot of areas of research that have
nothing to do with human health, but these other applications of the
technology tend to run into the regulatory limits of the EPA. Genetically
engineered bacteria that can break down various toxins are useful, and have
been approved. Genetically engineered organisms that have novel applications
would have to work their way through an approval process that might take many,
many years. All of this raises the costs of accomplishing anything. Millions
of dollars get spent on lawyers, who haggle with the regulatory authorities -
we can only dream of how much good might be accomplished if that money could
be spent on research.

There are, of course, good arguments why these regulatory agencies should
exist, but since they exist, they also must defend their legitimacy, which
leads them to often exaggerate the dangers that they are, in theory,
protecting us from. Thus defenders of the FDA paint a grim picture of what
life would be like without it. And yet, the FDA, like any regulatory body,
tends to be staffed by people who come from the industry that it is
regulating, and so, over time, the FDA tends to develop a viewpoint in keeping
with the industry. This is known as "regulatory capture". The worst aspect of
this is that the regulatory bodies come to identify with the established
players in an industry, while looking upon newcomers with a certain amount of
unearned wariness.

The combination of regulatory capture and wariness of newcomers leads to
situations where the FDA is slow to act against reports of e coli at a plant
owned by a well known meat producer, while at the same time, acting slowly to
allow novel uses of, say, stem cells to repair damaged tissues. Thus people
die from those very things that the FDA was first enacted to protect us from
(food poisoning - the FDA was created in part by public revulsion to what the
public read in Upton Sinclair's novel, The Jungle), while at the same time the
FDA "protects" people from novel treatments that might save lives.

