RealClearInvestigations' Picks of the Week
December 25 to December 31, 2022 In RealClearInvestigations, Mark Hemingway reports on new federal drug-pricing legislation that critics are calling an unprecedented federal power grab -- more akin to price-fixing than negotiation. Hemingway reports: -
Under this year's bipartisan, $740-billion Inflation Reduction Act, drugmakers are required to pay rebates to Medicare to match the amounts certain drugs rise faster than annual inflation – regardless of why the prices rose. -
The law does not provide an appeals process. -
And starting in 2026, Health and Human Services can “negotiate” a “maximum fair price” for certain drugs bought by Medicare. -
In this case, “negotiate” means HHS determines the price it wants to pay for a specified medicine. Sure, drug makers can counteroffer, but if HHS doesn’t budge, the company faces a “noncompliance” excise tax of up to 1,900% of the medicine’s daily U.S. revenue. -
At issue now are a small number of high-priced medicines, but critics say this new authority could set a far-reaching precedent for Medicare, which buys more than 30% of all prescription drugs.
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Legal experts see clear constitutional grounds to a challenge: the Fifth Amendment's ban on taking property without just compensation and the Eighth Amendment's on “excessive fines." -
“No matter how obscured by a regulatory haze, strong-arm robbery is not a ‘negotiation’ for a ‘fair’ price,” says a free-market advocate.
Biden, Trump and the Beltway From the Annals of Nice Work If You Can Get It: One of the most common and potentially corrupt career paths in Washington is the transition from federal regulator to lobbyist for companies overseen by one’s former agency. The arrest of cryptocurrency billionaire Sam Bankman-Fried is shining light on this lucrative practice. This article reports that as CEO of FTX, a crypto exchange, Bankman-Fried hired multiple former federal regulators who helped connect him with top officials at the Commodity Futures Trading Commission (CFTC), the agency he hoped would be charged with regulating his industry, emails show. Quote: Many of Bankman-Fried’s top deputies were former regulators. Ryne Miller, FTX general counsel, previously served as legal counsel to Gary Gensler, the then-CFTC Chairman who is now the chairman of the SEC. Mark Wetjen, FTX’s former head of policy and regulatory strategy and current director at LedgerX, a FTX affiliate, formerly served as the acting chairman and a commissioner at the CFTC after being nominated to the position by President Obama. Jill Sommers, another former CFTC commissioner, also served on the FTX U.S. Derivatives Board of Directors. … “These few emails show that the CFTC had an open-door policy to meet basically whenever FTX wanted to meet, including [with] the then-acting chair,” Dennis Kelleher, president of Better Markets, a nonprofit that advocates for financial regulation, told The Times. “FTX hired former CFTC officials for the purpose, obviously, to access and influence the CFTC, where FTX had a pending radical proposal to dramatically change the structure and operations of clearinghouses.” From the Annals of Your Government Hard at Work: U.S. Immigration and Customs Enforcement (ICE) admitted it has “no records” of the 377,980 individuals monitored by the agency’s “Alternatives to Detention” (ATD) program used to electronically track illegal immigrants released into the country. The agency made this admission in response to a Freedom of Information Act request from Syracuse University’s Transactional Records Access Clearinghouse regarding those in ATD custody from the start of fiscal year 2019 to August 2022. From the article: “ICE’s response that they could no longer find records on immigrants in Alternatives to Detention (ATD) that they had previously released came as a shock, particularly after they informed us recently that they had been misleading the public for several months by releasing extremely inaccurate ATD data. The agency really needs to come clean. The American public deserves to have accurate data about the ATD program,” TRAC assistant Professor Austin Kocher told the Daily Caller News Foundation. Other Biden, Trump and the Beltway Other Noteworthy Articles and Series Two debilitating strokes had left Robert Heard with halting speech, an enlarged heart and violent tremors. At the end of a long process seeking social security disability benefits, the 47-yearold electrician had one final step: A vocational expert hired by the Social Security Administration had to tell the judge if there was any work Heard could still do despite his condition. “Heard was stunned,” this article reports, “as the expert canvassed his computer and announced his findings: He could find work as a nut sorter, a dowel inspector or an egg processor – jobs that virtually no longer exist in the United States.” From the article: Every year, thousands of claimants like Heard find themselves blocked at this crucial last step in the arduous