Wednesday, February 27, 2013

How Government Regulation Hinders Product Oversight and Harms Consumers

The tragic case of the tainted medication produced by New England Compounding Center, which resulted in at least twenty-five deaths and hundreds sickened, highlights a little-recognized danger inherent in government regulation.

What is that danger? Find out by reading the rest of my Objective Standard blog post Government Regulations Hinder Quality Control and Harm Consumers

I would add this:

In a free market, there would be no assumption of a government seal of approval. Every patient and doctor, rather than a handful of government bureaucrats, would effectively be his own industry watchdog to whom private ratings companies would be all too ready and willing to provide a wealth of information on products and companies. That's a lot of oversight.

In the NECC case, the company’s deteriorating manufacturing quality went undetected in the market until hundreds were sickened and dozens died. The false sense of security that infects the market, as evidenced by that Maryland doctor, is a prime factor in this tragedy. In an unregulated market, where the principle “buyer beware” rules and buyers know it, incompetent companies like NECC would be quickly exposed, rather than allowed to slip “under the radar.”

This catastrophe is seen as stemming from lack of regulation, rather than from the very nature of the government regulatory apparatus itself. But as the NECC case shows, government regulation hinders rather than enhances product oversight, potentially harming the very patients the FDA is supposed to protect.

Related Reading:

"Regulating Business"--the Good and the Bad

Don’t Regulate the Innocent, Punish the Guilty

Where Does Valid Law End and Regulation Begin?

What is Objective Law?, by Harry Binswanger

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