This Patent ‘Fix’ Will Backfire on Medical Research

The Senate HELP Committee will consider legislation this week that supporters claim will lower prescription drug costs. The proposal’s title — the Medication Affordability and Patent Integrity Act — sounds unobjectionable enough.

But behind that appealing label is a policy that could undermine the research ecosystem responsible for many of the medical breakthroughs Americans depend on.

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In 1978 the United States Supreme Court fired the shot heard ‘round the consumer finance world. In a now overlooked case involving a dispute between a bank in Nebraska and one in Minnesota, the Supreme Court ruled that for a credit card agreement between an individual living (or traveling) in one state and a bank located in the other, the interest rates terms of the contract would be governed by the law of the state in which the bank is located, not the consumer.

The effect of the Supreme Court’s ruling (known since as the Marquette case) was to allow consumers residing in states with low ceilings on permissible interest rates, such as Minnesota, to obtain credit cards from national banks located in states with higher interest rate ceilings, such as Nebraska.

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Spain has become one of Europe’s leading laboratories for cartel damages litigation without ever developing an effective collective redress mechanism. While the country still awaits the full implementation of the Representative Actions Directive, the ongoing automobile cartel damages litigation already reveals the shortcomings of the existing system. It is not simply that the current mechanisms are inefficient, their complexity may itself become a litigation asset for defendants. The seven collective claims filed by the Spanish Consumers’ Organisation (OCU) expose a paradox at the heart of Spanish collective redress: a system that generates procedural complexity before judgment and individualized enforcement after judgment.

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This year, two competing academic worldviews are stepping up to help train the next generation of economic, legal and policy personnel. The stakes are high. As we know, personnel is policy and the battle over economic policy is increasingly a battle over institutional talent pipelines.

The first is the Institute for Consumer Financial Choice (ICFC) at the Law and Economics Center, at George Mason University’s Antonin Scalia Law School. The ICFC will champion rigorous empirical academic research on issues related to consumer choice. No one understands consumers better than consumers themselves.

For the rapidly growing number of Americans earning income independently, work doesn’t come with a benefits department. That’s one reason why “portable benefits” reforms have been sweeping through statehouses and are beginning to attract serious attention on Capitol Hill.

At their core, portable benefits mirror worker-owned flexible or health savings accounts, but can pay for a broader range of products and services. Generally speaking, a business (or other client) can decide — voluntarily — to offer contributions as part of an independent worker’s compensation package.

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Over about two decades, China’s export-driven industrial and trade policies have transformed global markets in critical materials and technologies. These policies involve a complex mix of competitive effects, including depressed prices reflecting scale economies, potential subsidy-driven distortions in output, quality, variety, and innovation, and inflated prices arising from periodic deployment of export controls. In this environment, U.S. antitrust law faces a challenge: how to preserve open markets that enable entry by efficient competitors while addressing anticompetitive distortions arising from foreign state mercantilism. Doctrinally, this tension is reflected in the caution expressed by the Matsushita decision against suppressing efficient foreign competition and the emphasis placed by the Alcoa decision (and reflected in the Foreign Trade Antitrust Improvements Act) on capturing foreign conduct that harms competitive conditions in U.S. markets. Prior efforts to apply antitrust law to state-coordinated export cartels in vitamin C and other raw materials markets foundered on a rigid understanding of the sovereign compulsion doctrine. However, case law supports a more calibrat­ed approach that treats sovereign compulsion as part of a multi-factor comity analysis rather than a categorical bar to enforcement. In conjunction with trade remedies, this framework may allow antitrust to play a limited but meaningful role in targeting mercantilist distortions while protecting competitive markets.

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As one of his first acts in office, President Trump rescinded President Biden’s executive order imposing basic safety reporting requirements on artificial intelligence (AI) companies. A few days later, Trump issued an executive order directing federal officials to change existing policies that might inhibit AI development. Six months later, the White House released its AI Action Plan, titled “Winning the Race,” that called for removing barriers to innovation, cutting “red tape,” and revising federal safety frameworks to eliminate references to climate change, misinformation, and diversity.

The notion of an AI race against China is at the center of the administration’s deregulatory turn. The AI Action Plan begins by stating: “The United States is in a race to achieve global dominance in [AI]. Whoever has the largest AI ecosystem will set global AI standards and reap broad economic and military benefits.” It sets “dominance in this global race” as its primary goal. Vice President Vance has raised concerns that, if America pauses AI development to focus on safety issues, we could “find ourselves all enslaved to P.R.C.-mediated A.I.” Secretary of Defense Pete Hegseth recently ordered the integration of AI into a variety of military systems, asserting that “[m]ilitary AI is going to be a race … and therefore speed wins” and stating: “We must accept that the risks of not moving fast enough outweigh the risks of imperfect alignment [between humans and AI].”

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Americans have an abundance of payment mechanisms available to them, including cash, debit cards, credit cards, and others. Although inflation has eroded purchasing power, by world standards, the U.S. dollar remains a bastion of stability and credibility. In this menagerie, stablecoins and cryptocurrency remain niche payment products for many Americans.

The relative novelty of digital assets is reflected in the current heated Beltway debate between policy wonks and industry experts. So why should everyday Americans care about legislation like the GENIUS Act (enacted last year to create a regulatory framework to facilitate stablecoin adoption) or the Clarity Act, which got one step closer to becoming law yesterday, for crypto? Because even though use today is not yet ubiquitous, the stakes are huge — nothing short of the United States’s future global financial leadership and civil liberties for all Americans.

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Mercatus scholars are helping to deliver policy outcomes that improve people’s lives. Liya Palagashvili’s research focuses on empowering independent workers through portable benefits—benefits that aren’t tied to a specific employer but travel with the worker. Liya believes the issue of portable benefits will be central to the American workforce of the 21st century: “The portable benefits revolution has arrived!” She has driven a niche policy idea to the top of the congressional agenda; the story below shows the difference this idea is making in the lives of everyday Americans.

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