Fiddling while rome burns: 64 dead, 741 sick, and Cass Sunstein’s dangerous love affair with cost-benefit analysis

Former (de)regulatory czar Cass Sunstein is back, full of advice on how to run the government from his perch as a Harvard law professor. In a "View" column for Bloomberg News entitled "Left and Right Are Both Wrong About Regulation," Sunstein urges his former allies and enemies to redouble their efforts to "look back" at old rules. He claims that forcing agencies to rummage through their closets in search of bad rules has already saved "billions of dollars," although the only tangible example he offers is the recent Federal Aviation Administration (FAA) decision to allow people to use electronics on airplanes - popular, to be sure, but probably not such a plus for the economy. Sunstein is deaf to any perspective on the regulatory state other than his deeply held prejudice that it is over-regulating and must be choke-chained through the zealous application of cost-benefit analysis. As he did when he held the tight-collared short leashes of the regulatory agencies from his corner office at the White House, he ignores the many recent public health crises that tougher rules would have prevented. Consider, for example, the 2012 meningitis outbreak that sickened 741 and killed 64 people in 20 states. In the early fall of that year, people began to die from virulent infections after receiving spinal injections of methylprednisolone, a steroid drug used to relieve back and shoulder pain. Suspicious doctors discovered that the injections originated at the New England Compounding Center (NECC) in Framingham, Massachusetts. The company, which had been in trouble with federal and state regulators repeatedly for more than a decade, is sadly representative of serious problems within this industry. When federal and state inspectors inspected 31 "high-risk" compounders in 18 states last April, 28 got Form 483's - FDA-speak for bad conduct reports. All were engaged in abuses from mixing drugs in "clean rooms" contaminated by mold to getting the composition of medications wrong. Yet compounders are regulated by state pharmacy boards that are ineffective. Companies are not required to register with the federal government, and the Food and Drug Administration's (FDA) authority to prevent them from selling adulterated drugs is hamstrung by recent court decisions. As she withstood blistering condemnation of House Republicans, FDA Commissioner Margaret Hamburg begged her congressional overseers to give her agency the tools needed to police the industry. Compounders provide 40 percent of intravenous medications used in hospitals, up from 16 percent just a decade ago. If NECC is not a rogue company but rather a typical example of how fast and loose practices allowed this industry to grow by leaps and bounds, we're in big trouble. Yet, when Congress reared up on its tiny hind legs to address this crisis, it passed a shamefully weak law that would let compounders choose whether they wanted to register with the FDA and be regulated, or whether they preferred to do business as usual. The magical thinking behind this approach is that market forces will compel reputable companies to register. Sunstein never says a word about such episodes. Instead, he urges the President and Congress to assign agencies like the FDA to double-down on elaborate calculations that purportedly measure whether the benefits of protecting public health might be outweighed by the costs of imposing such requirements on industry.