Now that the problem of prescription drug shortages has begun to affect children, members of Congress want to be seen as doing something – anything, really – to avert the crisis. A bi-partisan group of House members led by Rep. John Carney (D-Del.) introduced a bill two weeks ago. And yesterday, Sens. Amy Klobuchar (D-Minn.) and Robert Casey (D-Penn.) moved to attach their drug shortage bill to a piece of transportation legislation moving through the Senate. Unfortunately, most of the proposed action will have little to no affect on the fundamental underlying problems associated with drug shortages. Worse still, by ignoring the real problems and trying to put a defective bandage on the symptoms, the bills very well may make the shortages worse.
First, some background. There are currently around 250 prescription medicines — most of them generic versions of cancer drugs and surgical anesthetics — that are considered to be in “short supply”, according to the American Society of Health System Pharmacists. That’s up sharply from well below 100 drug shortages in a typical year — rising from just 58 in 2004 to 149 in 2008 to 211 in 2010. And, though there are alternatives for many of these drugs, several have no good alternatives for certain conditions. As USA Today’s Liz Szabo discusses, a shortage in the cancer drug methotrexate is particularly troublesome for children with acute lymphocytic or lymphoblastic leukemia (ALL). There are alternatives to methotrexate for other cancers, but not for ALL.
So, why the recent spate of shortages? In some cases, it’s due to a shortage in raw materials. And, for drugs like Ritalin and other ADHD treatments, heavy-handed DEA regulations have made it difficult to increase production of the raw materials. But only a relatively small portion of the shortages can be attributed to a shortage in raw materials. Still other regulations have significantly contributed to the shortages in many other products.
John Goodman summarized some of these other issues nicely in a post last summer. One contributing factor is the FDA’s increasingly strict regulation of drug manufacturing facilities, which Goodman calls a “zero tolerance regime” that is “forcing manufacturers to abide by rules that are rigid, inflexible and unforgiving.” FDA has been more aggressive in shutting down production facilities when even small quality control problems arise. A decade or two ago, a paperwork problem or some inappropriate handling procedure that didn’t directly affect drug safety or quality might have been addressed with a slap on the wrist. But over the last several years (and not just since the beginning of the Obama administration) FDA has, more and more, addressed these problems by temporarily shutting down plants until the problems could be resolved.
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There are a number of misconceptions about the Obama administration’s recent rule requiring employers’ health insurance policies (including those of religious schools and hospitals) to cover contraceptives and certain abortifacients. First, as a commentator notes, it’s not true that states in general already require such coverage:
HHS chose the narrowest state-level religious exemption as the model for its own. That exemption was drafted by the ACLU and exists in only 3 states (New York, California, Oregon). Even without a religious exemption, religious employers can already avoid the contraceptive mandates in 28 states by self-insuring their prescription drug coverage, dropping that coverage altogether, or opting for regulation under a federal law (ERISA) that pre-empts state law. The HHS mandate closes off all these avenues of relief.
Second, it’s just not true that the Obama administration’s rule must be legal because it is supposedly modeled on state insurance rules in states like California. Under basic principles of federalism, there are things that states can require, but the federal government, which has only enumerated powers, cannot. The Religious Freedom Restoration Act (RFRA) limits the federal government’s ability to regulate religious employers (under a 2006 Supreme Court ruling that makes clear RFRA’s vitality as applied to limits on federal law), but not the states‘ ability to regulate (the Supreme Court struck down the portion of the Religious Freedom Restoration Act that applied to state and local governments in 1997, citing principles of federalism, but left intact RFRA insofar as it limited the federal government’s powers). So a state contraceptive mandate can be perfectly valid even if a federal one would not be as applied to religious institutions. Indeed, the Obama administration’s rule appears to violate RFRA. (CEI has also explained in court briefs why Obamacare’s individual mandate exceeds Congress’s enumerated powers and thus is unconstitutional; why its coercive and indefinite Medicaid expansion provisions violate principles of federalism; and why Obamacare’s unconstitutional provisions are not severable from the balance of the law.)
