The prescription monopoly.

Graham, John R.

In a recent article ("Who Certifies Off-Label?" Summer 2004), professors Daniel Klein and Alexander Tabarrok report the apparently contradictory result of their poll indicating that the majority of prescribing physicians oppose increasing regulations respecting off-label prescriptions, but approve of regulations respecting safety and efficacy of initial, on-label uses of prescription medicines.

The answer to this riddle may lie within the incentives physicians face as members of a monopolist professional class. Physicians' monopoly over prescribing drugs is a privilege for which their predecessors struggled. One would hope that they would take upon themselves the responsibility of regulating and managing appropriate prescribing.

This would perhaps take place through medical associations forming non-profit testing laboratories, funded partly through levies on their members and partly by fees paid by drug makers seeking certification.

Currently, such certification is provided by the FDA, paid partly by drug makers and partly by taxpayers. Thus, physicians have been able to socialize (most of) the costs, while privatizing the gains, of their privileged position.

JOHN R. GRAHAM,

Adjunct Scholar, Fraser Institute