HealthLawProf Blog

Research-Related Injuries

Interesting issues being discussed at ongoing meeting of Presidential Commission for the Study of Bioethical Issues. Washington Post article dealing with the Commission's recommendation of compensation for research-related injuries is here. [NPT]

Allowing Public Scrutiny of Science

Over two years ago, when President Obama eased restrictions on stem cell research, the President urged researchers in all areas to “follow science and not ideology,” reported here. One of the only ways the public can be assured this is happening is if scientists are allowed to talk freely to reporters about their work — without approval or chaperones from the public affairs office. That is one of the reasons agency policies need to undergo scrutiny.

This month, The Environmental Protection Agency released its draft scientific integrity policy. According to a report by the Society of Environmental Journalists (SEJ), the policy is troubling.  SEJ contends that “the policy leaves political appointees with dominant authority for message control,” and contains ambiguous wording that “may mean scientists must get permission before talking to a reporter,” and that reporters "might not be allowed to talk to the specific scientist they ask to interview.”  The policy was also criticized in a comment letter by the Public Employees for Environmental Responsibility as leaving whistle blowing scientists vulnerable to official reprisal.

[MM]

Worth Reading this Week

Cynthia Ho, Global Access to Medicine: The Influence of Competing Patent Perspectives, SSRN/Fordham Int'l L.J.  

Jeffrey Kahn, The Operation of the Individual Mandate, SSRN/Tax Notes

Paul Schwartz and Daniel Solove, The PII Problem: Privacy and a New Concept of Personally Identifiable Information, SSRN/NYU L.Rev.

[NPT]

 

WaPo on Comparative Effectiveness Research

I found this article by David Brown a good introduction to new directions in CER.  Some excerpts: 

The federal Agency for Healthcare Research and Quality, which this year is spending about $21 million on comparative effectiveness studies. . . . Only 1.5 percent of money spent on medical research goes to “outcomes research,” of which comparative effectiveness is a sub-category. About 13,000 new clinical studies start up each year; about 112,000 are running now. A meticulous search in 2008 revealed only 689 studies that fit the general description of “comparative effectiveness.” Many experts believe that’s not enough.

The Obama administration created a permanent stream of funding for comparative effectiveness research by establishing, as part of the Patient Protection and Affordable Care Act, an independent entity called the Patient-Centered Outcomes Research Institute, or PCORI. . . . 

The institute’s duties are to establish national priorities for this type of research, with input from patients, doctors, scientists, public-health officials and representatives of the health-care industry. It will eventually have about $550 million a year, provided by the federal government, to pay for studies and disseminate results. PCORI opened its office in Washington last month.

But not everyone is happy with this activity. Some critics see comparative effectiveness research as a Trojan horse that will eventually bring government control and rationing to every hospital and clinic in the land. Even if that doesn’t happen, they’re worried that “cost effectiveness” — a different concept, one that puts a price tag on patient outcomes such as illnesses averted or years of life saved — will make its way into medical decision-making.

I'm torn on the issue.  On the one hand, I am all for eliminating costly and ineffective procedures. On the other hand, I am extremely doubtful that health care cost savings are going to reach workers who are privately insured. In an employment market as bad as ours, employers are far more likely to simply pocket the savings, and transfer it to top managers (and perhaps shareholders--again, not that egalitarian an option, as the bottom 80% of households only hold about 9% of stocks).  There is a better case for saving taxpayers money, especially given how much of Medicare is financed via payroll taxes and premiums. However, if the past decade is any guide, the savings may just be channeled to wars and tax cuts tilted to the wealthy.  I don't know if these goals are any more meritorious than providing expensive placebos.  [FP]

Do No Evil: Googling Canadian Drug Imports

It has been a while since the topic of imported inexpensive Canadian drugs was hot, see here. However, one side effect of that trade came back to bite Google today as it was forced to forfeit the AdWords revenue it received related to Google searches for illegally imported prescription drugs. The DoJ press release is here and notes:

[A]s early as 2003, Google was on notice that online Canadian pharmacies were advertising prescription drugs to Google users in the United States through Google’s AdWords advertising program.  Although Google took steps to block pharmacies in countries other than Canada from advertising in the U.S. through AdWords, they continued to allow Canadian pharmacy advertisers to target consumers in the United States.  Google was aware that U.S. consumers were making online purchases of prescription drugs from these Canadian online pharmacies, and that many of the pharmacies distributed prescription drugs, including controlled prescription drugs, based on an online consultation rather than a valid prescription from a treating medical practitioner.  Google was also on notice that many pharmacies accepting an online consultation rather than a prescription charged a premium for doing so because individuals seeking to obtain prescription drugs without a valid prescription were willing to pay higher prices for the drugs.