The federal government thwarted a promising cancer treatment. The Food and Drug Administration (FDA) put Dr. Stanislaw Burzynski on trial twice, saying “it did not matter” whether his “unconventional cancer treatments saved people’s lives,” only “that he had failed to get the FDA’s permission first.” But as Reason’s Jacob Sullum notes, the Phase II clinical trials that the FDA belatedly carried out “under congressional pressure have supported what the teary testimonials of patients and their families suggested: Although Burzynski’s antineoplastons are far from a cure-all, they seem to be more effective, and are certainly much less devastating in their side effects, than radiation and chemotherapy for certain deadly, intractable cancers.”
The government is also thwarting the production of life-saving drugs, causing critical shortages of key medicines. The supply of an essential cancer drug may run out within weeks: “A crucial medicine to treat childhood leukemia is in such short supply that hospitals across the country may exhaust their stores within the next two weeks, leaving hundreds and perhaps thousands of children at risk of dying from a largely curable disease, federal officials and cancer doctors say.” As a commenter quoted by law professor Glenn Reynolds points out, this is the result of government price controls: “So price controls are imposed on injectable drugs and lo and behold a shortage arises. Who would have thunk it?” As a doctor notes, this drug shortage is far from unique: “these shortages are very real… one center I work at has trouble getting propofol for anesthesia and another cannot get zofran (ondansetron), one of the most effective anti-nausea drugs on the market.” As another commentator notes, the “government has distorted the market and removed incentives for the production of life-saving drugs.”
The Obama administration has also sought to sharply restrict the market for bone-marrow transplants, potentially costing thousands of lives. It recently asked a federal appeals court to extend the reach of the National Organ Transplant Act beyond its text, in order to ban compensation for the collection of peripheral blood stem cells needed by many transplant recipients. By doing so, it hopes to prevent organ transplants from being affected by “market forces.”
The federal DEA recently caused shortages of the drug Adderall, which is needed by people suffering from narcolepsy. Earlier, government regulations caused cancer and burn victims in the Third World to die in agony without any pain relief. More links on the federal government’s role in causing shortages of hospital drugs can be found here.
Only in Bizarro World can you claim someone is your attorney — and thus shielded by attorney work-product privilege — and then insist in the very next breath that they never represented you. But that is what the Obama administration and Supreme Court Justice Elena Kagan are doing. The Obama administration refuses to release its communications with Kagan about health care litigation back when she was the administration’s Solicitor General, on the grounds that they are covered by attorney work-product protection. Yet, contradictorily, it and Kagan insist that she never acted as the administration’s lawyer in the matter, and thus doesn’t need to recuse herself from hearing the constitutional challenges to Obamacare that will be decided by the Supreme Court this year.
Law Professor Ronald Rotunda, the co-author of a leading constitutional law treatise, says that Kagan should have recused herself from hearing the case based on the federal statute, 28 U.S.C. 455(b)(3), that forbids former government attorneys like Kagan from being involved in cases they earlier were consulted on, and the Judicial Conference’s ethical guidance for federal judges. As he notes:
[Commentators have been] calling on Justice Elena Kagan to disqualify herself in the ObamaCare litigation because of her role, as Solicitor General, in preparing its constitutional defense. These calls have intensified with the release of recent emails. Justice Kagan’s supporters respond that she testified in her confirmation hearings that she had nothing to do with ObamaCare
First, her phraseology was much more precise. She said she would only recuse herself from any case in which she “officially formally approved something,” or “served as counsel of record” or “played any substantial role.” But the statute requires disqualification if Kagan, as a federal employee (she was the former Solicitor General) “participated” as an “adviser” on a matter, even if she did not give any formal advice. She also must disqualify herself if her impartiality might reasonably be questioned.
