When Healthy Policy Neglects Economic Principles, Patients Suffer

The healthcare sector of the U.S. economy is extraordinarily dynamic and complex, providing constant challenges for policymakers and regulators working to improve healthcare markets. However, recent research and policies suggest the greatest challenges for policymakers might be their misunderstanding of economic fundamentals.

Earlier this year, the Annals of Internal Medicine journal published a paper which found the prices increased for nearly 100 drugs while they were in a shortage between 2015 and 2016. The paper also notes these “price hikes” (price increases) were less severe in markets with comparatively more competitors (defined as more than three drug providers).

Although the authors consider these findings “mysterious,” they confidently offered policy recommendations to correct “the imbalance between supply and demand.” As they stated in their conclusion, “If manufacturers are observed using shortages to increase prices, public payers could set payment caps for drugs under storage and limit price increases.”

The situation described above, and the folly of its policy prescription, are no mysteries for anyone who understands basic economics.

FDA Still Hooked on Meddling in Nicotine Markets

Back in April, the Food and Drug Administration announced plans to reduce nicotine levels in cigarettes to help current smokers quit and prevent future generations from starting. In an op-ed I wrote for Inside Sources, I argued such efforts are unlikely to help and will likely cause considerable harm.

At the time, lawmakers also pressured the FDA to regulate e-cigarettes, worried they were steering younger generations into nicotine addiction. In the same op-ed, I warned that regulating e-cigarettes, like regular cigarettes, “will also lead to serious harm guided by good intentions.”

Unfortunately, more “good intentions” have followed.

In early September, the FDA began an anti-vaping campaign to deter teens from vaping and issued information requests to e-cigarette companies to determine how popular these products were among younger demographics. Two weeks later, the agency gave five e-cigarette producers 60 days to present it, “with robust plans on how they’ll [the producers] convincingly address the widespread use of their products by minors.”

FDA Struggles to Develop “Sugar Added” Labels for Honey and Maple Syrup

Last February, the Food and Drug Administration released guidance indicating it intends to require honey and maple syrup (as well as some cranberry) products to include “sugar added” labels with their nutritional content information. Concerned that “consumers would not be able to understand the relative significance of these sources of added sugars,” the FDA hopes new sugar added labels will help consumers make healthier choices. As FDA Commissioner Scott Gottlieb remarked, “We’ve made it our goal to increase consumer awareness of the quantity of added sugars in food products consistent with recent dietary guideline recommendations.”

These new labels follow guidelines established by the 2015-2020 Dietary Guidelines for Americans which “Defines ‘added sugars,’ in part, to include sugars that are either added during the processing of foods, or are packaged as such. The term includes…sugars from syrups and honey [italics mine].”

If you find the idea of requiring syrups and honey to have “sugar added” labels for containing sugars from syrups and honey confusing or misleading, you are in good company.

Let Competition, Not the FDA, Resolve the EpiPen Shortage

The Food and Drug Administration recently approved the first generic version of EpiPen. EpiPens provide swift, and potentially lifesaving, treatment for those with anaphylaxis (allergic reactions requiring emergency medicine). Anaphylaxis is surprisingly common, affecting between 1.6 percent and 5.1 percent of the U.S. population.

The release of a generic alternative to EpiPen provides medical and financial relief for millions of Americans. It also comes at a critical time. As FDA Commissioner Scott Gottlieb remarked, “This approval means patients living with severe allergies which require constant access to life-saving epinephrine should have a lower-cost option, as well as another approved product to help protect against potential drug shortages.”

Government vs. Private Efforts to Promote Breastfeeding: My Response to a Critic

I recently published an op-ed at The Hill entitled “Breastfeeding Controversy Shows Need for Private Efforts—Not Government Campaigns.”The piece came after U.S. ambassadors faced considerable criticism for attempting to block a World Health Assembly resolution calling for governments to devote more resources to promoting breastfeeding and to place more stringent advertising regulations on breastfeeding substitutes in developing nations.

Instead of criticizing politicians, I tried to address what I consider a more pressing question: Do we really want governments more involved in promoting global health efforts? My answer was no. To justify my stance, I provided peer-reviewed research indicating that government efforts to promote public health and improve living standards in developing countries have repeatedly failed. As an alternative, I provided evidence that private efforts to promote childhood nutrition (specifically breastfeeding) were more up to the task.

FDA Considers Regulating E-cigarette Juices

Last March, the U. S. Food and Drug Administration announced its intention to lower nicotine levels in cigarettes to prevent future generations from smoking and to help current smokers quit. In a piece I wrote in May for Inside Sources, I argued these regulations were unlikely to help and could possibly make things worse by motivating smokers to consume more cigarettes or switch to other, less healthy smoking products.

The FDA acknowledged this shortcoming in a regulatory notice which reads, “If a [regulatory] standard were to apply to cigarettes only, it could be substantially less effective.” But instead of heeding potential unintended consequences as a reason to refrain from regulation, the agency seems to be doubling down.

FDA Approves Medical App for Contraception

The Swedish phone app Natural Cycles recently made headlines for becoming the first app approved by the Food and Drug Administration for contraception. Natural Cycles uses morning temperature readings and its own algorithm to predict the user’s most fertile days (about ten days a month) during her ovulation cycle. The app has widespread popularity with nearly 700,000 users worldwide.

Although Natural Cycles is celebrated as being “first of its kind,” when we examine recent trends in medical technology, we find this story has been a long time coming.

Open Up Off-Label Drug Communication and Let the Market Work!

The Food and Drug Administration determines which drugs can be prescribed in the United States. However, the FDA does not tell physicians how to prescribe drugs. When physicians prescribe drugs for uses other than their FDA-approved use, they engage in off-label drug prescription.

Off-label drug prescription is extremely common. By some estimates, 25 percent of all prescriptions are for off-label uses. These rates can be exceptionally higher for conditions with few available treatments. Cancer, HIV/Aids, many mental illnesses, and large sections of pediatrics heavily depend on off-label drug prescriptions.

Three Reasons To Be Optimistic about Pharmaceutical Policy

To say the U.S. pharmaceutical market is highly regulated is an understatement. According to the RegData database developed by the Mercatus Center at George Mason University, the pharmaceutical and medical manufacturing industry as of 2014 had approximately 10,000 more restrictions than the median U.S. industry. Many of these restrictions are enacted by the Food and Drug Administration, which determines whether pharmaceuticals can enter the U.S. market legally. The approval process each drug undergoes is time-consuming (typically requiring 12 years) and expensive (costs can exceed $1 billion).

Political rhetoric suggests little is likely to change. Attorney General Jeff Sessions reportedly involves himself in the DEA’s distribution licenses to grow marijuana for medical research, an unprecedented role for his position. To combat the opioid crisis, President Trump called for fewer prescriptions and possibly the death penalty for illegal distribution. Both proposals create more barriers to patients seeking pain relief or suffering from addiction. The FDA recently began issuing warning letters to companies distributing goods containing kratom. Although the agency considers kratom to have “opioid properties,” kratom is legal in most states.

If Telemedicine Is Underachieving, Government Is to Blame

Telemedicine, the use of telecommunication technology to help administer medical care, is often credited with “radically changing” the healthcare market. Some have credited telemedicine with revolutionizing healthcare delivery, private practice, and outpatient care among other components of healthcare.

However, a recent CNBC article is receiving considerable attention for arguing that “telemedicine has been such a bust so far.” In the article, technology and health reporter Christina Farr contends telemedicine fails to live up to its reputation as “the next big thing in healthcare” and still finds itself on the outskirts of mainstream healthcare and medical practice.