The abortion pill ruling is a disaster for innovation everywhere

Imagine for a moment that Danco Laboratories made widgets, instead of mifepristone, the abortion drug now on the front lines of the US culture wars.

Strip away the angry rhetoric about bodily integrity and unborn babies and focus on what has happened to this New York-based company’s basic livelihood over the past two weeks.

A Texas-based federal judge in effect banned all sales of its only product by rescinding regulatory approval granted more than 20 years ago. An appeals court stayed that ruling but imposed restrictions that require entirely new packaging and change where and to whom the product can be sold. A third federal court in another part of the US ordered Danco to keep selling the product as it is and prevented it from making any changes.

Emergency appeals to the US Supreme Court routinely use hyped-up language, but Danco really is facing “regulatory chaos” that has thrust the company into “untenable limbo” and “uncharted waters”. The justices are expected to rule on Wednesday whether to put all the rulings on hold while the company appeals.

Those engaged in less fraught lines of business may be tempted to dismiss Danco’s woes as having nothing to do with them. But this judicial intervention should send chills down the spine of anyone working in a regulated industry. It undercuts the administrative expertise and legal certainty that are essential for innovation.

Founded in the 1990s after larger pharma groups refused to take on mifepristone, Danco has long faced pressure from anti-abortion groups. The company uses a postal box as its mailing address, manufactures overseas and keeps the names of its investors and top executives secret. More than 5mn women have used the pill in the US since Danco steered it through the Food and Drug Administration’s approval process in 2000 and a series of later decisions that gradually expanded access. Most recently, the FDA ruled the pill could be sold in retail pharmacies. Medical abortions now account for more than half of the procedures nationwide.

Then, in early April, a Texas judge appointed by Donald Trump ordered the FDA to revoke its original 2000 approval. According to the Biden administration, the decision marks the first time in the agency’s nearly 100-year existence that its scientific judgment on safety has been overridden by a US court.

Relying largely on anecdotal evidence, Judge Matthew Kacsmaryk cut the legs off the globally respected US system for approving medicines and dealing with reported side-effects. The judge ruled that healthcare workers who personally oppose abortion had the standing to bring the case because they might at some point have to treat a patient who had taken mifepristone. That flies in the face of generations of decisions that require plaintiffs to have been personally harmed by a government action.

The Texas judge also found the FDA approval process was inadequate because the clinical trials did not explicitly include some real-world uses of the drug, and held that the 2000 approval could be retroactively challenged because Danco had restarted the clock when it sought to expand access in 2016 and afterwards.

A coalition of drugmakers and investors wrote in a legal brief supporting Danco that if such rules had been applied to other drugs “it is unlikely that a single one would have been approved — or that their approvals would have gone unchallenged — and countless patients would have suffered needlessly”.

Without a predictable process for drug approvals and dealing with health concerns that arise later, the US will become a far less hospitable place for drug development. This is a disaster not just for American patients, who will be deprived of early access to new medicines, but for the entire world because the US is the most important healthcare market and a major driver of global innovation.

Currently, the US receives 68 per cent of global biotech investment, according to the industry group Bio, and half of the top 20 biggest spenders on pharma research and development last year were American companies.

Kacsmaryk may eventually be overturned. But the fact that he was willing to support such an attack on the FDA should trouble not just drugmakers but every industry that relies on regulatory approvals. If anyone can retroactively challenge a government agency’s expert decision at any time, the risks rise around backing anything new, from gas pipelines and self-driving cars to financial products and vaccines.

The last thing a divided country already addicted to lawsuits needs is an open invitation to file more of them.

Follow Brooke Masters with myFT and on Twitter

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