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Popular Media Back in 2020, an academic paper suggested that over 80% of US physicians mistakenly thought that nicotine was a carcinogen. The implication of this finding was that . . .
Back in 2020, an academic paper suggested that over 80% of US physicians mistakenly thought that nicotine was a carcinogen. The implication of this finding was that perhaps physicians considered vaping (and even nicotine replacement therapy) almost as dangerous as smoking. But physicians are busy people, and I wondered if some, maybe most, might have misunderstood the question in the survey and assumed the researchers were asking about smoking.
Read the full piece here.
TOTM In 2020, an academic paper suggested that more than 80% of U.S. physicians mistakenly thought that nicotine was a carcinogen. The implication of this finding was that . . .
In 2020, an academic paper suggested that more than 80% of U.S. physicians mistakenly thought that nicotine was a carcinogen. The implication of this finding was that perhaps physicians thought vaping (and even nicotine-replacement therapy) to be almost as dangerous as smoking. But physicians are busy people and I suggest that some, maybe most, might have misunderstood the question in the survey and assumed the researchers were asking about smoking.
To test this hypothesis, I surveyed physicians to learn more about their actual knowledge and opinion. Additionally, the UK government is more supportive of vaping and other nontraditional nicotine-replacement therapies than U.S. government, so a comparison of UK and U.S. physicians was undertaken to see if government policy and advice affects physician knowledge and opinion.
I find that most physicians correctly recognize that nicotine does not cause cancer, but that far more U.S. physicians than UK physicians still believe that it is carcinogenic. Additionally, vaping is viewed far more positively as a smoking-cessation tool by the surveyed UK physicians than surveyed U.S. physicians, and this is partly caused by the mistaken stance by U.S. health authorities.
Popular Media This week the Federal Reserve announced that it expects a recession in the coming months. Companies are already engaging in hiring freezes and layoffs, and several economic . . .
This week the Federal Reserve announced that it expects a recession in the coming months. Companies are already engaging in hiring freezes and layoffs, and several economic indicators point to a pessimistic future. But a pending Department of Labor (DOL) rule could make this recession more severe by cutting off work opportunities for millions of Americans.
TOTM Regrettably, but not unexpectedly, the Federal Trade Commission (FTC) yesterday threw out a reasoned decision by its administrative law judge and ordered DNA-sequencing provider Illumina Inc. to . . .
Regrettably, but not unexpectedly, the Federal Trade Commission (FTC) yesterday threw out a reasoned decision by its administrative law judge and ordered DNA-sequencing provider Illumina Inc. to divest GRAIL Inc., makers of a multi-cancer early detection (MCED) test.
Popular Media More than two dozen members of Congress recently petitioned the Biden administration to upend America’s patent system – a move that could wreck our economy . . .
More than two dozen members of Congress recently petitioned the Biden administration to upend America’s patent system – a move that could wreck our economy and deprive consumers of life-enhancing new inventions.
Scholarship Abstract Importance Many physicians believe that most medical malpractice claims are random events. This study assessed the association of prior paid claims (including a single prior . . .
Importance Many physicians believe that most medical malpractice claims are random events. This study assessed the association of prior paid claims (including a single prior claim) with future paid claims; whether public disclosure of prior paid claims affects future paid claims; and whether the association of prior and future paid claims decayed over time.
Objective To examine the association of 1 or more prior paid medical malpractice claims with future paid claims.
Design, Setting, and Participants This study assessed the association between prior paid claims (including a single prior claim) with future claims; whether public disclosure of prior claims affects future paid claims; and whether the association of prior and future paid claims decayed over time. This retrospective case-control study included all 881,876 licensed physicians in the US. All data analysis took place between July, 2018 and January, 2023.
Exposure Paid medical malpractice claims.
Main Outcome and Measures Association between a prior paid medical malpractice claim and likelihood of a paid claim in a future period, compared with simulated results expected if paid claims are random events. Using the same outcomes, we also assessed whether public disclosure of paid claims affects future paid claim rates.