In response to a Freedom of Information (FOIA) request, the Obama Administration has turned over some emails but it refuses to turn over many others because, it says, these emails are “protected by the attorney work product doctrine.” That doctrine, the DOJ affidavit explains, covers discussion by “OSG” (Office of Solicitor General) lawyers about “legal issues, arguments, and strategy concerning anticipated” litigation over ObamaCare. So, the DOJ is simultaneously claiming that it completely walled off Kagan from any discussions involving the constitutional defense of ObamaCare, while admitting that Kagan was participating in emails discussing “legal issues, arguments, and strategy concerning” the anticipated ObamaCare litigation.
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Proponents of government collective bargaining view it as a fundamental human right. The shameful actions of SEIU in Michigan, however, undermine this claim.
In 2005, Michigan lawmakers signed off to create the Michigan Quality Community Care Council (MQC3). MQC3 maintains a registry of homecare providers to assist Medicaid recipients looking for a caregiver. In reality, the primary function of MQC3 was to make 45,000 private homecare providers government employees and dues-paying union members.
In 2006, SEIU took advantage of Michigan law deeming homecare providers government employees. To gain exclusive representation SEIU organized a covert union campaign. The stealth-organizing tactic led to 20 percent voter turnout and SEIU won a landslide victory.
Soon thereafter, SEIU obtained a collective bargaining agreement (CBA) with the state. The events following the CBA expose the dangers of government union political influence and permanence of CBAs.
MQC3, acting as a “dummy” employer for homecare workers, created a mechanism for union dues to be siphoned off Medicaid checks. Not only is it illegal to unionize homecare workers who are private contractors, homecare workers already have employers: their Medicaid beneficiaries. Worse, the scheme wholly rejects the purpose of Medicaid by diverting funds from individuals who cannot afford medical care to Big Labor.
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69% of physicians are “pessimistic about the future of medicine” because of the 2010 healthcare law, notes Dr. Marc Siegel in USA Today. “Just 13% of those surveyed backed the Affordable Care Act.” “When surveyed by” the Deloitte Center for Health Solutions, “83% of doctors said one likely change to the medical system as a result of the law would be increased wait times.” “73% said it would not reduce costs.” “The concern of doctors is reflected among the American people: Support for the law has sunk to 29% in the latest Associated Press poll.”
Obamacare is full of pork, special-interest favors, and political payoffs and mischief. Health policy analyst Michael Cannon writes about how an obscure provision of the health care law discriminates in favor of hospitals in one state — Massachusetts — at the expense of hospitals in all other states.
Earlier, CEI filed an amicus brief challenging unconstitutional provisions of the health care law on behalf of the leaders of the Minnesota and North Carolina legislatures. More recently, it helped file a brief with the Supreme Court on the issue of whether Obamacare’s unconstitutional individual-mandate is severable from the rest of the health care law.
Obamacare is causing layoffs in the medical device industry. Obamacare will raise the cost of insurance by a massive 55-85 percent in Ohio, according to one study. It will harm life-saving medical innovation, concluded the Harvard Medical School Dean and others. It taxes medical devices and cosmetic surgery, and raises taxes starting in 2013 on investors. Obamacare also breaks many campaign promises, and increases state budget deficits.
In December, a federal appeals court ruled in Flynn v. Holder that the National Organ Transplant Act of 1984 (NOTA) does not forbid compensation for the majority of “bone marrow donors.” That was great news for patients needing bone marrow transplants: As CEI’s Greg Conko noted earlier, the court’s ruling clarified that it is legal for approximately 70 percent of donors to be paid for their life-saving contribution, compensation that is essential because around 3,000 Americans die every year waiting for a marrow transplant because an appropriate match cannot be found. Only compensation provides an incentive for additional donors to come forward and contribute their life-saving cells.
