On January 14, the U.S. Department of Health and Human Services issued new, relaxed guidelines for physicians wishing to prescribe buprenorphine to their patients with opioid use disorder. While the so‐called “X” waiver required of prescribers remains, the new guidelines permit physicians (not nurse practitioners or physician assistants) to prescribe buprenorphine without the waiver. They may only prescribe to patients located within their own state and they may have no more than 30 opioid use disorder patients on buprenorphine at any time.
Buprenorphine is a synthetic opioid that was developed to treat pain. It is only a partial opioid agonist, and therefore is less prone to suppress the respiratory mechanism in high doses. Since the early part of this century, it has been used for Medication Assisted Treatment (MAT) for opioid use disorder. Practitioners have been allowed to prescribe and dispense buprenorphine to their patients and follow them as outpatients in their office. Unfortunately, onerous federal regulations apply.
Under the Drug Addiction Treatment Act of 2000, practitioners who wish to treat substance use disorder with buprenorphine are required to obtain an “X waiver.” Providers must take an 8‐hour course in order to have the ”X” added to their Drug Enforcement Administration narcotics prescribing license. There are also strict limits on how many patients a practitioner can treat at any given time, as well as restrictions on nurse practitioners or physician assistants wishing to obtain the X waiver.
These have combined to create an acute lack of buprenorphine MAT providers. According to the Substance Abuse and Mental Health Services Administration, less than 7 percent of practitioners have jumped through the hoops and obtained X waivers. The shortage is particularly severe in rural areas. Nationally, only 1 in 9 patients with opioid use disorder are able to obtain buprenorphine MAT. This has fueled a black market for buprenorphine, where many with opioid dependency or addiction use the drug—which is a poor substitute for the “high” they get from their opioid of choice—to self‐medicate against withdrawal symptoms.
For this reason, health care practitioners interested in treating opioid use disorder, as well as other harm reduction advocates, have called for ending the requirement of an X waiver to use buprenorphine for MAT. In France roughly one‐fifth of general practitioners treat people with substance use disorder in their offices without any further licensing or education requirements. It has contributed to a dramatic reduction in France’s overdose death rate.
In January 2020, the National Academy of Science, Engineering, and Medicine (NASEM) joined the chorus calling to end the “X” waiver.
Methadone is another synthetic opioid that has been used for MAT since the late 1960s. Unfortunately, in the U.S., methadone can only be used for MAT in DEA‐regulated methadone clinics, and the patients must receive and consume the methadone in the presence of clinic staff. In several other developed countries, such as Canada, the U.K., and France, patients are prescribed and dispensed methadone without this requirement. Naltrexone, an opioid blocker sometimes administered in depot injections that last a month, has also been used for MAT.
Recent research found MAT with either methadone or buprenorphine to be the only effective treatments associated with reduced overdoses and overdose deaths out of 6 different treatment pathways studied, including a pathway using naltrexone.
The relaxation of the MAT regulations for buprenorphine is a step in the right direction. But limiting the new rule to physicians and restricting their number of patients to 30 doesn’t go far enough. Interviewed by MedPage Today, Assistant Secretary of HHS Admiral Brett Giroir, MD said:
[W]e anticipate that this is going to be primary care providers who may be in rural areas that may treat 5 or 10 people within their practice with this. If they’re going to get into the business of 40 or 50 or 80 or 100, right now we think they should go through the X waiver process with all the controls on that, but this is a first step that we’ll evaluate.
Dr. Nora Volkow, Director of the National Institute on Drug Abuse, told MedPage Today:
This is a compromise. We’re changing a practice, and by doing it in a conservative way, we can ensure that we’re not producing harm by practices of things that we may not know. Initially the X waiver was also starting with 30, and I assume that that’s because there was experience with that; that made a reasonable, justifiable number.
There was bipartisan support in the last Congress for legislation that would eliminate the X waiver requirement for health care practitioners prescribing buprenorphine for MAT. Hopefully the new Congress and the incoming Biden administration will pick up where their predecessors left off so that people with opioid use disorder can get the help they need.
Absorbing lessons learned from the COVID-19 pandemic, Arizona Governor Doug Ducey plans for Arizona to once again lead the way in health care reform, this time by seeking legislation to make permanent his emergency executive order that allows Arizona residents to obtain telehealth services from practitioners licensed in any of the 50 states and the District of Columbia. While many states have taken similar emergency steps to improve access to health care during this public health crisis, unless their legislatures act, the emergency orders will expire when the crisis is over. If Governor Ducey convinces Arizona legislators, Arizona will become the first state in the union to permanently allow out‐of‐state licensed health care practitioners to render telehealth services to its residents.
