(FORTUNE Magazine) – JAMA COULDN'T WAIT. THREE DAYS BEFORE THANKSGIVING, the prestigious Journal of the American Medical Association posted early its Dec. 1 editorial slamming the current system for drug-safety review and calling for a new independent agency to yank the job from the FDA. While the journal's editors and several accompanying articles saved their harshest words for drugmaker Bayer, whose cholesterol-lowering Baycol was pulled from the market in 2001 amid safety concerns, there was plenty of disdain left for the overseer that had failed to catch the problem (and which had missed warnings about "serious harms from widely used and heavily promoted medications"). Describing the FDA as untrustworthy, conflicted, slow to act, and prone to a "lack of vigilance," the physician-authors said it was time for somebody else to protect the public.

Ah, the poor, hapless FDA. Do a fingerprint dusting of any number of recent scandals and controversies, and you're sure to pick up the smudged paws of this 98-year-old federal agency somewhere at the scene. The FDA, say critics, failed to heed a number of warning signs about Vioxx, putting tens of thousands of people at risk for serious heart problems--just as it had missed the frightening connection between some antidepression drugs and teen suicide. Others angrily complain that the agency has been over-regulating, that its rigid demands regarding clinical trials delay promising medicines from getting to patients and, ultimately, push drug prices ever higher. Millions more have griped this year about the FDA's flat-footed response to the flu vaccine shortage--as countless others said the agency was being unnecessarily "protective" with regard to importing meds from Canada. Food safety? Nutritional labeling? Genetically modified tomatoes? Choose a debate, and the FDA will probably assume the role of market obstructionist or industry patsy. "People want to have it both ways," says Rick Pazdur, the well-respected and surprisingly calm head of oncology products in the FDA's Center for Drug Evaluation and Research. "They say on Monday, 'You're approving drugs too fast.' And on Tuesday, 'You're approving them too slow.' 'The drugs work--but they're too toxic,' or 'They're safe, but not efficacious enough.' What do people want from the FDA? They want perfection, and, I'm sorry to say, it isn't going to exist."

Pazdur's right, of course. Drug development is a study in trial and (mostly) error, involving as much guesswork as science. And even seeming wonder drugs can reveal dangerous kinks years after their appearance on pharmacy shelves or have sharply varied effects in different people. Yes, medicine is imperfect--and it's unfair to make the FDA the main bogeyman when drugs in the pipeline don't work as promised or when approved drugs turn out to have surprising adverse side effects. That's not to say that the agency didn't botch its important oversight duties on Vioxx, Baycol, or any other drug. It may well have.

But believe it or not, a bigger issue is at stake. The more urgent question is not whether the FDA is doing its job well, but rather if it has the right job to begin with. The agency's statutory responsibility is to ensure that new drugs are safe and effective. But by both tradition and expectation, it has another goal as well--to help industry bring needed medicines to the public. While that pairing seems eminently reasonable, it's actually a recipe for disaster--as we've seen time and time again. That's because the two goals war with each other. On the one hand, it can take decades (and perhaps a billion-dollar commitment from the drug's manufacturer) to fully vet the safety and efficacy of a new compound--and even then, there can be horrible surprises. Of the 548 new chemical entities approved by the FDA from 1975 to 1999, in fact, more than 10% have since been removed from the market or given prominent "black box" safety warnings. On the other hand, for patients with life-threatening or disabling diseases--and in cancer alone 1.4 million new cases are diagnosed each year--every day of waiting can add to the danger, fear, and frustration. The FDA is therefore forever torn between moving too quickly and being too cautious, between compassionate relief and recklessness, between the risk of letting drug sponsors cut corners and that of suppressing innovation. "In both cases lives are lost," says Henry Miller, a former FDA official and founding director of the agency's Office of Biotechnology Products. "Vioxx and Baycol may dominate the headlines," he says, "but there are real costs to real patients when potentially beneficial products are delayed, abandoned, or never developed at all."

So what to do about it? One solution is to return the FDA to its pre-1962 mission and have it focus exclusively on the safety of drugs--leaving others to determine whether they work. If that sounds radical, you may be surprised to know that's exactly what's being done right now for one enormous class of compounds: drugs approved for one indication but used "off label" (that is, in a way not sanctioned by the FDA) for a wholly different disease or in unapproved dosages. Cancer patients are routinely treated off-label--with drugs ranging from the once-banned thalidomide to the much-raved-about Gleevec. Indeed, as many as 90% of children with serious diseases are treated with medicines or dosing regimens not formally approved for the condition, says Alexander Tabarrok, an economist at George Mason University who has written extensively on off-label drug use and who argues that the FDA should drop efficacy standards altogether. "Treatment breakthroughs in the clinic," he says, "advance medicine faster than the FDA approves new uses for existing drugs."

True enough. So does that mean we should stop verifying the effectiveness of new drugs before allowing them on the market? No. The lives of patients are simply too important. The point, though, is to have somebody other than the government handle the job. Why not let committees set up by medical specialty boards (e.g., internal medicine and urology) or by leading professional guilds (like the American Society of Clinical Oncology) determine whether new drugs work instead? Leave it to veteran physicians who understand the diseases in question, the medical literature, and ultimately, how much risk their patients are willing to take. To be sure, the FDA has advisory panels of outside specialists. But take it a step further: Let the real experts judge the clinical trials and make the final decision. Think of it as "peer review" writ large.

Freed up from the requirement of evaluating countless multiyear Phase 3 (efficacy) trials, naturally, the FDA can redouble its effort monitoring the safety of drugs long after they've hit the market. And who knows? It might even make sure there's enough flu vaccine next year.