What's the "Interest" in FDA Drug Advisory Committee Conflicts of Interest?

Joseph Golec and John Vernon

No 14932, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Food and Drug Administration (FDA) drug advisory committee members sometimes have financial interests tied to drug companies. Congress and the public have become concerned that these financial interests lead to conflicts of interest. They conclude that the conflicts bias committee recommendations, and lead to unsafe or ineffective drugs being approved for public consumption, or, conversely, delays in approval of safe and effective drugs. Our paper provides empirical evidence, based on an event study methodology, that advisory committee meetings lead to weak or statistically insignificant effects on stock prices and hence equity values of regulated companies assumed to be affected by the particular matters coming before committee meetings.

JEL-codes: G14 G38 I11 I18 I28 (search for similar items in EconPapers)
Date: 2009-04
Note: EH
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