Results This study included all 881,876 physicians licensed to practice in the US at the time of the study. Overall, 3.3% of the 841,?961 physicians with 0 paid claims in the prior period had 1 or more claims in the future period vs 12.4% of the 34?,512 physicians with 1 paid claim in the prior period; 22.4% of the 4,189 physicians with 2 paid claims in the prior period; and 37% of the 1,214 physicians with 3 paid claims in the prior period. The association between prior claims and future claims was similar for high-medical-malpractice-risk and lower-risk specialties; 1 prior-period claim was associated with a 3.1 times higher likelihood of a future-period claim for high-risk specialties (95% CI, 2.8-3.4) vs a 4.2 times higher likelihood for lower-risk specialties (95% CI, 3.8-4.6). The predictive power of a prior paid claim for future claims declined gradually as the time since the prior claim increased, for prior or future periods up to 10 years. Public disclosure did not affect the association between prior and future paid claims.
Conclusions and Relevance In this study of paid medical malpractice claims for all US physicians, a single prior paid claim was associated with substantial, long-lived higher future claim risk, independent of whether a physician was practicing in a high- or low-risk specialty, or whether a state publicly disclosed paid claims. Timely, noncoercive intervention, including education, has the potential to reduce future claims.
Scholarship Abstract Congressional leaders, policy activists, and scholars contend that patents are a principal cause of rising drug prices. They argue that a solution exists in . . .
Congressional leaders, policy activists, and scholars contend that patents are a principal cause of rising drug prices. They argue that a solution exists in two federal statutes that allegedly authorize agencies to impose price controls on drug patents: 28 U.S.C. § 1498 and the Bayh-Dole Act. These “price-control theories of § 1498 and the Bayh-Dole Act” maintain that Congress has already endorsed the unprecedented and controversial policy of breaking patents to lower drug prices in private transactions in the healthcare market.
Neither § 1498 nor the Bayh-Dole Act authorize agencies to impose price controls, as confirmed by their plain text and by their interpretation by courts and agencies. Section 1498 is an eminent domain statute that applies only when a patent is used by and for the government, such for the military, the Post Office, or the Veterans Administration. The Bayh-Dole Act promotes commercialization of patented inventions derived from federal funding of upstream research; consistent with this commercialization function, this law specifies four delimited conditions when a federal agency may “march in” and license a patent when a patented product is not sold or available in the marketplace. Applying canons of statutory interpretation, the meaning of these two statutes is clear. Neither specifies that “price” triggers regulatory controls over private market transactions. Congress knows how to enact price-control laws, such as the Emergency Price Control Act of 1942 or when it specifies “reasonable price” as a goal of legislation. The price-control theories of § 1498 and the Bayh-Dole Act profess unprecedented agency powers lacking any authorization in existing statutes. Yet academic scholarship, as well as policy and legal work based on this scholarship, continue to promote the price-control theories of § 1498 and the Bayh-Dole Act. These are policy arguments masquerading as statutory construction.
Regulatory Comments Executive Summary The Federal Trade Commission (“FTC”) has issued an Advanced Notice of Proposed Rulemaking (“ANPR”) on “Commercial Surveillance and Data Security,” initiating a proceeding . . .
The Federal Trade Commission (“FTC”) has issued an Advanced Notice of Proposed Rulemaking (“ANPR”) on “Commercial Surveillance and Data Security,” initiating a proceeding intended to result in binding rules regarding “the collection, aggregation, analysis, retention, transfer, or monetization of consumer data and the direct derivatives of that information.”
There is reason to believe that streamlined and uniform federal data-security or privacy regulations could be both beneficial and within the FTC’s competence and authority. But the approach suggested by the ANPR—simultaneously sweeping and vague—appears very likely to do more harm than good. Most notably, the ANPR evinces an approach that barely acknowledges either the limits of the FTC’s authority or the tremendous consumer benefits produced by the information economy.
The FTC is uniquely positioned to understand the complexities entailed in regulating privacy and data security. It has expertise and experience in both consumer-protection and competition matters. With regard to privacy and data security, in particular, it has decades of experience bringing enforcement actions for violations of the FTC Act’s prohibition of deceptive and unfair practices. Its enforcement experience also has been bolstered by its statutory mission to conduct economic and policy research, which has, not incidentally, comprised numerous hearings, workshops, studies, and reports on issues pertinent to data policy.
