The return of the senior death discount

The Food and Drug Administration recently announced its tentative determination that most of the trans fatty acids in our diets – specifically, partially hydrogenated oils (PHOs) – are not “generally recognized as safe” within the meaning of the Food, Drug, and Cosmetic Act, and thus must be regulated as food additives. If the FDA finalizes this determination, then food manufacturers would need to obtain the approval of the FDA before selling PHOs in any food or as food ingredients. Approval would then depend, in turn, on a determination by the FDA that PHOs were safe after all. In this way, a final determination by the FDA that PHOs are not “generally recognized as safe” would effectively amount to a ban on their use in food.

The FDA’s proposed finding is a huge deal for public health. The agency estimates that eliminating PHOs from the food supply could prevent as many as 7,000 fatal heart attacks each year, plus up to 20,000 nonfatal heart attacks. Numerous scientific studies and expert review panels have drawn a link between dietary intake of trans fatty acids, blood cholesterol levels, and coronary heart disease. Additional studies have found that consumption of trans fatty acids may have other adverse health effects as well, perhaps even including an increased risk of diabetes.

There will be plenty of scrutiny of the FDA’s proposal in the weeks to come. For now, I want to point out one aspect of the proposal that might not be obvious. Although the determination of whether PHOs are “generally recognized as safe” is a strictly scientific one, one that demands “a reasonable certainty in the minds of competent scientists that the substance is not harmful under the intended conditions of use,” the FDA nevertheless appended a cost-benefit report to its preliminary scientific finding. 

In the report, the FDA revives the practice of valuing lives based on age – a practice that came to be known as the “senior death discount” when its use was brought to light several years ago, during the Bush administration. In estimating the benefits of removing PHOs from our diets, the FDA first counts the number of fatal and nonfatal heart attacks that could be prevented by its decision. The agency is then faced with the question of how much it’s worth to prevent these heart attacks. This is where the senior discount comes in. The agency estimates that the value of “each fatal heart attack” is “about $1.76 million.” Compare this to the Department of Transportation’s estimate of $9.1 million ($2012) for each life saved by its rules, or the Environmental Protection Agency’s estimate of $8.9 million ($2010) for this benefit. What explains the fivefold difference in the values estimated by these agencies and the one reported by the FDA? The FDA’s decision to make the value turn on the age of the people helped by its rule.

Here’s how it works. In its economic analysis of the proposal on PHOs, the FDA reports that people who have fatal heart attacks lose, on average, 13 years of life expectancy. The agency then discounts each year of lost life expectancy (a weird maneuver in and of itself, as Frank Ackerman and I have explained in Chapter 8 of our book, Priceless: On Knowing the Price of Everything and the Value of Nothing), arrives at a new estimate of 8 lost years of life expectancy for each fatal heart attack, and multiples the total number of lost years by $220,000 (the monetary value it has – without elaboration – attached to a year of life). The total value comes to $1.76 million for each fatal heart attack prevented. The linchpin of this analysis is the decision to make the value of preventing death turn on the age of the population benefited, since the older this population is, the fewer life-years they have left to save.

The FDA’s proposal on PHOs easily satisfies a cost-benefit test even with the senior death discount. And the agency’s ultimate decision on PHOs should, as I have noted, have nothing to do with cost-benefit analysis; it should turn solely on the scientific evidence on safety. But it would still be a welcome adjustment if the FDA, in the final analysis, pulled back from its revival of the discredited practice of making the value of life saving turn on the age of the people saved.   

This blog is cross-posted on the American Constitution Society's blog, ACS Blog.