The Governor’s 2021 Policy Priorities reported that many Arizonans—particularly those in rural areas—benefited greatly from the emergency telehealth action, with behavioral health services among those most utilizing the remote technology.
Under current law, Arizona—like every other state—allows patients to travel out of state to receive medical treatment and even surgery from a doctor licensed in that state, but those same doctors cannot provide telehealth services to patients in Arizona without an Arizona license. Removing that requirement will give Arizonans access to care from the best health care practitioners in the country.
As the 2021 Policy Priorities states:
A person who is visiting a family here or spends the winter here, should be able to reach their doctor in their home state by telemedicine. A family in Mohave County who utilizes a hospital in Las Vegas, Nevada should be able to get follow up care via telemedicine. Today, someone who has the means to travel to a consultation with a specialist in another state can do so. Specialty doctors should not only be accessible via an expensive flight and hotel stay. If a specialty provider is willing to do a consult via telehealth, Arizona patients should have easy access to those services without unnecessary travel expenses and Arizona is going to lead the way on this. If it’s safe and it works during a pandemic, we should embrace it when we’re not in an emergency as well. (Emphasis added.)
When, in April 2019, Arizona Governor Doug Ducey signed into law HB2569, it made Arizona the first state to recognize all out‐of‐state professional and occupational licenses. As a result, any health care practitioner with a license in good standing in any of the other 49 states and the District of Columbia can now establish a practice in Arizona and the relevant state licensing boards will issue them an Arizona license. Unlike a license reciprocity law, which recognizes licenses of out‐of‐state license holders hailing from states that recognize Arizona licensees in return, this “universal” licensing law recognizes out‐of‐state license holders unilaterally.
In June of 2020 the Arizona‐based Goldwater Institute reported that, since the law was enacted, “about 1,454 people have applied for an Arizona license under the law. Of those, at least 1,186 have had their licenses approved while only 16 have been rejected.” Among the boards granting the most approvals were those in the fields of behavioral health, social work, medicine, dentistry, occupational therapy, and clinical psychology.
Now Arizona can take the lead in liberating telehealth. Legislators in other states are also contemplating such reform.
This past November I was privileged to testify before a joint committee of the Idaho legislature that is considering telehealth reform. As expected, the committee received pushback from representatives of incumbent licensed health professions. They claimed to be very much in favor of telehealth, and supported state laws requiring insurance payments for telehealth services, but cautioned that it was unsafe to let Idahoans receive care from practitioners licensed in other states, even though every state has essentially identical license requirements and every state—including Idaho— licenses practitioners who received education and training in other states. Arizona legislators should expect similar resistance when they take on the Governor’s proposal. It’s understandable. If reform is enacted, practitioners would have additional competition from out‐of‐state.
Following Arizona’s lead, several states, including Pennsylvania, Missouri, Montana, and Utah have since enacted similar universal licensing laws. If Arizona enacts telehealth reform, expect other states to follow suit as well. Some critics claim that too many leaders prefer to carry out great reforms second—not first. That statement doesn’t appear to apply in Arizona.
New York City Mayor Bill de Blasio and New York State Governor Andrew Cuomo are currently at loggerheads over vaccine allocation in the city. The governor has only approved for the vaccine to be given to the first prioritized groups: healthcare workers in hospitals, urgent care providers, and nursing home residents and staff. New York City Mayor De Blasio believes that the city should be given authority to broaden eligibility further, and that if given that authority, they could already be vaccinating many more New Yorkers, including the over‐75 demographic at highest personal risk from the virus.
Yet Cuomo is refusing to relent, despite New York City officials being adamant that, using current eligibility criterion, vaccines sit in storage or are going to waste. As my colleague Jeff Singer explained this week, a lot of healthcare workers either have immunity from the disease already or do not want the vaccine. The restrictions mean some doses are having to be transported out of the city. This follows stories from earlier in the week that claim some public and private New York hospitals had used just 15 percent of their vaccine allocation.
Given vaccines are widely regarded as being in short supply relative to demand, that sounds baffling. One would think that if those eligible priority groups were not filling slots, providers would be seeking out other people to ensure that either appointment times or the vaccine doses themselves do not go to waste. Vaccinating anyone still susceptible to the disease has a public benefit by (at a minimum) reducing the chances of severe disease for the recipient.