I put “bone marrow donors” in quotes, because the majority of “marrow donations” are not actually donations of marrow at all. Instead, peripheral blood stem cells are isolated from circulating blood, and those stem cells develop into bone marrow in the new patient. That procedure is not covered by the plain language of the NOTA statute, which only bans sales of organs and organ parts, not blood parts.
Now, the Obama administration is asking the appeals court to vacate its ruling allowing donors to be compensated, and to rehear the case en banc. It argues that whatever the text of the NOTA statute may say, its reach should be judicially extended beyond organs to peripheral blood stem cells, in order to guard against the evil of “market forces”:
The Obama administration has asked a federal appeals court to reconsider its decision last month to allow compensation to people donating bone marrow cells harvested from their bloodstreams.
In a petition for rehearing by the full U.S. 9th Circuit Court of Appeals, Atty. Gen. Eric H. Holder Jr. argued that the court ignored the intent of Congress to shield all organ sales from “market forces” when a three-judge panel ruled unanimously on Dec. 1 that marrow cells collected from blood aren’t covered by the 1984 National Organ Transplant Act.
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Sick people, like those suffering from narcolepsy, are suffering from a manufacturing shortage of Adderall. That shortage was caused by the Drug Enforcement Agency, which controls and limits the supply of Adderall’s ingredients.
Denying the obvious, the DEA falsely claims that there is no shortage, and that if there is one, it’s because manufacturers don’t want to make more of the drug, despite the fact that there is plenty of market for the drug:
To manage controlled substances that can potentially be abused, the DEA sets manufacturing quotas for drug ingredients each year to control supplies like Adderall. But Adderall drug manufacturers . . . say they cannot meet the growing demand for the product without looser limits from the DEA. The DEA questions whether there is actually a shortage of generic supplies, which are at an especially low supply . . . Despite the growing demand, Special Agent Gary Boggs of the DEA’s office of diversion control told the New York Times, “We believe there is plenty of supply.” Barbara Carreno, a DEA spokeswoman, told Reuters that . . .“Any shortage of these products is therefore a result of decisions made by industry regarding manufacturing or distribution,” Carreno told Reuters. But a Teva spokesperson told Reuters, “Our production facilities are currently running at maximum capacity for Adderall utilizing all available API (the drug’s active pharmaceutical ingredient). The catalyst for the problem is the quota system, not the business.”
So as Rob Port notes, “the DEA is limiting the supply of ingredients for a perfectly legal drug (when prescribed properly) which treats and alleviates a lot of suffering among Americans in order to fight the war on drugs.”
Greece is rapidly degenerating into third-world status. The UK’s Daily Mail reports:
Youngsters are being dumped by their parents who are struggling to make ends meet in what is fast becoming the most tragic human consequence of the Euro crisis. It comes as pharmacists revealed the country had almost run out of aspirin, as multi-billion euro austerity measures filter their way through society.
If you only read this much of the article, you would assume that the country’s “austerity measures” are responsible for the medicine shortage, but if you’ve ever opened an economics textbook, you’d know this can’t be the case. Shortages occur when prices aren’t able to readjust to higher demand. Why aren’t prices able to adjust? Keep reading.
Further evidence of Greeks feeling the pinch of austerity measures is the lack of aspirin and other medicines now available in the country.
Actually, that’s more inaccurate information. Keep reading further.
Pharmacists are struggling to stock their shelves as the Greek government, which sets the prices for drugs, keeps them artificially low. This means that firms are turning to sell the drugs outside of the country for a higher price – leading to stock depletion for Greeks. Mina Mavrou, who runs one of the country’s 12,000 pharmacies, said she spent hours each day pleading with drug makers, wholesalers and colleagues to hunt down medicines for clients. And she said that even when drugs were available, pharmacists often must foot the bill up front, or patients simply do without.
Finally, the Daily Mail gets to the actual cause after repeatedly stating the wrong cause. Shortages can happen anywhere the government fixes prices — or artificially restricts supply. Shortages are not a third world problem or a first world problem — they’re a government problem.
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