The ANPR does not build on the Commission’s experience and expertise as it could, however, and its dearth of economic analysis is especially striking. Moreover, the Commission’s authority is not unbounded, and neither are its resources. Both limitations are salient when the Commission considers adopting substantive—or “legislative”— regulations under either Section 18 or Section 6 of the FTC Act. As we discuss below, the current proceeding is deficient on both substantive and procedural grounds. Absent an express grant of authority and the requisite resources from Congress, the Commission would be ill-advised to consider, much less to adopt, the kinds of sweeping data regulations that the Commercial Surveillance ANPR appears to contemplate.
The ANPR states that it was issued pursuant to the Commission’s Section 18 authority, which both grants and restrains the FTC’s authority to adopt regulations with respect to “unfair or deceptive acts or practices in or affecting competition” (“UDAP”). Rulemaking under Section 18 of the FTC Act requires that the Commission follow a careful process. As a preliminary matter, it must identify for both Congress and the public an area of inquiry under the Commission’s jurisdiction; the Commission’s objectives in the rulemaking; and regulatory alternatives under consideration. Unfortunately, the Commission has not met these obligations in this ANPR.
Under Section 18, the Commission may adopt “rules which define with specificity acts or practices which are unfair or deceptive acts or practices in or affecting commerce” under Section 5 of the FTC Act. Section 18 imposes express procedural requirements, in addition to those set out for this ANPR. These include, but are not limited to, requirements for a Notice of Proposed Rulemaking (“NPRM”). Section 18 also incorporates by reference the procedures prescribed by the Administrative Procedure Act.
As noted, Section 18’s requirements for an ANPR are brief and preliminary but they are nonetheless real. In contravention of the requirements of Section 18, this ANPR does not clearly describe any “objectives which the Commission seeks to achieve,” and it provides no indication of “possible regulatory alternatives under consideration by the Commission.” Instead, it provides a laundry list of putative harms, and it fails to identify even the most basic benefits that may be associated with diverse commercial-data practices. It does not describe the Commission’s current assessment of, or position on, those practices. And it provides no sense of the direction the Commission intends to take regarding potential rules.
Failing to identify the Commission’s objectives or proposals under consideration, this ANPR fails in its basic purpose to “invite… suggestions or alternative methods for achieving [the] objectives.”
Any rules the Commission issues under a Section 18 proceeding must emerge from a cost-benefit analysis. Both the potential harms and the benefits of challenged conduct must be well-defined, and they must be weighed against each other. Even at this early stage of the process, the FTC is obligated to provide more than a suggestion that some harm might be occurring, and to provide more than a hint of how it might handle those harms.
This is also good procedure for policymaking more generally, irrespective of the Commission’s statutory obligations under Section 18. Before engaging in a deeply interventionist regulatory experiment—such as imposing strict privacy regulations that contravene revealed consumer preferences—the Commission should publicly state empirically justified reasons to do so. In other words, there should be demonstrable market failures in the provision of “privacy” (however we define that term) before centralized regulation co-opts the voluntary choices of consumers and firms in the economy, and before it supplants the ability to redress any residual, cognizable harms through law enforcement with broad, economywide, ex ante rules.
Thus, a vital threshold question for any rules issued under this proceeding is whether and why markets operating without specific privacy regulation generate a suboptimal provision of privacy protection. Without this inquiry, it is unclear whether there are problems requiring regulatory intervention and, if so, what they are. Without knowing their purpose, any rules adopted are likely to be ineffective, at best, and harmful, at worst. They may increase costs for consumers and businesses alike, chill innovation, mandate harmful prescriptions for alleged privacy harms while failing to address the most serious and persistent harms, or exacerbate the risks of harm—or all of the above.
Particularly in the United States, where informational privacy is treated both legally and socially as more of a consumer preference (albeit, perhaps, a particularly important one) than a fundamental right, it is difficult to determine whether our current regime produces the “right” amount of privacy protection. That cannot be determined by observing that some advocates and consumers who are particularly privacy-sensitive opine that there should be more, or more of a certain sort; nor is it enough that there have been some well-publicized violations of privacy and cases of demonstrable harm. Indeed, the fact that revealed preferences in the market tend toward relatively less privacy protection is evidence that advocates may be seeking to create a level and a type of privacy protection for which there is simply no broad-based demand. Absent a pervasive defect that suggests a broad disconnect between revealed and actual preferences, as well as a pattern of substantial net harm, the Commission should be extremely cautious before adopting preemptive and sweeping regulations.