Allowing pharmacists and providers to allocate spare vaccines to avoid waste is what economists call a Pareto improvement—a situation where nobody would be harmed but someone would benefit. That makes society better off. If the vaccine reduces transmission of the virus too, an additional inoculation makes everyone better off! HHS Secretary Alex Azar understands this. He warned states last week to not let “perfection be the enemy of the good” in rolling out the vaccine. Getting it in as many arms as possible was preferable to sticking rigidly to the recommended rollout prioritization, he said.
Here in DC, pharmacies have seen sense in regard to mitigating some of the waste associated with a centrally planned vaccine allocation like New York’s. Pharmacies have been vaccinating people from waitlists, or those in stores, if eligible healthcare workers fail to show up, or vaccines would otherwise be binned after vials are opened. I saw it with my own eyes a few nights ago, when a supermarket pharmacy announced that they had 4 vaccine doses remaining at closing time. The pharmacist opted to give them to the front two people in a line of about 20, and to two very elderly shoppers whom he identified as being more at risk from the virus.
Yesterday, I popped back towards closing time and was administered one of Moderna’s vaccines myself. I would have left the wait line if there had only been a few left, given an elderly couple were stood behind me. But owing to the violence on Wednesday in DC and the subsequent cancelled appointments due to the city’s curfew, the pharmacy had 8 spare doses that they said needed to be used yesterday. Better in the arm of someone than nobody. You don’t turn down a free shot.
So why not the application of such decentralized common sense in New York? Well, it doesn’t help that in the name of fairness and avoiding vaccine fraud, Governor Cuomo has claimed that any provider who breaches the state’s distribution plan could be liable for fines up to $1 million, and risk having their license revoked. Economists wouldn’t be surprised to learn that disincentives matter. Meanwhile, millions of elderly New York residents—those at the highest risk from this virus—are unable to be vaccinated by appointment, even as providers say they have spaces and vaccines remain in storage.
It’s impossible to think of a surer way to slow the overall vaccination process for the city than limiting eligibility and then imposing such a high cost on any deviation from it. And this points to an often unacknowledged truth. If you don’t allocate by willingness to pay a price, you must allocate either by letting politicians and bureaucrats decide who will get the good, or by some crude queue or waiting list.
Without the decentralized knowledge of who will want the good and when, allocation by bureaucrat can create either severe shortages or unforgivable waste, not to mention risking the allocation process itself being tainted by cronyism and political favoritism. Allocation by queue biases towards particular groups too. In this case, it favors those with time on their hands, who are able to spot news stories on Twitter and are young and able‐bodied, making them most willing to risk standing in the frozen meat section of a supermarket among shoppers for an hour during an aerosol‐transmitted pandemic.
As should be obvious, the idea that the bureaucratic or queuing methods lead to the allocation best suited to ending this public health crisis seems laughable. New York manages to combine the worst of both worlds—dictating limited eligibility in a heavy‐handed way and then deterring the safety valve of local providers allocating spare vaccines. The question then is not whether any allocation system is perfect. It’s whether a more market‐oriented system would get us closer to our social goals of herd immunity and hospital systems insulated from the risk of overcrowding sooner. It’s difficult not to conclude that, by ignoring basic economics, better outcomes in New York are being sacrificed on the altar of zero‐sum conceptions of fairness or “waiting your turn.”
Shortly after the COVID-19 outbreak began last year, numerous politicians and pundits proclaimed that the pandemic revealed massive vulnerabilities in global supply chains for essential medical goods — vulnerabilities that imperiled Americans’ health and national security and therefore necessitated major government interventions (read: subsidies and protectionism) to bolster U.S. supply chain “resiliency.” Pharmaceuticals, in particular, topped the list of medical goods that required government action, and the alleged threat to American pharmaceutical access — supposedly dependent on China and India — was so dire that the Trump administration fast‐tracked hundreds of millions of dollars in federal support to domestic producers of drugs and raw materials in order to “reduce reliance on other countries for drugs.”
At the time, I and others noted repeatedly that, while there were some gaps in the public data, the information we had on U.S. pharmaceutical production, R&D, and trade did not indicate a forthcoming pharmaceutical crisis. Now, the nonpartisan United States International Trade Commission has provided additional data in a massive new report on “U.S. industries producing COVID-19 related goods and the supply chain challenges and constraints that impacted the availability of such goods,” which for the most part confirms that our skepticism was warranted.