process of applying for disability benefits, thanks to labor market data that was last updated 45 years ago. The jobs are spelled out in an exhaustive publication known as the Dictionary of Occupational Titles. The vast majority of the 12,700 entries were last updated in 1977. The Department of Labor, which originally compiled the index, abandoned it 31 years ago in a sign of the economy’s shift from blue-collar manufacturing to information and services. The owners of 62 houses worth more than $1 million along the Connecticut Gold Coast got aid from a program originally intended to help low-income homeowners pay for repairs after Superstorm Sandy in 2012, according to a review of records in dozens of towns. The homeowners received a total of $6.4 million, or 15 percent of the $44 million in HUD aid that went to home repairs in the state. The payments, this article reports ... ... came after a little-noticed change to department regulations in 2013 allowed states to reimburse wealthy homeowners for home repairs. The change marked a significant policy shift in the only disaster program created to help low-income people. Though that change was limited to Sandy aid, HUD has since given other states similar flexibility after major disasters. … Officials from HUD and Connecticut, which distributed the federal aid, defended the reimbursements by pointing to Sandy’s devastating impact on wealthy communities, where some residents were forced to spend hundreds of thousands of dollars on repairs. “HUD recognizes that in high-cost real estate markets there may be an unmet housing need that extends to properties and areas with high market values,” the department said in a statement. Should people be defined by the worst thing they ever did? The Washington Post seems to answer yes in this article, which notes that the halls of Congress feature paintings and statues that “pay homage to 141 enslavers.” This statement is, of course, grossly misleading. George Washington and Thomas Jefferson and the 32 other slaveholders in a painting depicting the signing of the Declaration of Independence are not being celebrated for their commitment to chattel slavery – but, ironically, for embracing ideals that would lead to its destruction. From the article: All 11 states that joined the Confederacy have at least one statue depicting an enslaver or Confederate. But the homages to enslavers are by no means restricted to these states: Except for New Hampshire, all of the original 13 states have statues depicting enslavers or possible enslavers. Massachusetts, for example, is represented by John Winthrop, who is best known for proclaiming a “shining city on a hill” but who also enslaved at least three Pequot people and, as colonial governor, helped legalize the enslavement of Africans. Both of New York’s statues honor enslavers. One is Declaration of Independence co-writer Robert R. Livingston, who came from a prominent slave-trading family and personally enslaved 15 people in 1790. He also owned brothels that housed Black women who may have been enslaved. The other is former vice president George Clinton, who served under Jefferson and Madison and enslaved at least eight people in his lifetime. It is fine and good to periodically question those we honor. But articles such as this, which define often remarkable people by a single attribute, serve to abuse history, turning it into a vehicle of power rather than understanding. Coronavirus Investigations China’s hospitals were already overcrowded, underfunded and inadequately staffed in the best of times. But now, this article reports, with COVID spreading freely for the first time in China, the medical system is being pushed to its limits. The scenes of desperation and misery at the Tianjin Medical University General Hospital, captured on one of several videos examined by the New York Times, reflects the growing crisis. Even as cases rise, health workers on the front lines are also battling rampant infections within their own ranks. So many have tested positive for the virus in some hospitals that the remaining few say they are forced to do the job of five or more co-workers. From the article: A Shanghai hospital predicted half of Shanghai’s 25 million residents would eventually be infected and warned its staff of a “tragic battle” in the coming weeks, according to a now-deleted statement the hospital posted last week on the social media platform WeChat. … Medical staff say they could have avoided the medicine shortages that have forced some facilities to ration drugs. There also could have been more time to set up a more effective triage system to avoid overcrowding. One of the fundamental problems with China’s health system is its overreliance on hospitals for even the most basic care. Large, urban facilities like the Tianjin Medical University General Hospital, by number, account for only 0.3 percent of all health care providers in China, but they handled nearly a quarter of all outpatient visits in the country last year, data from the National Health Commission show. |
