Earlier this month, the Food and Drug Administration Globalization Act was introduced in the House of Representatives. It seeks to make us all safer, particularly from dangerous food or imported pharmaceuticals. But while efforts to reduce such risks are laudable, trying to eradicate risk is impossible—and may do more harm than good.

Imported medical products can be dangerous. Consider the deaths of 95 Americans last year tied to contaminated heparin, a blood-thinning medication imported from China, or the 2003 recall of more than 18 million counterfeit tablets of Lipitor, Pfizer’s anti-cholesterol drug.

Just Wednesday, the FDA announced that the Indian pharmaceutical giant Ranbaxy had falsified laboratory tests for drugs approved for sale in the United States. FDA is not issuing a recall for any of the products—not one has been shown to be defective or dangerous—but it has suspended review of all drug applications from the company.

More than 5 million Americans import finished medicines from foreign countries, many by purchasing those medicines over the Internet, according to a 2007 survey conducted for the Pharmaceutical Research and Manufacturers of America. American drug companies import more than 40 percent of their pharmaceutical chemical ingredients from India and China, and that amount is rising—according to some estimates, it might reach 80 percent within the next 15 years. Given that untold thousands of Indians and Chinese die from substandard medicines every year, that India has no formal national drug regulatory authority, and that China covers up health scares routinely, U.S. oversight is very important.

Given that untold thousands of Indians and Chinese die from substandard medicines every year, that India has no formal national drug regulatory authority, and that China covers up health scares routinely, U.S. oversight is very important.

Yet the FDA admits that it only inspects 8 percent of foreign drug establishments in any given year, which means that, on average, each plant is inspected only once every 13 years. By comparison, domestic drug plants are inspected once every 2.7 years. The FDA does not even have a comprehensive list of the total number of foreign drug establishments from which American companies and individuals import drugs and intermediates.

To be sure, the United States has quality problems of its own, such as contaminated food and suspect dietary supplements, as evidenced by the FDA’s recent failure to identify salmonella-tainted peanut butter in a Georgia plant. In early February, the Government Accountability Office identified the FDA as one of three “high-risk” areas within the federal government, with “greater vulnerabilities to fraud, waste, abuse, and mismanagement.”

With the agency facing such criticisms, Reps. John Dingell (D-Michigan), Frank Pallone (D-New Jersey), and Bart Stupak (D-Michigan) unveiled the Food and Drug Administration Globalization Act. It would create a registry of all drug and device facilities serving American consumers; increase registration fees for all facilities, foreign and domestic, to finance manufacturing inspections; require the FDA to inspect all foreign and domestic facilities every two years; and equip the FDA with stronger enforcement tools to destroy counterfeit products and prosecute their perpetrators.

More inspections are needed, and the FDA is in dire need of more staff. Still, the legislation would likely increase producer costs and patient prices. A 2007 study by economists at Duke University found that increasing regulatory requirements for medical devices alone would impose an effective tax of $231 million on producers. A 2008 study for the European Commission concluded that eliminating a 0.5 percent share of counterfeit medicines in the European Union would impose a cost of up to $9.3 billion on suppliers, with a net loss to consumers. Faced with higher costs, patients may forgo medicines, resort to alternatives (such as buying from illicit Internet pharmacies), or limit their spending on other essential goods.

The Food and Drug Administration Globalization Act would require the FDA to establish a risk-based system to determine how frequently facilities are inspected. This would allow the FDA to waive the two-year inspection rule when it already had “sufficient information” that a particular facility was up to par. The FDA could then target its inspections more effectively, imposing more inspections (and regulatory expenses) on producers with a history of quality problems and less on others. According to the House bill, the agency would have up to three years to create this risk-based system.

The Government Accountability Office identified the FDA as one of three ‘high-risk’ areas within the federal government, with ‘greater vulnerabilities to fraud, waste, abuse, and mismanagement.’

“In a world of global commerce, perfect defenses against tainted or adulterated drugs are achievable, but at costs few would be willing to pay,” David L. Katz, director of the Yale University School of Medicine’s Prevention Research Center, recently told U.S. News and World Report. “It would require high-volume inspection, strict quality-control standards, and a massively costly surveillance effort to let the good products through, while unfailingly filtering out the bad.”

Despite a few well-publicized failures, and the uncertain quality of many medicines bought over the Internet, U.S. corporations and the FDA have done a good job of safeguarding America’s drug supply. Far less than 1 percent of drugs in the United States are considered counterfeit. The FDA has already begun to improve its overseas inspections, opening a satellite office in China and planning to open more in India, Latin America, and elsewhere.

So is the new legislation really necessary or desirable? That depends on how one balances the risks posed by the FDA’s current shortcomings against the risks posed by excessive regulation. Congress should take time to assess whether the bill is too precautionary before passing it into law.

Roger Bate is the Legatum Fellow in Global Prosperity at the American Enterprise Institute and the author of Making a Killing, a book about counterfeit drugs. Karen Porter is a research assistant at AEI and an editorial assistant at THE AMERICAN.

Image by Darren Wamboldt/The Bergman Group.