At a minimum, the foregoing indicates that the Commission must undertake several steps before this ANPR is close to satisfying the requirements of Section 18, not to mention good government:
The Commission must also adequately account for the potential harms to innovation and competition that can arise from the adoption of new privacy and data-security regulations. Resources that firms invest in compliance cannot be invested in product development, customer service, or any of a host of other ends. And compliance with overly broad constraints will often curtail or deter the sort of experimentation that is at the heart of innovation.
Moreover, there is a potential tension between privacy and data security, such that mandates to increase privacy can diminish firms’ ability to ensure data security. The EU’s experience with the General Data Protection Regulation (“GDPR”) has demonstrated some of this dynamic. These realities must be incorporated into the Commission’s assessment.
The Commission is obligated to consider the likely effects of data regulation on consumers and competition. That ought to be a requirement for regulation generally, but it is an express, statutory requirement for unfairness regulation under Section 18 of the FTC Act. The Commission is uniquely well-situated to meet that mandate by virtue of its distinctive, dual competition and consumer-protection missions. Indeed, the Commission’s antitrust-enforcement experience dates to the agency’s inception. In addition, the Commission can access the considerable expertise of its Bureau of Economics, which employs experts in both industrial organization and consumer-protection economics. Yet much of that expertise appears absent from the ANPR.
This ANPR does not specify, or even sketch, the data regulations being contemplated by the Commission. Neither does it specify the Commission’s goals in the rulemaking or alternative regulatory approaches under consideration, although both are required by statute. Consequently, one cannot assess the net effects of any proposed “commercial surveillance and data security” rule on competition or consumers, because there simply is no proposed rule to assess.
The economic literature, however, does suggest caution:
The literature on the effects of GDPR and other data regulations is particularly instructive. Although it is neither definitive nor complete, it has thus far found slender (at best) benefits to competition or consumers from data regulations and considerable costs and harms from their imposition. Further experience with and study of data regulations could yield a more nuanced picture. And, again, the FTC is well-positioned to contribute to and foster a greater understanding of the competitive effects of various types of data regulation. Doing so could be greatly beneficial to policymaking, competition, and consumer welfare, precisely because specific data practices can produce substantial benefits, harms, or a complex admixture of the two. But documented harms and speculative benefits of regulation recommend caution, not blind intervention.
The Commission should take account of a further reality: the rules it contemplates will be created in an environment filled with other privacy regulators. Although the United States does not have a single, omnibus, privacy regulation, this does not mean that the country does not have “privacy law.” Indeed, generally applicable laws providing a wide range of privacy and data-security protections already exist at both the federal and state level. These include consumer-protection laws that apply to companies’ data use and security practices, as well as those that have been developed in common law (property, contract, and tort) and criminal codes. In addition, there are sector-specific regulations pertaining to particular kinds of information, such as medical records, personal information collected online from children, and credit reporting, as well as regulations prohibiting the use of data in a manner that might lead to certain kinds of illegal discrimination.
Despite the FTC’s noted experience in a certain slice of privacy regulation, Congress has not made the FTC the central privacy regulatory body. Neither has Congress granted the Commission the resources likely required for such a regulator. Congress has wrestled with complex tradeoffs in several areas and has allowed—through design and otherwise—various authorities to emerge. Where Congress has provided for privacy regulation, it has tailored the law to address specific concerns in specific sectors, or with respect to specific types of information. Moreover, in each case, it has balanced privacy and security concerns with other policy priorities. That balancing requires technical expertise, but it also entails essentially political judgements about the relative value of diverse policy goals; in that latter regard, it is a job for Congress.
There are, as well, questions of resource allocation that may attend an express statutory charge. We cannot gainsay the importance of the FTC’s privacy and data-security enforcement work under Section 5 of the FTC Act. At the same time, we cannot help but notice a misfit between the Commission’s congressionally allocated resources and the obligations that are entailed by data regulations of the scope contemplated in the ANPR. By way of contrast, we note that, since the compliance date of the Health Insurance Portability and Accountability Act (“HIPAA”) privacy rule, the U.S. Department of Health and Human Services (“HHS”) Office of Civil Rights (“OCR”) has investigated and resolved nearly 30,000 cases involving HIPAA-covered entities and their business associates; for appropriate cases of knowing disclosure or obtaining of protected health information, OCR has referred more than 1,500 cases to the U.S. Department of Justice (“DOJ”) for criminal prosecution.
