J.D./Ph.D. candidate in Law and Economics, Elissa Philip Gentry, successfully defended her dissertation, “Safety and Effectiveness: The FDA’s Approach to Risk in Prescription Medication.” After six years of study, Gentry will graduate with both her J.D. and her Ph.D. in Law and Economics at Commencement in May. Gentry’s advisor is University Distinguished Professor W. Kip Viscusi. Professors James Blumstein, Melinda Buntin, and Daniel Gervais comprise the rest of her dissertation committee.
Summary of dissertation
The Food and Drug Administration (FDA) generally regulates the risks associated with pharmaceutical products; however, some drug uses are not directly regulated, and appropriate usage is left to the physician’s discretion. These risks can often be ambiguous or uncertain. In this dissertation, I study how consumers respond to ambiguity in pharmaceutical risk. I also examine two areas where risk is either not directly regulated or is perceived to be insufficiently regulated—I study whether patients, physicians, and third-party payers are sensitive to these risks or whether further regulation would be preferable. This dissertation begins by using an incentivized experiment to empirically estimate participants’ reactions to ambiguity in risks that a drug is unsafe or ineffective in the presence of framing effects. This dissertation then concentrates on two areas where risk is not directly regulated: narrow therapeutic index (NTI) drugs, drugs for which the generic approval process has been suspected to be inadequate in ensuring therapeutic equivalence, and off-label uses, the prescription of a drug for an unapproved use. The second chapter examines NTI drugs and tests whether a price penalty is observed for the extra risk associated with NTI drugs. The third chapter looks at off-label uses, and examines whether inappropriate off-label uses are relinquished even in the absence of direct FDA regulation.