Essays on the Persistence of Capture Theory: The Food and Drug Administration

What determines the decisions taken by the Food and Drug Administration? Does the agency have the public interest in mind? Or is it captured by the numerous interest groups that attempt to influence the regulations? Multiple theories have been developed to understand the motivation behind the decisions taken by the regulatory agencies. Despite this, scholars have remained divided among different school of thought. This study is an attempt to provide clarity to this debate. The results of this study show the working of the Capture Effect in the Food and Drug Administration. In order to test this theory, I analyze three unique channels of influence utilized by the regulated pharmaceutical entities. Existing studies that have denied the presence of capture have looked at only the internal dynamics of the FDA. They have not incorporated the role of government in the whole process. The first paper addresses this gap and examines the impact of campaign contributions on the bills sponsored by the members of Congress. The result reveals a positive and significant effect of campaign contributions on bill sponsorship. The second paper examines the direct effect of lobbying on the drug applications approved by the Food and Drug Administration. The analysis reveals that lobbying contribution and certain lifesaving drugs (i.e., cancer and HIV medication) are a deciding factor in the drug approval process. In my third paper, I incorporate the role of institutions in the channels of influence utilized by the regulated companies. The analysis reveals that pharmaceutical company is successful in influencing the FDA when it lobbies both during the rulemaking phase and executive branch review of the rules.