In his dissent from the issuance of this ANPR, former Commissioner Noah Phillips noted the massive and complicated undertaking it initiates:
Legislating comprehensive national rules for consumer data privacy and security is a complicated undertaking. Any law our nation adopts will have vast economic significance. It will impact many thousands of companies, millions of citizens, and billions upon billions of dollars in commerce. It will involve real trade-offs between, for example, innovation, jobs, and economic growth on the one hand and protection from privacy harms on the other. (It will also require some level of social consensus about which harms the law can and should address.) Like most regulations, comprehensive rules for data privacy and security will likely displace some amount of competition. Reducing the ability of companies to use data about consumers, which today facilitates the provision of free services, may result in higher prices—an effect that policymakers would be remiss not to consider in our current inflationary environment.
This is particularly true given the Commission’s long history of work in this area. The Commission has undertaken decades of investigations and a multitude of workshops and hearings on privacy and related topics. This ANPR nods to that history, but it does not appear to make much use of it, possibly because much of it contains lessons that pull in different directions. Overall, that impressive body of work does not remotely point to the need for a single, comprehensive privacy rule. Rather, it has demonstrated that privacy regulation is complicated. It is complicated not just as a technical matter, but also because of the immense variety of consumers’ attitudes, expectations, and preferences with respect to privacy and the use of data in the economy.
The Commercial Surveillance ANPR poses 95 questions, many of which will find some answers in this prior history if it is adequately consulted. The Commission has generally evidenced admirable restraint and assessed the relevant tradeoffs, recognizing that the authorized collection and use of consumer information by companies confers enormous benefits, even as it entails some risks. Indeed, the overwhelming conclusion of decades of intense scrutiny is that the application of ex ante privacy principles across industries is a fraught exercise, as each industry—indeed each firm within an industry—faces a different set of consumer expectations about its provision of innovative services and offering of privacy protections.
These considerations all militate in favor of regulatory restraint by the FTC as a matter of policy. They also require restraint, and an emphasis on established jurisdiction, given the Supreme Court’s recent “major questions” jurisprudence. As noted in the statements of several commissioners, West Virginia v. EPA clarifies the constitutional limits on an agency’s authority to extend the reach of its jurisdiction via regulation. In brief, the broader the economic and political sweep of data regulations the Commission might propose, the more likely it is that such regulations exceed the FTC’s authority. If the “major questions doctrine” is implicated, the burden is on the agency to establish the specific grant of authority that is claimed. Moreover, the Court was clear that a merely colorable claim of statutory implementation is inadequate to establish the authority to issue sweeping regulations with major economic and political implications.
Download the full comments here.
 Trade Regulation Rule on Commercial Surveillance and Data Security, 87 Fed. Reg. 51273 (Aug. 22, 2022) (to be codified at 16 C.F.R. Ch. 1) [hereinafter “ANPR” or “Commercial Surveillance ANPR”].
 Id. at 51277.
 Id. at 51276.
 That is, “unfair or deceptive acts or practices in or affecting commerce,” as they are prohibited under Section 5 of the FTC Act, 15 U.S.C. § 45(a)(1).
 15 U.S.C. § 57a.
 15 U.S.C. § 57a(b)(2)(A).
 15 U.S.C. § 57a(a)(1)(B).
 15 U.S.C. § 57a(b)(1) (“When prescribing a rule under subsection (a)(1)(B) of this section, the Commission shall proceed in accordance with section 553 of title 5.”)
 15 U.S.C. § 57a(b)(2)(i).
 15 U.S.C. § 57a(b)(2)(ii).
 See Section III, infra (regarding the role of cost-benefit analysis under Magnuson-Moss and the statutory requirements of Section 18).
 Except, of course, when it comes to government access to private information, i.e., under the Fourth Amendment.
 See, e.g., ANPR, supra note 1 at 51273-75.
 The purported definition of consumer data in the ANPR, and the scope of activities around consumer data, are so overbroad as to encompass virtually the entirety of modern economic activity: “the collection, aggregation, analysis, retention, transfer, or monetization of consumer data and the direct derivatives of that information. These data include both information that consumers actively provide—say, when they affirmatively register for a service or make a purchase—as well as personal identifiers and other information that companies collect, for example, when a consumer casually browses the web or opens an app. This latter category is far broader than the first.” Id. at 51277.
