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Black Box Warnings and Drug Safety: Examining the Determinants and Timing of FDA Warning Labels

Author

Listed:
  • Allan Begosh
  • John Goldsmith
  • Ed Hass
  • Randall W. Lutter
  • Clark Nardinelli
  • John A. Vernon

Abstract

Comparing the safety of prescription drugs over time is difficult due to the paucity of reliable quantitative measures of drug safety. Both the academic literature and popular press have focused on drug withdrawals as a proxy for breakdowns in the drug safety system. This metric, however, is problematic because withdrawals are rare events, and they may be influenced by factors beyond a drug's safety profile. In the current paper, we propose a new measure: the incidence and timing of Black Box Warnings (BBWs). BBWs are warnings placed on prescription drug labels when a drug is determined to carry a significant risk of a serious or life-threatening adverse event. Using a unique data set, one that includes all new molecular entities (NMEs) submitted to the FDA between May 1981 and February 2006, and subsequently approved and marketed, we analyze the timing and incidence of BBWs. Our analyses also use data on several drug characteristics likely to affect the probability a new drug will receive a BBW. We draw several conclusions from our analyses. For example, drugs receiving priority FDA review are more likely to have BBWs at the time of approval than NMEs receiving standard review. We also find that early prescription volume and orphan drug status are associated with an increased likelihood of receiving a BBW. We do not, however, find a significant difference in the rate of BBWs across time cohorts. A comparison of NMEs approved before and after the 1992 Prescription Drug User Fee Act (PDUFA), which authorized the payment of user fees from drug manufacturers to the FDA in an effort to expedite new drug application (NDAs) review times, did not reveal a statistically significant difference in the rate of BBWs. Critics of PDUFA maintain that reduced FDA-approval times under PDUFA have compromised drug safety. We do not find empirical support for this contention.

Suggested Citation

  • Allan Begosh & John Goldsmith & Ed Hass & Randall W. Lutter & Clark Nardinelli & John A. Vernon, 2006. "Black Box Warnings and Drug Safety: Examining the Determinants and Timing of FDA Warning Labels," NBER Working Papers 12803, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:12803
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    References listed on IDEAS

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    1. Berndt Ernst R. & Gottschalk Adrian H. B. & Philipson Tomas & Strobeck Matthew W., 2005. "Assessing the Impacts of the Prescription Drug User Fee Acts (PDUFA) on the FDA Approval Process," Forum for Health Economics & Policy, De Gruyter, vol. 8(1), pages 1-25, January.
    2. Tomas J. Philipson & Ernst R. Berndt & Adrian H. B. Gottschalk & Matthew W. Strobeck, 2005. "Assessing the Safety and Efficacy of the FDA: The Case of the Prescription Drug User Fee Acts," NBER Working Papers 11724, National Bureau of Economic Research, Inc.
    3. Mary K. Olson, 2002. "Pharmaceutical Policy Change and the Safety of New Drugs," Journal of Law and Economics, University of Chicago Press, vol. 45(S2), pages 615-642.
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    Cited by:

    1. W. Kip Viscusi & Richard J. Zeckhauser, 2015. "Regulating Ambiguous Risks: The Less than Rational Regulation of Pharmaceuticals," The Journal of Legal Studies, University of Chicago Press, vol. 44(S2), pages 387-422.
    2. Ali Shajarizadeh & Aidan Hollis, 2015. "Price‐cap Regulation, Uncertainty and the Price Evolution of New Pharmaceuticals," Health Economics, John Wiley & Sons, Ltd., vol. 24(8), pages 966-977, August.
    3. Tannista Banerjee & Arnab Nayak, 2017. "Why trash don’t pass? pharmaceutical licensing and safety performance of drugs," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 18(1), pages 59-71, January.
    4. Philipson, Tomas & Berndt, Ernst R. & Gottschalk, Adrian H.B. & Sun, Eric, 2008. "Cost-benefit analysis of the FDA: The case of the prescription drug user fee acts," Journal of Public Economics, Elsevier, vol. 92(5-6), pages 1306-1325, June.
    5. Olson, Mary K., 2008. "The risk we bear: The effects of review speed and industry user fees on new drug safety," Journal of Health Economics, Elsevier, vol. 27(2), pages 175-200, March.

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    More about this item

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • K2 - Law and Economics - - Regulation and Business Law
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • K32 - Law and Economics - - Other Substantive Areas of Law - - - Energy, Environmental, Health, and Safety Law

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