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Old Friday, November 23, 2012
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Default Regulatory systems

Regulatory systems
By Faisal Bari | 11/23/2012

WHEN a rare form of fungal meningitis was discovered in a few patients in the US recently, it set off alarm bells. Pretty soon, the suspicions of the authorities had been narrowed down to one pharmacy, a mixer of drugs, and it was thought that the contamination had taken place on that manufacturer`s premises.

This was confirmed soon enough. A pain-killing injection had been contaminated. The drug manufacturer had sent about 14,000 of these injections to hospitals and clinics across the US.

Until recently some 460 cases of fungal meningitis had been confirmed and more than 40 people had died. Most of the 14,000-plus people have been contacted and told to look out for symptoms.

The pharmacy has been closed and all its supplies of other drugs too have been recalled from the markets.

The manufacturing standards of the firm in question failed and the regulatory system was not able to prevent the failure or detect it in time. The cost of the failure has been massive and tragic. And the matter hasn`t ended. Many people are still living in fear of contracting the disease. Hundreds have had to bear huge medical expenses.

Coming to terms with the episode will take a long time of course. The company faces years of investigations and then criminal cases will be instituted by the affected states. There have already been civil cases lodged against the company by many of the people who have been affected or on behalf of those who have lost their lives.

At the same time many inquiries have already been launched as to why the regulatory mechanism failed. What went wrong and who is responsible and, most importantly, what should be changed so that such a tragedy does not happen again? States are looking into the issue, the Federal Drug Agency is looking into it and even Congress has held hearings on the matter. It will take time, but there will, in the end, be changes that address the issues of regulating pharmacies that mix drugs and there will definitely be accountability.

Designing regulatory mechanisms requires very detailed work. It is impossible to foresee everything that can go wrong, and new contingencies keep arising, so systems have to be designed in a way that they address all that has been and can be foreseen and are ready to address as many contingencies as possible. Careful and advance planning is the key here.

A couple of years ago, New York City authorities, due to popular demand, decided that they were going to close parts of one of the main streets Broadway in Manhattan to vehicular traffic to encourage street culture in some areas and to give pedestrians and cyclists some peace. What was interesting to see was the kind of preparation that went into making something like that happen.

City authorities studied traffic patterns to understand how the closures would affect traffic flows. Where would the diverted traffic go, what would happen to traffic congestion and travel time, what would be the effect of the change on commuting times, how would public transport systems need to be adjusted and many other relevant factors were studied in detail.

Finally, when the plans had been made, public announcements about closures and changes in traffic flows were posted on the roads at least six months in advance to let motorists know that parts of some streets would have different traffic rules. Public announcements also came in newspapers as well as on local channels. When the change finally happened it was followed through to ensure that any needed adjustments were made.

The whole change seemed to work smoothly and well. I am sure there were issues and many irate drivers, but given the advance warnings and planning, it is likely that the number of such people was not too many.

For the last two to three years we have experienced the myriad changes that Ferozepur Road in Lahore has been undergoing the various experiments with the design of Kalma Chowk, the underpasses on the Canal and then the overpass at Kalma Chowk. To say that the planning process has been a mess is an understatement. To further say that the execution of the plans has been haphazard and without any regard for commuters` convenience is to state the obvious. But that is the way it has been.

Changes are made without any announcements. On the rare occasion when changes are planned and alternatives announced in advance, the latter are never thought through. If the alternative to Ferozepur Road, a six-lane busy road, is a couple of single-lane side roads (and this will apparently be the case for months) the planners need to wake up.

In the past few months and years, we have seen the limits of our regulatory structures in other areas too. Factory fires, substandard buses having accidents and CNG gas cylinder explosions are just some examples where we have seen recent failures.

Medical malpractice cases are reported regularly in the papers as well.

The issue of fake and/or substandard products -medicines, pesticides, edibles and fertilisers is also in the papers often enough, but hardly ever does one hear of follow-up, accountability or changes in regulatory systems.

The cost of this laxness in human terms alone, leaving aside any business losses, is huge, but even that does not seem to produce any reaction beyond the initial outcry and indignation.

We live in a world of uncertainty and incomplete information: we cannot predict everything that could happen. So designing fool-proof systems is not possible. But with increased planning and care in the design and implementation of regulatory systems that keep the interests of the public alive, and keeping such systems flexible so that they can respond to contingencies, we can definitely do much better than we are at the moment. A lot of work already exists in these areas; we need to learn from some of it.
The writer is senior adviser, Pakistan, at Open Society Foundations, associate professor of economics, LUMS, and a visiting fellow at IDEAS, Lahore.
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