The FDA’s New Leaders Can Unleash Innovation

Streamlining effectiveness evaluations à la Operation Warp Speed would unlock trillions in economic value

By By Tomas J. Philipson. Excerpts:

"Cutting a year off the FDA’s decade-long approval process would generate about $10 trillion in economic value, according to a new study"

"speeding up development by one to six years for FDA-approved medical products (small-molecule drugs, biologics and medical devices) would unlock between $10 trillion and $49 trillion in economic value."

"If you are willing to pay $100 to brush your teeth for a year but a toothbrush costs $5, the multiple of consumer gains above price is 20. A substantial base of economic evidence puts this multiple around 15 for medical products, which had aggregated U.S. net sales of about $676 billion in 2024. Multiply these sales by 15 and you get into multiple trillions"

"effectiveness trials that provide evidence on how well medical products work for an imaginary average patient, as opposed to real heterogeneous patients who differ in their assessments of the risks and rewards. This one-size-fits-all clearance applies to products already proven safe."

"The FDA could unleash trillions in value by taking six steps to shorten effectiveness assessments, akin to the methods of Operation Warp Speed during Covid-19."

"Under current procedures, once a product is cleared for safety, the FDA can take up to a decade to establish effectiveness for one particular use of a drug. But it then allows the private sector to judge effectiveness for subsequent off-label uses."