Jerry Kim

Arbiter of science: Institutionalization and status effects in FDA drug review 1990–2004

Abstract:
In this article the author proposes that firm status has a significant effect on the regulatory evaluation process. Regulators rely on external signals of quality such as status to resolve uncertainty, and the tendency to be infused with "value beyond the technical requirements of the task at hand" (Selznick, 1957) causes status positions in institutionalized domains to be particularly salient. Using review times for 839 New Drug Applications approved by the Food and Drug Administration between 1990 and 2004, the author finds that firms with higher status in the scientific knowledge domain receive faster approval for their drugs. The effect of status strengthened when products address underserved disease areas, and when following a major product withdrawal in the industry. Status in areas unrelated to the therapy category had a stronger effect on approval speed than therapy-specific status, implying that status effects are driven by values in addition to technical concerns.

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