The cost to Google? $500 million, representing "the gross revenue received by Google as a result of Canadian pharmacies advertising through Google’s AdWords program, plus gross revenue made by   Canadian pharmacies from their sales to U.S. consumers." [NPT]

The Medicare Eligibility Math

Austin Frakt at The Incidental Economist, here, demonstrates how it all falls apart.

Disease Outbreaks and Climate Change Adaptation

Although, incidence of malaria has decreased over the past century, a recent article points out the rising concern about new malaria risks worldwide brought about by global climate change. The article quotes a scientist with the Sudanese National Academy of Sciences explaining that because malaria is transmitted by mosquitoes, its distribution patterns can be altered by changes in weather conditions, including changes in temperature, humidity, rainfall and the general availability of fresh water.

The shifting distribution of water is certainly something that adaptation planners need to consider – the malaria risk and droughts in the Horn of Africa both examples of climate change effects with influences on the spread of illness. According to a recent article in Science Daily, there is also evidence that climate change is playing a role in disease outbreaks of diseases such as chytridiomycosis, and of Lyme disease, as the tick vector Ixodes scapularis expands its range. The same article suggests that climate change will render conditions more favorable for human bubonic plague, caused by the bacterium Yersinia pestiswhich, and is still reported regularly in Central Asia.

This and other evidence make the development of adaptation approaches a global health policy priority. And to work, it is generally agreed that top down approaches are rarely effective: the people who must implement the strategies – which are often rural, poor communities most vulnerable to these diseases - must be involved in the design and implementation. Nonprofit stakeholder groups like the Prolinnova network (whose brief is available here)emphasize the need to empower local communities and facilitate grassroots innovation to address adaptation strategies.

[MM]

Infection Control

Some impressive nuimbers from California hopsitals on infection control results, here. [NPT]

Guest Blogger J. Janewa OseiTutu: Traditional Medicinal Knowledge & Intellectual Property Rights

The World Health Organization (“WHO”) acknowledges traditional medicine and the role it plays in many societies. According to WHO, a majority of the population in some Asian and Africa countries rely on traditional medicine for their health care. In many industrialized countries, a majority of the population has used some form of traditional medicine in addition, or as an alternative, to traditional western medicine. Thus, one of the objectives of the WHO traditional medicine strategy is to help Member States facilitate the integration of traditional medicine into their national health systems. While WHO is focused primarily[1] on the health-related aspects of traditional medicinal knowledge, the World Intellectual Property Organization (“WIPO”), thorough its Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge, and Folklore (WIPO IGC), is working towards creating some form of international legal protection for this kind of knowledge. In 2009, the WIPO IGC was mandated to submit a text that will ensure effective protection of traditional knowledge, genetic resources, and traditional cultural expressions to the WIPO General Assembly when it meets this fall. 

Legal protection for traditional medicinal knowledge has become a somewhat controversial issue in global discussions about intangible property rights. Traditional medicinal knowledge is typically knowledge that is held by certain communities and that has been passed down from one generation to another. It is often based on genetic resources (usually from plants) that are located in a specific community, and whose valuable properties are known to those within the community. This medicinal knowledge may be highly valued locally, nationally, or even globally. Hence, the need to respect traditional knowledge and genetic resources has been addressed in international instruments like the Convention on Biological Diversity.

The intellectual property aspect arises when university researchers, multinational corporations, or others external to the traditional knowledge holding community seek to rely on the knowledge of these “local” or “indigenous” peoples to develop a new product, and subsequently obtain intellectual property protection. This has resulted in allegations of “biopiracy” and “misappropriation” of genetic resources. A well-known example of alleged biopiracy is that of the hoodia cactus plant. Several generations of the San people of southern Africa used this plant to stave off hunger. An extract from the plant was patented for its hunger-fighting properties, and licensed to the pharmaceutical giant, Pfizer. Yet, the traditional knowledge held by the San people of southern Africa about the use of the hoodia cactus as an appetite suppressant is not protectable under the current intellectual property system.

The question is whether, given the value of this medicinal knowledge, it should be protected by some kind of intangible property right. Pharmaceutical companies are able to obtain patent protection and a corresponding period of market exclusivity for the drugs they develop. Should traditional medicinal knowledge also be entitled to some form of protection, even if it is not novel in the patent law sense? It may not be novel, but traditional medicinal knowledge has been described as innovative because it is constantly evolving. Another common argument against any legal protection for such knowledge is that it is in the public domain, and part of the “common heritage of mankind.” However, this argument been criticized on many levels. For example, some commentators have characterized traditional knowledge as “developing country intellectual property” and classic intellectual property as “western” and therefore non-inclusive.

