1: The Food and Drug Administration

I. The Food and Drug Administration

The Food and Drug Administration (FDA) is a federal agency within the Department of Health and Human Services (HHS), an executive agency with a Commissioner and a budget of $7.2 billion in 2024 (an increase of $500 million from 2023).1Food and Drug Administration, “FY2025 FDA Budget Summary,” 2025, https://www.fda.gov/media/176923/download?attachment. By comparison, the FTC, the agency responsible for enforcing the consumer protection and competition laws that have dominantly constituted AI regulation in the US, had a total budget of $430 million in 2023.2Federal Trade Commission, “Budget and Strategy,” June 7, 2013, https://www.ftc.gov/about-ftc/budget-strategy. The FDA’s mandate and scope is broad in nature: it is the primary public health agency responsible for the safety, efficacy, and security of human and veterinary drugs, biological products, and medical devices; as well as the food supply, cosmetics, and products that emit radiation.3Office of the Commissioner, “What We Do,” Food and Drug Administration, November 15, 2023, https://www.fda.gov/about-fda/what-we-do. In this report, we focus more specifically on the oversight process for pharmaceuticals, a domain in which the FDA generally exerts considerable influence over industry. However, the FDA has direct oversight over specific implementations of medical AI systems in its regulation of medical devices; the Ada Lovelace Institute’s report Safe before Sale gives an overview of the FDA’s medical-device process and lessons for AI governance.4Merlin Stein and Connor Dunlop, Safe before Sale: Learnings from the FDA’s Model of Life Sciences Oversight for Foundation Models, Ada Lovelace Institute, December 13, 2023, https://adalovelaceinstitute.org/report/safe-before-sale.

II. History of the FDA as a History of Public Scandals

The pharmaceutical sector is a particularly high-investment industry, and one in which products pose high levels of risk both to individuals and to public health. Historically, the production and sale of drugs was largely unregulated until the late nineteenth century, and much of this nascent drug industry was opaque to consumers. The Department of Agriculture’s Division of Chemistry was the primary predecessor to the FDA,5John P. Swan, “How Chemists Pushed for Consumer Protection: The Food and Drugs Act of 1906,” Chemical Heritage 24, no. 2 (Summer 2006): 6–11, https://www.fda.gov/files/about%20fda/published/How-Chemists-Pushed-for-Consumer-Protection–The-Food-and-Drugs-Act-of-1906.pdf. but a series of scandals—followed by the passage of legislation by Congress—set the stage for stronger regulatory intervention, including the following:

• 1906 Pure Food and Drug Act. This was the first of a series of laws passed in response to concerns about “patent medicine” and the use of dangerous ingredients in drugs sold to consumers, revealed through muckraking exposés by journalists. It assigned to the Division of Chemistry responsibilities for enforcing labeling requirements for drugs, whereby variations from a standard form had to be acknowledged on the label.6This early authority gave the FDA the ability to regulate claims that manufacturers made about drugs. Because this model proved inadequate to protect the public, the FDA was given greater authority over time to regulate the products themselves. (Thanks to Chris Morten for this note.) See “Part I: The 1906 Food and Drugs Act and Its Enforcement,” Food and Drug Administration, April 24, 2019,https://www.fda.gov/about-fda/changes-science-law-and-regulatory-authorities/part-i-1906-food-and-drugs-act-and-its-enforcement. It is also widely considered to be the law establishing the FDA, though the agency was not known by that name until almost 25 years later. 
• 1938 Food, Drug, and Cosmetics Act. This legislation was passed in response to the scandal of sulfanilamide elixir poisoning causing the deaths of more than a hundred people, including children.7Philip R. Lee and Jessica Herzstein, “International Drug Regulation,” Annual Review of Public Health 7 (1986): 217–35, https://www.annualreviews.org/content/journals/10.1146/annurev.pu.07.050186.001245. The Act prohibited drugs from being marketed unless the manufacturer submitted an application to the FDA proving their safety.
• 1962 Amendment to the Food, Drug, and Cosmetics Act. This amendment introduced efficacy into the FDA’s purview, following the thalidomide disaster in which a drug designed to reduce morning sickness in pregnant people led to life-threatening birth defects. The FDA’s refusal to approve the drug, previously approved in other countries, “deeply shaped the public’s perception of the Agency, and helped justify significant expansions in its regulatory authority.”8Amy Kapczynski, “Dangerous Times: The FDA’s Role in Information Production, Past and Future,” Minnesota Law Review 102 (July 2018), https://scholarship.law.umn.edu/mlr/130. 
• 2007 Food and Drug Administration Amendments Act. This bill introduced a number of amendments, most significantly by mandating transparency both from the FDA and from regulated companies. It required that the FDA share the analysis underlying its decisions to approve new drugs, and that drug companies share some of their own data with the public.9See Christopher J. Morten, Gabriel Nicholas, and Salomé Viljoen, “Researcher Access to Social Media Data: Lessons from Clinical Trial Data Sharing,” Berkeley Technology Law Journal 39, no. 1 (April 2024): 109–204, https://doi.org/10.15779/Z38QF8JK81; Matthew Herder, Christopher J. Morten, and Peter Doshi, “Integrated Drug Reviews at the US Food and Drug Administration—Legal Concerns and Knowledge Lost,” 180(5) JAMA Intern Med 629-30 (March 2, 2020), doi:10.1001/jamainternmed.2020.0074; and Food and Drug Administration, “FY2025 FDA Budget Summary.” This helped foster an information ecosystem that exists both within and beyond the FDA: companies must generate information on their products to share with the FDA, and both parties must share some of this information with the broader public.10Thanks to Chris Morten for this point.
• The FDA has undergone many other administrative, funding and process adjustments, including:
  • The 1992 Prescription Drug User Fee Act (PDUFA). This legislation introduced “user fees” whereby industry would directly fund the FDA (see industry capture for more info).11Maryanne Demasi, “From FDA to MHRA: Are Drug Regulators for Hire?” BMJ 377 (June 29, 2022): o1538, https://doi.org/10.1136/bmj.o1538.
  • The 21st Century Cures Act. The act responds to pressure from industry and Congress to speed the approvals process by establishing accelerated approvals pathways, including the provision of the results of observational studies in some circumstances in place of full clinical trials, under certain circumstances (see the premarket assessment section for more info).12Office of the Commissioner, “21st Century Cures Act,” Food and Drug Administration, January 31, 2020, https://www.fda.gov/regulatory-information/selected-amendments-fdc-act/21st-century-cures-act.

The COVID-19 pandemic highlighted the way issues regarding medical products can become politicized, and led to discussion about how to separate the agency’s scientific evaluation from heated policy debates, prompting some to suggest the FDA should be structured as an independent agency.13Laura Karas, “FDA’s Revolving Door: Reckoning and Reform,” Stanford Law and Policy Review 34, no. 1 (2023): 1–66, https://law.stanford.edu/publications/fdas-revolving-door-reckoning-and-reform. A similar set of discussions ensued following the decision by Health and Human Services Secretary Kathleen Sebelius to override the FDA’s decision to make emergency contraception more widely available. See Gardiner Harris, “Plan to Widen Availability of Morning-After Pill Is Rejected,” New York Times, December 7, 2011, https://www.nytimes.com/2011/12/08/health/policy/sebelius-overrules-fda-on-freer-sale-of-emergency-contraceptives.html.