The report overall reveals a far more complicated and benign picture of the medical goods situation in the United States — one characterized by unprecedented supply and demand shocks, as well as substantial domestic resources (especially for pharmaceuticals, medical devices, and N95 masks), quickly‐adapting domestic and international supply chains, and beneficial global specialization and cooperation. It’s a great resource for those interested in manufacturing issues, and should help to inform the broader debate in Washington about the pandemic, supply chain resiliency, and national security.
The report also should temper specific concerns about the pharmaceutical supply chain, which the USITC finds worked quite well during the once‐in‐a‐generation pandemic due in part to its globalized business model (emphasis mine):
The United States has a large, geographically diverse pharmaceutical industry with established supply chains that proved resilient during the first half of 2020. The flexibility and number of manufacturing sites inherent in the global footprint of the pharmaceutical sector allowed firms to respond relatively quickly to demand and deliver additional medicines to aid in the response to the pandemic… The U.S. industry, which comprises companies ranging from large multinational firms to small and medium‐sized firms (SMEs), was operating at almost full capacity in the second quarter of 2020 to meet demand. These supplies were delivered via the existing wholesale distribution network.…
The Commission’s report also details the immense size and scope of the U.S. pharmaceutical industry (which has supposedly shriveled due to globalization) — nearly 5,000 establishments spanning numerous states and all stages of production (upstream, downstream, and “fill and finish”); increasing shipments that reached $268.7 billion in 2019; and an expanding workforce that hit 310,000 workers in early 2020. The report further notes that U.S. manufacturers responded to the pandemic by substantially increasing pharmaceutical shipments (even while bringing new COVID-19 products to the market) because they maintained their own “emergency plans” to utilize significant available inventories, different production sites, or contract manufacturers. Finally, the USITC report shows that some of the industry’s resilience has stemmed from its diverse foreign sourcing of raw materials and finished products, while noting that China and India are significant (but not dominant) suppliers — essentially confirming my analysis of the import data earlier this year.
For those (like me) who have been fascinated by the COVID-19 vaccine rollout in the United States, the USITC’s conclusions about the pharmaceutical supply chain’s resilience during the pandemic shouldn’t come as much of a surprise: Pfizer, for example, utilized its existing U.S. manufacturing capacity, as well as other domestic and international resources (not to mention lots of immigrants), to test and produce millions of vaccine doses with unprecedented speed. Moderna, meanwhile, has relied on smaller in‐house facilities and a partnership with a large Swiss pharmaceutical manufacturer, which has production sites in the United States and Switzerland. As a result of these and other multinational efforts, the vaccine bottlenecks we’re now experiencing have been related to government distribution, not private sector production, of finished doses. (Lessons abound.)
Still, the USITC report has a wealth of new data and is especially welcome given the incoming Biden administration’s plans to “rebuild” American pharmaceutical supply chains through top‐down mandates like the Defense Production Act. Surely, the pandemic has put real strains on Americans’ access to essential medical goods as demand skyrocketed and supply raced to catch up, and it’d be good for the country to get a better handle on the virus and vaccine distribution. But the pharmaceutical supply chains themselves have fared pretty well so far, and there’s little evidence that government could improve them.
A new year means a flurry of new legislation at the state and local levels. This year, as the Covid‐19 pandemic continues to rage, Massachusetts Governor Charlie Baker signed a new health care bill that, among other provisions, expands access to telehealth services.
The use of telehealth visits has increased dramatically during the COVID-19 pandemic. One CDC report finds a 154 percent increase in telehealth visits in the last week of March 2020 (the latest available data) compared to the same week in 2019. More recent data, when available, will almost certainly show similar increases.
Promoting the use of telehealth services, particularly during a global pandemic, is a laudable goal. However, it is less clear that a state mandate that insurance companies provide telehealth coverage is the appropriate course of action. States should strive to eliminate restrictions on telehealth, not impose new burdens. Absent regulatory barriers restricting the provision of telehealth services, insurers, providers, and patients all have incentives to shift towards more telehealth services. Patchwork state laws and arbitrary barriers, including restrictions on cross‐border telehealth, are the impediments to widespread adoption of telehealth, not insurance companies.
Nearly every state implemented changes to their telehealth requirements in response to the COVID-19 pandemic, but many of the accommodations have expired or are set to expire at the conclusion of the current health emergency. State legislatures should make these temporary allowances permanent and further remove regulatory barriers. Pandemic or not, telemedicine will play a larger role in the future, and lawmakers should promote – not discourage – its expansion.
2020 was a challenging year for the restaurant industry. The National Restaurant Association reports that 17 percent of restaurants in America have closed, with many more on the brink of failure. Restrictions on capacity and indoor service during the coronavirus pandemic forced many restaurants to pivot to a carry‐out or delivery model.
