A case for the enabling power of regulations

Businesspeople may gripe about regulatory burdens, but regulations of all kinds enable us as consumers to lead our busy lives.

It's not really about safety, but more about trust. With enough trust, consumers don't stop to assess the risk of many of the products they buy, even exotic products like injectable pain medications.

"The fundamental problem we have is that we live in a very complicated social and economic context, with lots of different kinds of products we need to live our lives," said John Eighmey, a leading authority on brand communications at the University of Minnesota's School of Journalism and Mass Communication. "And there is no way we as ordinary individuals can have the professional expertise for each one of the industries from which we might buy a product."

The appalling case of a contaminated injectable pain drug from New England Compounding Center in Massachusetts, which has sickened hundreds and killed at least 21, serves as a reminder of why there are product safety regulations.

But medications make up only a small part of the portfolio of regulated products we buy.

When is the last time that you picked up a pizza slice and wondered whether it was contaminated with bacteria? Odds are extremely low that it was, but it's unlikely the odds are zero.

That's why a tour of a pizza processing plant may lead past the office of the U.S. Department of Agriculture inspector, who is there every day.

It's certainly a different decision than it was for consumers in 1929. Regulators have been heavily involved in banking since the Great Depression, after an avalanche of bank failures wiped out depositors and nearly brought down the banking system.

And how many of us consider the airworthiness of an airliner as we step aboard for a business trip?

A former client of mine who made capital equipment for airliner maintenance once explained that every screw that gets tightened on a commercial airliner needs two mechanics: one to turn the screwdriver, and the other to note it on a clipboard.

None of this is to suggest that regulatory agencies are uniformly fair and effective in their work. But the regulatory structure across the board has held up well enough that, presumably, no one who agreed to be injected with a steroid to control pain would ever have suspected that it might be contaminated.

Investigations are just beginning into what happened at New England Compounding Center, the source of the contaminated steroid medication, but many American consumers are for the first time learning about compounding pharmacies, which have had a traditional role in making medications for individual patients.

David Dausey, a professor and director of the Mercyhurst Institute for Public Health in Pennsylvania, frequently speaks on outbreaks of food-borne illness and other consumer risks. He holds the view that consumers routinely overestimate the effectiveness of regulators.

That's why, he said, whenever there is an incident "and people actually die, their family members are just absolutely shocked," Dausey said. "They ask, 'How could something like this actually happen?'"

John Eighmey began our conversation on the effects of regulation on consumer choice by observing that "trust is everything."

Eighmey described a progression of ever more complicated purchase choices, beginning with a "convenience good," one that we pick up without really thinking.

A pizza slice may be one, and one thing that makes it a convenience good is the consumer's unconscious assumption that it's safe.

Moving up the scale from there leads to decisions about any number of products or services that just are too complicated for ordinary folks to figure out on their own.

Even late-model automobiles are moving into that category, Eighmey said, for opening up the hood on a car reveals a machine so technically sophisticated that troubleshooting or do-it-yourself repair is beyond the ability of nearly everybody.

'The principle of least effort'

Eighmey said that in choosing among these more complicated products, consumers rely on the advice of professionals, such as a physician. They choose a brand they know and trust. They sleep with the knowledge that products are regulated for safety.

"If you step back and put all of this in a broader context," Eighmey said, we all "lead busy, complex lives. When we make purchase decisions, we really follow the principle of least effort. We have other things to do, so we rely on brand names or we rely on the assumption of regulation. That is what makes a productive daily life possible. Otherwise we would just get bogged down in making personal assessment after personal assessment."

In the aftermath of the New England Compounding Center scandal, regulation of large drug compounding firms will almost certainly be beefed up.

Hopefully, any new oversight or regulations will be fair and transparent and not overly burdensome to businesspeople who have served their pharmacy customers well for years.

But we need to know that all of our drugs, and all of our other product choices, are safe. That's the only way we're able to go to work and get on with our lives.

We can't seem to even think about the alternative.