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The history of the drug approval process in the United States includes three phases. First, the Food and Drug Act of 1906 essentially required that the labeling of drugs be truthful. The 1938 Food, Drug, and Cosmetic Act added a requirement that drugs be proven safe, and the 1962 act added the requirement that drugs be efficacious. Each of these steps required more and more sophisticated science. Subsequent to the Kefauver-Harris Amendments of 1962, the number of innovative molecular entities each year has declined, the reasons for which have been subject to great debate. This decline has paralleled decreases in innovation across almost all American industry, leading to questions about the future of our country as an industrialized society. Both the Carter and Reagan administrations attempted to address this problem in a number of ways, including cutting back on those regulations that are perceived as unnecessary. Other innovative approaches have been used, such as the establishment of an Office of Small Manufacturers Assistance in the FDA Bureau of Medical Devices, mandated by the 1976 Medical Device Amendments. The latter came about in recognition of the fact that small businesses tend to be more creative and efficient than larger industries and more adversely affected by regulation. However, the problems raised in the regulation of technology transfer almost inevitably arise because of perceived scientific questions. Such questions, in turn, can only be answered by good science performed by the sponsor and understood by the regulator. Thus, it is essential that the FDA be staffed with knowledgeable scientists who can interact easily with their peers in academia and industry. Although science is often the cause of our troubles, it is also our only hope for minimizing the costs of new drugs and other technology. In turn, minimizing such costs will maximize the opportunities for innovation.