For restaurants without a pre‐existing, self‐run delivery system, delivery systems like DoorDash and GrubHub were critical to reaching customers. These services publicize restaurants, process orders, and deliver food via independent couriers. These companies remain profitable by charging restaurants and customers fees for this convenience.
However, lawmakers around the country have begun to crack down on what they consider unreasonable fees. Los Angeles, New York City, Seattle, Chicago, and Washington, DC are among the cities that have imposed caps on the fees that delivery services can charge. These caps are misguided.
Introducing price controls will disincentivize delivery services from partnering with low‐volume or remote restaurants, from increasing contractor pay, or from improving service. To make up for the revenue shortfall from restaurant fee caps, DoorDash and GrubHub will likely increase delivery and service fees for customers, which will then reduce demand for these services and ultimately harm restaurants.
Trying to protect restaurants while increasing costs to consumers is thus short‐sighted. Many restaurants have failed, and many more will. Fee‐limiting policies targeting the delivery middlemen will at best prolong the inevitable and more likely hasten that outcome.
The first wave of Pfizer and Moderna COVID vaccines arriving at health facilities across the country in the past few weeks sparked optimism that we may soon see a light at the end of the tunnel. As more people get vaccinated, the goal of herd immunity—where enough of the population is immune to the virus to prevent its easy spread to the vulnerable—becomes more attainable.
Markets provide the most efficient means of distributing the vaccine to those who want and need it. Instead, policymakers on all levels of government have chosen the opposite: central planning. Now we read of reports in the news than many frontline health workers—those assigned top priority for immunization—are not following the plan. They are reluctant to take the vaccine.
On New Year’s Day, the Los Angeles Times reported that anywhere from 20 to 50 percent of Southern California health care workers are refusing immunization. The New York Post reported similar resistance in New York, Ohio, and Texas.
This is very disappointing. Frontline health workers are not only at greater risk of contracting the virus but at greater risk of spreading it around their institution or bringing it home. It is reasonable to expect that, with their background in health care, they would have a greater appreciation for the value as well as the reported safety and efficacy of the two new vaccines. The longer it takes to get an estimated 70% of the population immunized, the longer it will take to reach herd immunity. (Of course, the millions of people who have already contracted and recovered from COVID are immune as a result and contribute to the goal of herd immunity as well.)
Many people who public health officials designated as lower priority for the vaccine are particularly frustrated to learn of this news. They very much want to receive the vaccine but are currently denied the chance, while vaccine vials allocated to first priority designees may go unused since manufacturers require them, regardless of any state policies or lack thereof, to be discarded if they are stored beyond safe time periods.
This unfortunate paradox—people denied vaccination while some unused vaccines are discarded— should come as no surprise to those aware of the failures of central planning. Markets provide the most efficient and accurate way of getting goods and services to those who most value them. In the face of the national public health crisis, policymakers instead resorted to central planning.
At this juncture, the federal government is the purchaser of all COVID vaccines and distributes them to state governments according to state population requirements. The states, in turn, delegate state, county, and municipal public health agencies to work with local health care providers to immunize the population. While the U.S. Centers for Disease Control and Prevention issued guidelines to prioritize who gets vaccinated, states reserve the right to establish their own priority schedules, and some states have not followed CDC recommendations.
Central planning suffers from a lack of local knowledge along with an inability to rapidly adjust to changes in supply and demand. Therefore, it is fortunate that our federal system allows for 51 different possible central plans instead of just one. This reduces potential harm from a one‐size‐fits‐all plan and allows the various states to learn from one another’s experiences. In most instances, states are establishing phased approaches to immunizing the population. Initially, the highest priority groups receive the vaccine. Lower priority groups are phased in as vaccine supplies permit.
As long as central planning remains the approach to immunizing the population, one way to mitigate the unfortunate misallocation of vaccines described above might be to follow the approach most commercial airlines use for boarding planes. States should consider announcing in advance a schedule that, say, gives the first 2–3 weeks of vaccines only to the top priority people; then the next 2–3 weeks to the top plus the next priority level; then the next 2–3 weeks to the first three priority levels, and so on. This way, if first priority people choose not to take the vaccine, lower priority people who wish to take it will not miss out on the chance to do so before the first vaccine batch needs to be discarded. It would also incentivize people in the higher priority levels to hurry up and get vaccinated before the lines get longer.
This proposal might help to reduce the waste of precious vaccine and permit more people who both want and need the vaccine to get it.