 See, e.g., Coline Boniface, et al., Security Analysis of Subject Access Request Procedures, in Privacy Technologies & Policy: 7th Annual Privacy Forum (Maurizio Naldi, et al. eds., 2019).
 See, e.g., Jin-Hyuk Kim & Liad Wagman, Screening Incentives and Privacy Protection in Financial Markets: A Theoretical and Empirical Analysis, 46 RAND J. Econ. 1 (2015).
 See, e.g., Jian Jia, Ginger Zhe Jin & Liad Wagman, The Short-run Effects of the General Data Protection Regulation on Technology Venture Investment, 40 Marketing Sci. 661 (2021).
 See, e.g., FTC Act, 15 U.S.C. § 45(a) et seq.
 See Privacy-Common Law, Law Library —American Law and Legal Information, http://law.jrank.org/pages/9409/Privacy-Common-Law.html (last visited Oct. 16, 2022).
 See, e.g., Comments of the Association of National Advertisers on the Competition and Consumer Protection in the 21st Century Hearings, Project Number P181201, available at https://docplayer.net/93116976-Before-the-federal-trade-commission-washington-d-c-comments-of-the-association-of-national-advertisers-on-the.html: [T]he Health Information Portability and Accountability Act (“HIPAA”) regulates certain health data; the Fair Credit Reporting Act (“FCRA”) regulates the use of consumer data for eligibility purposes; the Children’s Online Privacy Protection Act (“COPPA”) addresses personal information collected online from children; and the Gramm–Leach–Bliley Act (“GLBA”) focuses on consumers’ financial privacy; the Equal Employment Opportunity Commission (“EEOC”) enforces a variety of anti-discrimination laws in the workplace including the Pregnancy Discrimination Act (“PDA”) and American with Disabilities Act (“ADA”); the Fair Housing Act (“FHA”) protects against discrimination in housing; and the Equal Credit Opportunity Act (“ECOA”) protects against discrimination in mortgage and other forms of lending. Id. at 6.
 Dep’t Health & Human Servs., Health Information Privacy, Enforcement Highlights, https://www.hhs.gov/hipaa/for-professionals/compliance-enforcement/data/enforcement-highlights/index.html (HHS Office of Civil Rights, last reviewed Sep. 14, 2022).
 ANPR at 51293 (Dissenting Statement of Comm’r Noah J. Phillips).
 See W. Virginia v. Env’t Prot. Agency, 142 S. Ct. 2587, 2595 (2022) (citing a line of cases including Utility Air Regulatory Group v. EPA, 573 U. S. 302 (2014); Gonzales v. Oregon, 546 U. S. 243 (2006); FDA v. Whitman v. American Trucking Assns., Inc., 531 U. S. 457, 468 (2001); and Brown & Williamson Tobacco Corp., 529 U. S. 120, 159 (2000)).
 See id. at 2613 (citing William Eskridge, Interpreting Law: A Primer on How to Read Statutes and the Constitution 288 (2016)).
 Id. at 2608-09.
Scholarship COVID-19 vaccine mandates are in place or being debated across the world. Standard neoclassical economics argues that the marginal social benefit from vaccination exceeds the . . .
COVID-19 vaccine mandates are in place or being debated across the world. Standard neoclassical economics argues that the marginal social benefit from vaccination exceeds the marginal private benefit; everyone vaccinated against a given infectious disease protects others by not transmitting the disease. Consequently, private levels of vaccination will be lower than the socially optimal levels due to free-riding, which requires mandates to overcome the problem. We argue that universal mandates based on free-riding are less compelling for COVID-19. We argue that because the virus can be transmitted even after receiving the vaccine, most of the benefits of the COVID-19 vaccine are internalized: vaccinated individuals are protected from the worst effects of the disease. Therefore, any positive externality may be inframarginal or policy irrelevant. Even when all the benefits are not internalized by the individual, the externalities mainly are local, mostly affecting family and closely associated individuals, requiring local institutional (private and civil society) arrangements to boost vaccine rates, even in a global pandemic. Economists and politicians must justify such universal vaccine mandates on some basis other than free-riding.
Read the full paper here.