Walter Russell Meade:

Government regulation is stifling America's vibrant pharmaceutical industry. A recent report by the President's Council of Advisors on Science and Technology estimates that it costs an average of $1.2 billion to win FDA approval and bring a new drug to market. Given that biopharmaceuticals account for roughly two percent of the economy, this is no small matter.

The chief problem is the complex process of clinical trials, in particular "Phase 3," in which a drug is tested and retested to prove its its effectiveness in treating conditions across a broad population. These trials have a strong track record, but they are poorly suited to new biopharmaceuticals, which are often very effective in smaller, targeted groups despite a lower success rate in the public at large. Under the current system, many of these drugs may fail their trials despite their effectiveness when prescribed correctly.

Two industry insiders have proposed a solution in a Bloomberg op-ed: Replace Phase 3 with a market system, allowing patients and doctors to determine which drugs are effective by monitoring the real-world results:

Under our proposed system, the drug could have come to market after promising early-stage research in targeted patients, with appropriate post-marketing studies required. Payers and patients would be the ultimate judge about the quality of the product, and companies could learn from the experience to develop superior products if needed.

Companies would still be liable for unforeseen side effects, but patients and doctors would be warned - through the drug's labeling - that the product had been approved based on promising but provisional research.

Unfortunately, Via Meadia has no doctors on staff, and we aren't equipped to fully evaluate this proposal; this is a complicated business and the devil is in the details. But the broad concept is important. Streamlining regulatory procedures is a way to stimulate the economy and improve lives that doesn't involve more deficit spending.

Obamacare will actually benefit Big Pharma by presenting them with millions of new customers, while keeping the cost of drugs high. But that does little good when the cost of bringing new drugs to the market continues to climb as a result of incresed regulation.

The question will be how safe is safe enough? Those human trials are in place as much to protect the companies as they are the consumer. A fair balance using the market as determinant might break the logjam on some drugs and get them to market quicker.