Regulatory agencies take responsibility for the safety and efficacy of the drugs they license. Over the past few years, however, several serious failings in the approval procedure have raised widespread concern that the present process of drug regulation is inadequate to guarantee the defence of public health. We discuss the approval process of drotrecogin alfa (activated), a non-antibacterial drug for the treatment of severe sepsis. The US Food and Drug Administration (FDA) and the European Medicines Agency (EMEA) approved drotrecogin alfa following a phase III trial that showed efficacy of the drug. However, on the basis of subgroup analyses, the drug was licensed only for use in part of the study population. This methodology is contrary to guidelines established by the FDA and EMEA themselves. According to these guidelines, analyses of non-predefined subgroups do not provide sufficient evidence for drug approval. Although the results of several post-marketing trials raised doubts about the efficacy of drotrecogin alfa, both regulatory agencies passively accepted the reassuring interpretations of sponsored investigators and of the manufacturing company itself. The recent requirement of a confirmatory trial by the EMEA without recalling the drug from the market is the latest inconsistent step taken by the agency. The case of the approval and post-marketing evaluation of drotrecogin alfa, we believe, shows that the current drug regulation system needs reforming.