Regulatory dependence and Scientific Advisory Boards

The Food and Drug Administration (FDA) uses scientific procedures to evaluate regulated firms’ new product applications.Much of its basic intellectual resources, in the form of scientific advisory committee members, come from research institutions. Regulated firms may seek connections to the FDA advisory committeemembers to affect the regulatory approval process. However, individual linkagesmay fail. The use of Scientific Advisory Boards (SAB) with multiple members provides redundant ties to the regulator, whichmeans that the failureof each tiebecomes lessmaterial. Thispaper isprincipally concernedwith the firm’smotivation to rebalance power imbalances rather than any actual regulatory outcomes. Controlling for alternative explanations, I find that dependence on the regulator is positively associated with the probability of having a SAB. Selected network diagrams add credibility to the hypothesis. © 2009 Elsevier B.V. All rights reserved.