Category: Policy Updates

Physicians for A National Health Program’s Red Herring

The tireless Dr. Steffie Woolhandler, American champion for government monopoly, so-called “single-payer” has contributed a blog entry to a New York Times “Room for Debate” discussion on whether the U.S. should be more like Denmark (as suggested by Senator Bernie Sanders in the recent Democratic presidential candidates’ debate):

By the end of the 20th century, the U.S. was the lone hold out for private, for-profit health insurance, and its health statistics lagged behind dozens of countries. Meanwhile, costs soared to twice the average in other wealthy nations.

Other countries have seen huge savings by evicting private insurers and the reams of expensive paperwork they inflict on doctors and hospitals.

Obamacare will direct an additional $850 billion in public funds to private insurers, and boost insurance overhead by $273.6 billion.

One interesting thing about the fight against Obamacare is that the single-payer extremists and the free-market advocates agree that Obamacare is fundamentally unjust, in that it compels citizens to hand their money over to private health insurers.

Jeb Bush’s Health Plan

BushJeb Bush’s health plan is out – and it is very good. Bush leads with fundamental reform of the Food and Drug Administration. “It should not cost $1.2 billion to $2.6 billion nor take 12 to 15 years to advance a medicine from discovery to patients, but that is the case under the Food and Drug Administration’s current regulatory mess.”

In recent weeks, we’ve read stories about drugs that have been around for decades, for which prices have been hiked sky-high. These price hikes are carried out by executives taking advantage of obscure FDA rules that impede competition.

FDA Driving Drug Prices into Stratosphere

BloombergBusiness has another story of a jaw-dropping price hike for a very old medicine. In this case,

Colchicine, a gout remedy so old that the ancient Greeks knew about its effects, used to cost about 25 cents per pill in the U.S. Then in 2010 its price suddenly jumped 2,000 percent.

How did this happen? Colchicine is one of a small number of drugs that were marketed before 1938. That year, the Food, Drugs, & Cosmetics Act was passed to require new drugs to be approved for “safety” as well as be “pure” (that is, not adulterated or misbranded as required since 1906).

British National Health Service Stops Paying for Lifesaving Drugs

Variety of Medicine in Pill BottlesBritain’s government-monopoly (single-payer) health plan, the National Health Service (NHS) has announced plans to stop paying for the most innovative, lifesaving drugs:

More than 5,000 cancer patients will be denied life-extending drugs under plans which charities say are a “dreadful” step backwards for the NHS.

Health officials have just announced sweeping restrictions on treatment, which will mean patients with breast, bowel, skin and pancreatic cancer will no longer be able to receive drugs funded by the NHS.

In total, 17 cancer drugs for 25 different indications will no longer be paid for in future.

Charities said the direction the health service was heading in could set progress back by centuries.

The Cancer Drugs Fund was launched in 2011, following a manifesto pledge by David Cameron, who said patients should no longer be denied drugs on cost grounds.

Drugs which will no longer be funded include Kadcyla for advanced breast cancer, Avastin for many bowel and breast cancer patients, Revlimid and Imnovid for multiple myeloma, and Abraxane, the first treatment for pancreatic cancer in 17 years.

(Laura Donnelly, “Thousands of Cancer Patients to be Denied Treatment,” The Telegraph, September 4, 2015)

This is the second round of cuts this year. All in all, reimbursement for 25 drugs used by about 8,000 patients has been cut off. Unfortunately, this is not surprising.

Obama’s Free Lunch Fallacy: Paid Sick Days Aren’t Free

On Labor Day the Obama administration distributed a press release crowing about an Executive Order the president signed requiring federal contractors to provide paid sick leave. The president wants to expand this benefit to millions of American workers whose employee benefits do not include a dedicated number of paid sick days.

The President’s proposal would raise the cost of employing workers, potentially reducing their pay and job prospects. Economists have long known that mandatory benefits are not free. Academic research by White House health adviser Jonathan Gruber confirmed workers pay the cost of mandatory benefits through lower wages. Gruber also found the intended beneficiaries of mandated benefits may be less likely to be hired. In other words, requiring employers to provide paid sick days  would hurt the employment prospects of workers most likely to stay home and care for a sick child: low-income, single mothers with small children.

Jindal’s Attack on Walker’s Health Plan is Off-Base

Yesterday, I addressed Governor Scott Walker’s health plan in largely positive terms. Governor Bobby Jindal, a competing Republican presidential contender, has launched a broadside against Walker’s plan, describing it as a “new federal entitlement.”

