Topic: Health Care & Welfare

That $750 Generic Pill Is a Pure Artifact of Regulation

As you probably know if you follow the news, a man named Martin Shkreli in charge of a startup firm called Turing Pharmaceuticals bought the rights to a drug called pyrimethamine (brand name Daraprim), used in the treatment of AIDS and malaria, and announced that he was jacking up its price from $13.60 to $750. Massive outrage resulted, which has echoed through social media for the past week.

Pyrimethamine is long since off patent. It is not difficult to manufacture, and sells cheaply in Europe. But under the distinctive food and drug laws of the United States you can’t just start turning out pills in your factory to compete with Shkreli, at least not without compiling and submitting a huge pile of regulatory paper with the U.S. Food and Drug Administration. This calls on the services of lawyers and scientists, costs a lot of money, and takes time, and you might or might not be able to recover the costs from the relatively small pool of users.

Government Workers More Satisfied with Retirement, Health Insurance, and Vacation Benefits

A recent Gallup poll finds that government employees are considerably more satisfied than their private sector counterparts with their compensation fringe benefits–namely government retirement plans (+25), health insurance benefits (+23), and vacation time (+17).

The poll compared satisfaction with 13 different job aspects for both government and nongovernment employees, ranging from stress on the job, flexibility, recognition, salary, relations with coworkers and bosses, etc. In 9 of the 13 characteristics, government and private sector workers reported similar levels of satisfaction (all above 60%) with job stress, recognition, flexibility, safety, salary, hours, promotion opportunities and job security. 

“Health Care’s Future Is So Bright, I Gotta Wear Shades”

If you’ve ever wondered why a person would earn (and relish) titles like “ObamaCare’s single most relentless antagonist,” “ObamaCare’s fiercest critic,” “the man who could bring down ObamaCare,” et cetera, my latest article can help you understand.

Health Care’s Future Is So Bright, I Gotta Wear Shades” is slated to appear in the Willamette Law Review but is now available at SSRN.

From the introduction:

Futurists, investors, and health-law programs all try to catch a glimpse of the future of healthcare. Lucky for you, you’ve got me. I’m from the future. I’ve travelled back in time from the year 2045. And I am here to tell you, the future of healthcare reform is awesome.

When I presented these observations at the Willamette University College of Law symposium “21st Century Healthcare Reform: Can We Harmonize Access, Quality and Cost?”, I was tickled by how many people I saw using iPhones. I mean, iPhones! How quaint. Don’t get me wrong. We have iPhones in the future. Mostly they’re on display in museums; as historical relics, or a medium for sculptors. Hipsters—yes, we still have hipsters—who wouldn’t even know how to use an iPhone, will sometimes use them as fashion accessories. Other than that, iPhones can be found propping up the short legs of coffee tables.

I also noticed you’re still operating general hospitals in 2015. Again, how quaint.

It’s not often I get to cite MLK, Bono, Justin Bieber, the Terminator, Bill and Ted’s Excellent Adventure, two Back to the Future films, and Timbuk3, all in one law-journal article.

King v. Burwell and the Triumph of Selective Contextualism

This Thursday, the Cato Institute will release the 14th edition of the Cato Supreme Court Review, covering the Court’s October 2014 and 2015 terms. The lead article, “King v. Burwell and the Triumph of Selective Contextualism,” is by Jonathan Adler and yours truly. Here’s the abstract:

King v. Burwell presented the question of whether the Patient Protection and Affordable Care Act of 2010 (ACA) authorizes the Internal Revenue Service (IRS) to issue tax credits for the purchase of health insurance through Exchanges established by the federal government. The King plaintiffs alleged an IRS rule purporting to authorize tax credits in federal Exchanges was unlawful because the text of the ACA expressly authorizes tax credits only in Exchanges “established by the State.” The Supreme Court conceded the plain meaning of the operative text, and that Congress defined “State” to exclude the federal government. The Court nevertheless disagreed with the plaintiffs, explaining that “the context and structure of the Act compel us to depart from what would otherwise be the most natural reading of the pertinent statutory phrase.” The Court reached its conclusion by disregarding portions of the ACA’s text and considering only selected elements of the ACA’s structure, context, and purpose. The King majority’s selective contextualism embraced an unexpressed congressional “plan” at the expense of the plan Congress actually enacted.

