NCJ Number
50948
Date Published
1978
Length
6 pages
Annotation
THE CHARACTERISTICS OF FEDERAL PRODUCT SAFETY REGULATORY CONTROLS AND THE PERFORMANCE OF THE TWO PRINCIPAL AGENCIES ENGAGED IN PRODUCT SAFETY REGULATION ARE REVIEWED.
Abstract
SINCE 1960, CONGRESS HAS PASSED A NUMBER OF LAWS IMPOSING AND STRENGTHENING FEDERAL REGULATORY CONTROLS ON PRODUCT SAFETY IN A VARIETY OF MARKETS--FOOD, DRUGS, AUTOMOBILES, TOYS, FABRICS, PAINTS, ETC. IN DRAFTING AND FUNDING PRODUCT SAFETY LEGISLATION, CONGRESS HAS FAVORED DIRECT REGULATORY CONTROLS (E.G., PRODUCT STANDARDS, PREMARKET APPROVAL, PROHIBITIONS OF VERY RISKY PRODUCTS, ETC.) OVER ALTERNATIVE POLICIES (E.G., DISSEMINATION OF INFORMATION ABOUT PRODUCT SAFETY HAZARDS, ECONOMIC INCENTIVES FOR MANUFACTURERS). REGULATORY AGENCIES HAVE DEMONSTRATED A STRONG 'SAFETY IMPERATIVE'; I.E., DECISIONMAKERS HAVE RESISTED THE NOTION THAT THE BENEFITS OF GREATER SAFETY STEMMING FROM A POLICY MUST BE WEIGHED AGAINST THE COSTS THAT MIGHT BE ENTAILED BY THAT POLICY. THERE HAS BEEN LITTLE EFFORT TO DESIGN REGULATORY POLICIES THAT COMPLEMENT EXISTING MARKET AND LEGAL INCENTIVES. THERE IS EVIDENCE TO SUGGEST THAT PRODUCT SAFETY STANDARDS AND REGULATIONS CAN RESULT IN SIGNIFICANT UNINTENDED SIDE EFFECTS ON THE LONG TERM COMPETITIVE STRUCTURE OF AN INDUSTRY. FOR EXAMPLE, THE INCREASED REGULATION OF THE PHARMACEUTICAL INDUSTRY SINCE 1962 APPEARS TO HAVE RESULTED IN A MUCH GREATER CONCENTRATION OF INNOVATION AMONG THE LARGEST DRUG FIRMS. SUPPORT FOR THESE OBSERVATIONS IS FOUND IN A REVIEW OF THE REGULATORY ACTIVITIES OF THE CONSUMER PRODUCT SAFETY COMMISSION AND THE FOOD AND DRUG ADMINISTRATION. IT IS CONCLUDED THAT, UNLESS GOVERNMENT CHANGES ITS SAFETY IMPERATIVE APPROACH TO PRODUCT SAFETY REGULATION, PROBLEMS OF RESOURCE MISALLOCATION WILL MULTIPLY AS REGULATORY CONTROLS ARE EXTENDED TO MORE AND MORE INDUSTRIES. A LIST OF REFERENCES IS INCLUDED. (LKM)