After 18 months in office, President Bush has yet to appoint a commissioner to head the Food and Drug Administration (FDA). The drug industry has been pleading him to do so.

The lack of a commissioner is being blamed for the FDA's now typical response to drug applications filed by biotech and pharmaceutical companies. The response: The FDA asks for more information on almost all new drug applications (NDAs) filed. Asking for more information usually leads to at least 12 months of additional work for the applying company.

Thoroughness is important, but without a commissioner to grant the final word, the FDA finds it easy to defer decisions. Following record efficiency in recent years, the FDA's slowdown is one culprit dragging down drug stocks. Others culprits are Capitol Hill's ambition to lower drug prices and its favorable legislation toward generic drugs.

We own three biotech companies, all of which have been punched in the stomach for various reasons, including the above. Even so, the companies keep moving forward, if hunched and gasping.

Today, Amgen (Nasdaq: AMGN) closed its $10.3 billion purchase of Immunex, the largest acquisition in biotech history. The crown jewel at Immunex is arthritis drug Enbrel, with an expected $3 billion in yearly sales by 2005. At $32, Amgen trades at 23 times its year-end earnings-per-share estimate -- a multi-year low.

Human Genome Sciences (Nasdaq: HGSI) announced this morning that it received a milestone payment from partner GlaxoSmithKline (NYSE: GSK). GSK initiated Phase I clinical trials on an HGS genomics-derived drug for osteoporosis. The dollar amount wasn't disclosed. It was likely modest.

Yesterday, Millennium Pharmaceuticals (Nasdaq: MLNM) discontinued Phase II trials of an oral chronic asthma drug, MLN977, but it exhaled that inhalation studies with the drug were promising. The stock rose. This afternoon, Millennium is expected to announce a second-quarter loss of $0.19 per share on $96 million in sales, up 63% from last year.

Investors await these numbers anxiously, as they await other large earnings reports. This is an irony that Bill Mann (TMF Otter) pointed out yesterday in conversation. We don't trust the numbers that companies feed us, yet we're waiting on them with feet nervously a-tapping. The market will move based on earnings results that we don't trust.

That leads us to another unfortunate gap in governance.

The Securities and Exchange Commission (SEC) is half-vacant. Two of the five seats on the SEC are still empty, and two of the seats are only temporarily filled by members serving under recess appointments lasting until Congress adjourns for the year. The final seat on the SEC is filled by Chairman Harvey Pitt. He's the only member of the SEC confirmed by the Senate. And Chairman Pitt is criticized by public watchdogs for his close ties to the accounting industry.

An empty and temporary board of leadership at the SEC is not exactly what investors need right now. In a nonpartisan manner, the president needs to nominate people to fill these seats. Until they're filled, the SEC is seriously hampered. It can't even vote properly on issues. 

Meanwhile, it seems investors must protect themselves because nobody else is, or is ready to, and so no one is anxious to run out and buy stock. Even yesterday's 97-0 vote in the Senate to tighten regulation of auditors and hold executives accountable hasn't helped confidence much.

On the bright side, the collapse and subsequent reform on the stock market should lead to a better system of laws across the board and, eventually, a more trustworthy market -- one much improved, as happened in the years after 1929. It'll just take a long time to get there. Especially with the government allowing leadership roles to go unfilled.

Building real trust and confidence will take time. And that's where we're at today. To discuss this, join us on the current events board.

Jeff Fischer is not partisan. Just make things work, government. (The U.S.A. is still young, like a teenager.) The Fool has a disclosure policy.

Rule Breaker Portfolio Returns as of 7/15/02 Market Close:

            RB        S&P     S&P 500
            Port      500      DA*    Nasdaq
Week      -3.18%**   -6.05%   --      -1.64%
Month     -9.40%**   -7.25%   --      -5.51%
Year     -31.64%**  -20.05%   --     -29.11%
 8/4/94   20.11%      9.13%   10.45%   8.55%

*Dividends added.

**Please keep in mind that these figures will be distorted for the RB Port once a quarter when we deposit $12,500 in new cash. See next note! 

***Compound Annual Growth Rate using Internal Rate of Return. This performance measure accounts for the periodic deposits. Total return wouldn't be meaningful, because we started adding cash to the portfolio in July 2001. In a total return calculation, or (Current Value - All Cash Deposited)/All Cash Deposited, cash added shows up as returns.