Our article—which is available now at SSRN—quotes Darth Vader more often than any previous Cato Supreme Court Review article. (Probably.)

Adler and I will also discuss the King ruling on a panel at Cato’s 14th Annual Constitution Day Conference this Thursday, September 17, from 10:45am-12pm. Click here to register.

The Next Big Obamacare Lawsuit Lives

Just when you thought that any further Obamacare lawsuits involved things like contraceptive mandates rather than anything at the law’s core, today a federal judge ruled that Speaker of the House John Boehner’s case against the HHS and Treasury secretaries can proceed. In a highly technical 43-page opinion, Judge Rosemary Collyer found that the House of Representatives has standing to sue these officials and their agencies for spending money on ACA implementation that Congress didn’t authorize. 
That’s clearly the right call: only Congress can appropriate funds for federal programs and so Congress faces a unique institutional injury when the executive branch decides to take that particular prerogative upon itself. 
Judge Collyer went on to deny standing on the additional claim that the executive amended the statute when it delayed and modified Obamacare’s employer mandate–but this is a much closer issue that will be hotly contested on appeal. 
As Cato described in our King v Burwell brief, Obamacare implementation has been a seat-of-the-pants executive frolic from the get-go (and we didn’t even include the episode at the heart of the surviving claim here). It’s not surprising that a law written in haste behind closed doors and that was rammed through Congress via procedural shenanigans would have growing pains as it went online. In the normal course, that would mean technical amendments and orderly administrative rulemaking, but here, given the lack of popular support–and the loss of Congress by the enacting party as a direct result–that wasn’t possible. Accordingly, the Obama administration is (again) reaping what it has sown. 
Keep an eye on U.S. House of Representatives v. Burwell – and note that one of the early sketches of this suit was presented at a Cato policy forum by my colleague Andrew Grossman. 

Big Problems with Anthony Atkinson’s “Inequality: What Can Be Done?”

“The godfather of inequality research,”  is how The Economist describes septuagenarian  British economist Anthony Atkinson. A frequent co-author with Thomas Piketty and Joe Stiglitz, Sir Atkinson has written a book about inequality which a  New York Times reviewer described as a “flurry of largely recycled policy proposals.”   Inequality: What can be done? is all about “unapologetic support for aggressive government intervention,” says The Economist, and “a throwback to the 1960s and 1970s.” 

There is no need to buy the book, because the following summary – “15 Proposals from Tony Atkinson’s book ‘Inequality: What can be done?’ – is more than enough.  Each Proposal is in the author’s own words, but followed by my own view of Problems with those plans.  [I skip Proposals 9-11, which are just inflated versions of policies similar to those in the U.S. – the earned income credit, estate & gift tax, and property tax.]

New Report Confirms That the VA Continues to Fail Veterans

The Department of Veterans Affairs has been embroiled in scandal for more than a year, ever since a whistleblower alleged that 40 veterans had died while waiting for care at the Phoenix branch. A subsequent investigation by the department’s Office of Inspector General confirmed that some veterans had died while waiting for an appointment, but also uncovered broader problems like “unacceptable and troubling lapses in follow-up, coordination, quality, and continuity of care.” These signs of widespread mismanagement and incompetence led to an investigation into the entire department. In a scathing report released this week, investigators again found evidence of serious problems within the VA and few signs that meaningful steps are being taken to address them.

As of September 2014, almost 900,000 veterans had pending applications and more than 300,000 of these belonged to veterans who had died. Due to data limitations, investigators could not determine how many of these deceased veterans were actively seeking health care, which ties into one of the most troubling problems that this scandal has exposed. The VA has failed to “ensure the consistent creation and maintenance of essential data” which means in many cases it is impossible for investigators to know just how bad things are. More than half of the pending applications did not have an application date, which “makes [the enrollment system] unreliable for monitoring timelines.” In addition, the investigators were able to substantiate the claim that VA employees had incorrectly marked unprocessed applications as completed and may have deleted more than 10,000 transactions over the past 5 years. In many cases, it is impossible to determine how many veterans who have actively applied for care are waiting, how long they have been waiting, and how many have died while waiting. Some aspects of the VA are so mismanaged that we can’t even tell how badly it is failing.