There are many complex legal and policy issues that arise in the discussions about legal protection for traditional knowledge. For instance, given the intergenerational nature of the knowledge, should the protection be perpetual? How does one define and identify the community that has rights to the traditional knowledge or genetic resources?  Is this a North-South issue, and will a legal right for traditional medicinal knowledge ultimately benefit developing countries and indigenous peoples? How will it impact access to traditional medicine? For a more comprehensive discussion of these issues, please see my 2011 article, A Sui Generis Regime for Traditional Knowledge: the Cultural Divide in Intellectual Property Law.

- J. Janewa OseiTutu

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[1] The Beijing Declaration, adopted by the WHO Congress 8 November 2008, refers to a global plan of action on public health, innovation and intellectual property.

Petrie-Flom Fellowships

At the request of the Petrie-Flom Center, I am posting this announcement:

"The Petrie-Flom Center is an interdisciplinary research program at Harvard Law School dedicated to scholarly research at the intersection of law and health policy, including issues of health care financing and market regulation, biomedical research and bioethics. The Academic Fellowship is a postdoctoral program specifically designed to identify, cultivate and promote promising scholars early in their careers. Fellows are selected from among recent graduates, young academics and mid-career practitioners who are committed to spending two years at the Center pursuing publishable research that is likely to make a significant contribution to the field of health law policy, medical innovation policy or bioethics. Our prior fellows have found employment as law professors at Harvard, UC Berkeley, BU, UCLA, Cornell and the University of Arizona. More information on the Center can be found here."

"Petrie-Flom fellowships are full-time, two-year residential appointments offering a $60K annual stipend and other research support. Fellows devote their full time to scholarly activities in furtherance of their individual research agendas. The Center does not impose teaching obligations on fellows, though in appropriate cases voluntary teaching opportunities may be made available. For further information on the program and eligibility requirements, please see the full Call for Applications here.  Completed applications must be received by 9:00 a.m. on November 14, 2011." (FP)

 

Worth Reading This Week

Nathan Cortez, Can Speech by FDA-Regulated Firms Ever be Noncommercial? SSRN/AJLM

Tim Vogus et al, Doing No Harm: Enabling, Enacting, and Elaborating a Culture of Safety in Health Care, SSRN

Anupam B. Jena et al, Malpractice Risk According to Physician Specialty, NEJM

Amanda C. Pustilnik, Pain as Fact and Heuristic: How Pain Neuroimaging Illuminates Moral Dimensions of Law, SSRN/Cornell L.Rev.

[NPT]

 

Perspectives on ACA Challenges

Two more of our esteemed colleagues have posted their views on the recent 11th Circuit decision: Bill Sage, here, Tim Jost, here. [NPT]

Tobacco Companies Challenge FDA Graphic Warnings

Not surprisingly, especially after the Supreme Court's decision in Sorrell v. IMS Health, major tobacco companies have challenged the FDA's new graphic warnings for cigarette packs. But even with the Court's heightened scrutiny for regulations of commercial speech, the FDA should prevail. The Court has clearly distinguished between restrictions of speech and mandatory disclosures that are designed to ensure that the public is not misled. Indeed, just last year, in Milavetz, the Court upheld required disclosures for professionals providing consumer assistance with bankruptcy proceedings. Pharmaceutical manufacturers still must disclose side effects of their drugs after Sorrell, and tobacco companies will have to provide adequate warnings about the risks of cigarette smoking.

[DO]

Drinking Water Contaminants and Small Businesses

Many health and environmental groups are urging the Environmental Protection Agency to regulate perchlorate in drinking water.  According to the Environmental Working Group report, perchlorate, the main ingredient of rocket and missile fuel, contaminates drinking water supplies, groundwater or soil in hundreds of locations in at least 43 states. EWG estimates that the drinking water of 20 million Americans is affected. The Environmental Protection Agency has not yet set a standard for this chemical under the Safe Drinking Water Act.  

On October 10, 2008, the EPA published a preliminary determination not to regulate perchlorate, but after receiving comments, has been reconsidering whether to regulate ever since. In 2009 EPA requested more comments in a supplemental request. In July, EPA Deputy Administrator Robert Perciasepe was encouraged to move forward with the regulation during a Senate Environment and Public Works Committee hearing. According to the environmental news reporting service Greenwire, industry opposes regulation by claiming exposure to low levels of the chemical are not harmful, and that reports of widespread contamination are due to improvements in perchlorate detection that can find even trace -- and safe -- amounts of the chemical in water. However, a number of studies suggest otherwise, including those used by the California Department of Public Health to justify regulating the chemical in its state program.   

