Slow and Steady Wins the Race: Why the Medical Device Approval Process Might be Better in the United States than in the European Union
Chart of the day
The conclusion of a study in the American Economic Review by LDI Senior Fellow Matthew Grennan and Robert Town might surprise you: in the case of stents, the slower, more rigorous process that the FDA requires for getting a device to market may actually be better than the faster process used in the European Union.
The US holds medical device manufacturers to a “safe and effective” standard, while the European Union (EU) has a lesser, “safe” standard. The chart above shows the natural consequence of these differing standards: stents that make it to market in the US have more evidence, with about 85% having undergone a published clinical trial, compared to just 20% in the EU. On the other hand, the EU has access to more products, earlier. Over the course of the study, EU consumers had 109 stents on the market in total, compared to 21 in the US.
The surprise is that the optimal level of regulation, as measured by an estimated model that balances the benefits of more access against the risks of less information, is much closer to the FDA’s process than the EU’s. Grennan and Town show that EU consumers have a lot to gain from the additional evidence of effectiveness available in the US.
We highlighted an earlier version of this research in a previous blog post, and it continues to be highly relevant to ongoing debates about access to new technology and postmarketing surveillance internationally. The full paper is here, and a good summary of it on the American Economic Association site is here.
Matthew Grennan, PhD is an Assistant Professor of Health Care Management at The Wharton School and an LDI Senior Fellow. Robert Town, PhD is the James L. and Nancy Powell Centennial Professor of American Economic Principles at the University of Texas-Austin.