JW

The charge is way off-base. Governor Jindal proposed a health reform back in 2014, via his America Next policy shop. The point of contention is that Governor Jindal’s proposal would not offer everyone a refundable tax credit. Instead, it would eliminate the exclusion of employer-based health benefits from taxable income and replace it with a standard deduction.

I criticized the proposal when it was issued. True, it is an easier switch than a refundable tax credit. On the other hand, a deduction does nothing for low-income households – which means the welfare state continues to exist. Jindal himself proposed throwing $100 million more at states to fund their medical safety nets.

Victory for Free Speech in Medicine

Variety of Medicine in Pill BottlesJudges are chipping away at government censorship of communications about prescription drugs. The Food and Drug Administration exerts great power over a medicine’s label, which describes the medicine’s therapeutic claims. Drug makers and the FDA sometimes spend years negotiating a label.

The FDA regulates both safety and “efficacy.” So, a drug maker has to prove its medicine works to the FDA before marketing it to doctors. However, the cost of clinical trials to prove claims is monumentally high, so drug makers will not always invest in clinical trials for every indication. Once a drug is used, doctors will find that it is effective for more claims than indicated on the label. The new indications are often supported by peer-reviewed, published research. However, the drug makers have not yet invested the time and money to negotiate with the FDA to get the new claims onto the label. The FDA says drug makers can’t talk about these off-label uses. A federal judge just decided they can.

Obama Vs. Occupational Licensing

Occupational licensing occurs when the state government legislates that a person cannot practice a trade, for example law, medicine, or hair-braiding, without a license. For years, free-market researchers have recognized that this increases costs and reduces choices for consumers, and prevents entrepreneurs from entering markets.

Now look who’s joined the ranks of critics of occupational licensing: President Obama! In a welcome report bearing the imprimatur of the White House, the Department of the Treasury, the Council of Economic Advisers, and the Department of Labor conclude that:

Over the past several decades, the share of U.S. workers holding an occupational license has grown sharply. When designed and implemented carefully, licensing can offer important health and safety protections to consumers, as well as benefits to workers. However, the current licensing regime in the United States also creates substantial costs, and often the requirements for obtaining a license are not in sync with the skills needed for the job. There is evidence that licensing requirements raise the price of goods and services, restrict employment opportunities, and make it more difficult for workers to take their skills across State lines. Too often, policymakers do not carefully weigh these costs and benefits when making decisions about whether or how to regulate a profession through licensing. In some cases, alternative forms of occupational regulation, such as State certification, may offer a better balance between consumer protections and flexibility for workers.

Trans Pacific Partnership and Intellectual Property Protection

vaccine-shotOn July 31, trade ministers from countries (including the U.S.) seeking a final draft of the Trans Pacific Partnership (TPP) went home from Maui disappointed. Negotiations got hung up on a few things, especially intellectual property protection (patents) for pharmaceuticals.

The policy associated with the TPP that has been most controversial within the U.S. is Trade Promotion Authority (TPA or “Fast Track”). TPA is not a features of the treaty itself, but an entirely domestic policy defining the power of the Senate to ratify the agreement signed by the President’s men.

At NCPA, we were concerned that giving President Obama fast track authority would result in a poorly negotiated agreement, without adequate protection for intellectual property rights – the fuel of innovation. Congress went ahead and gave the president TPA, so all we can do is wait until we see what comes out of the hitherto confidential discussions.

There have been some positive signals that the administration is standing up for strong intellectual property rights. If that is why the negotiations broke up without a final agreement, then we should be glad to take a breather until other countries recognize the value of pharmaceutical patents like the U.S. does.

21st Century Cures Act Passes House with Overwhelming Bipartisan Support

This morning, the U.S. House of Representatives passed (344-77) the 21st Century Cures Act. This is a monumental achievement, designed to fundamentally restructure the Food and Drug Administration and thereby reverse the staggering decline of productivity in medical research and development.

The bill started as a bipartisan effort in the House Energy & Commerce Committee, where Republican and Democratic leaders moved beyond rhetoric and went right back to the basics, questioning the role of the federal government in spurring innovation and regulating our access to medical technology.

Unfortunately, their achievement is tainted by another fiscal glitch. For the third time (after the Medicare “doc fix” and repeal of the medical device excise tax), the House has voted for spending while weakening its commitment to offsetting cuts.