States Rush to Rein In Prescription Costs, and Drug Companies Fight Back

By Robert Pear – Re-Blogged From NY Times

States around the country are clamping down on pharmaceutical companies, forcing them to disclose and justify price increases, but the drug manufacturers are fighting back, challenging the state laws as a violation of their constitutional rights.

Even more states are, for the first time, trying to regulate middlemen who play a crucial role by managing drug benefits for employers and insurers, while taking payments from drug companies in return for giving preferential treatment to their drugs.

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Twenty-four states have passed 37 bills this year to curb rising prescription drug costs, according to Trish Riley, the executive director of the National Academy for State Health Policy.CreditJulio

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Beyond Permissionless Innovation

By Veronique de Rugy – Re-Blogged From Reason.com

Exciting things happen outside the reach of regulators.

Paul McCarthy is the father of a boy born without fingers on one hand. A few years ago, McCarthy found that a $30,000 prosthesis—the only option then available—was not a perfect match for his 12-year-old son’s needs, so he went online to find a better, less pricey alternative. McCarthy’s search led to the assembly of an unlikely team: a South African woodworker, an American puppeteer, and another father in a similar situation. Thanks to the power of the Internet, the men were able to collaborate from thousands of miles apart to make an inexpensive but workable prosthetic appendage using 3D printers.

Such “permissionless” innovation, in which people with big ideas for how to make the world better act on them without first jumping through regulatory hoops, is remarkable. It’s also extremely fragile. The entire enterprise could crumble overnight with a stroke of a regulator’s pen, a change in an insurance company’s policy, or a lawsuit filed by entrenched manufacturing interests. It hasn’t so far in this case. But due to pressure from competitors that make traditional prosthetics, the company McCarthy and his partners created has already had to agree to define its product as a “training” prosthetic, thus opening the door to future regulatory limitations on its business model.

Consider how the Food and Drug Administration (FDA), in the name of safety at any cost, quashed the genomics company 23andMe by ordering it to stop marketing its cheap, at-home genetic testing kits. According to the agency, 23andMe should have obtained permission from regulators before selling its product to American consumers who were interested in learning more about their own personal genetic information.