Perchlorate is a specific example of one of EPA’s failure to identify and regulate contaminants under the SDWA, a failure documented by the General Accounting Office in a report entitled EPA Health Risk Assessments issued in July. Like so many of the regulatory efforts I have mentioned here this year, the costs of protecting the public health are again pitted against raising the costs of doing business. Not surprisingly, the next step in the process is for EPA to scrutinize how regulating perchlorate will affect business. EPA is required now to form a small business advocacy review (SBAR), consisting of obtaining comments from “small entity representatives” (SERs) when drafting a rule that could have a "significant economic impact."  SERs are selected from government, nonprofits and businesses.  Bigger businesses and other entities will continue to provide input during the formal notice and comment periods, but this step will reinforce EPA’s mandate to focus more closely on the economic impacts of decisions purported to be for the benefit of public health. 

[MM]

Social Media and Drug Promotion

For some time the FDA has been working on guidelines relating to the "Promotion of FDA-Regulated Medical Products Using the Internet and Social Media Tools." Along the way there have been public hearings, here, and missed deadlines, here. In the meantime pharmaceutical companies have been able to promote their wares online in relative safety thanks to a safe harbor provided by Facebook. Specifically, Facebook allowed pharmaceutical product pages to have comments turned off. Starting today that privilege has been revoked and the drug pages must have "open" Walls. The issues that arise are comprehensively explored by Christian Torres in the Washington Post, here. In brief, allowing others to inject praise on a drug's page could upset the FDA's requirement that marketing be balanced and, potentially, open the door to users posting about off-label uses, and impacting the manufacturer's duty to report adverse events (presumably by requiring proactive monitoring of critical posts). Given that there is something of a regulatory vacuum, product pages are disappearing faster than you can click "like." There is even a "Deathwatch" site, here, that is keeping track of the pages that the pharmaceutical companies have taken down. [NPT]

 

Guest Blogger Eleanor D. Kinney: Greetings from Indianapolis (alas not Puerto Vallarta)!!

El 6 de Agosto

Greetings from Indianapolis (alas not Puerto Vallarta)!!

 

 This is my last blog on health care in Mexico and North America. In this blog, I want to talk about the implications of free trade agreements for the health care sectors of the three countries of North America – The United States, Canada and Mexico. 

In 1947, twenty-three countries agreed to the General Agreement on Tariffs and Trade (GATT) to promote free trade in the world. Initially, GATT only addressed trade in goods.  However, since the Uruguay Round in 1994, the General Agreement on Trade and Services (GATS) also addresses trade in services, capital, and intellectual property. The trade agreements in the Uruguay round also established the World Trade Organization.  (World Trade Organization, Legal Texts).

The basic theory of free trade agreements is that free trade among private persons and enterprises is to be promoted and, as a corollary, public monopolies providing goods and services are to be discouraged.  This theory is at odds with the state of affairs in almost every national health care sector in the world.  In these health care sectors, private actors have demonstrated that they are not able to provide affordable and high quality health care services for all in need. In almost every country of the world, states have had had to subsidize health coverage for certain segments of the population – namely, the elderly, disabled and poor. Often this subsidy is accomplished through a public health insurance program. 

The impact of free trade agreements on the accessibility and affordability of health care services is a concern in the three countries of North America with their varied health care systems.  As discussed in prior blogs, the three health care sectors of North America are quite different and independent. Canada has an established public universal health insurance program. The US health care sector is undergoing reform to address major gaps in health coverage. Mexico too is expanding coverage in its less modern but advancing health care sector. 

 In 1993, the United States, Canada, and Mexico adopted and ratified the North American Free Trade Agreement (NAFTA).  NAFTA is open to any country in the world, including members of the European Union, upon meeting certain criteria.  NAFTA applies to all economic sectors including social services. The national governments of the three state parties must “ensure that all necessary measures” are taken in order to give effect to the NAFTA’s provisions, including their observance by state, provincial, and local governments.

The preamble of NAFTA expressly recognizes — as a cardinal principle — the right of parties “to preserve their flexibility to safeguard the public welfare.”  However, NAFTA does not contemplate the growth of public programs or the inauguration of new public programs. Both Chapter 11 (Investments) and Chapter 12 (Cross Border Trade in Services) provide that the operative provisions of each chapter do not apply if there are existing nonconforming measures, or the party establishes non-conforming measures within two years of NAFTA’s adoption — so long as these nonconforming measures are reserved in the appropriate annexes of NAFTA.  

In Chapter 11, NAFTA requires that parties and their political subdivisions provide investors of other North American countries with national treatment and also most favored nation treatment.   NAFTA Chapter 11 also contains a provision that parties may not “directly or indirectly nationalize or expropriate an investment of an investor of another Party in its territory or take a measure tantamount to nationalization or expropriation of such an investment…except under circumstances such as for a public purpose.”   

Chapter Eleven of NAFTA facilitates the settlement of investment disputes.  Specifically, Chapter Eleven permits an investor of one NAFTA Party to seek money damages for measures of one of the other NAFTA Parties that allegedly violates Chapter Eleven. Investors may initiate arbitration against the NAFTA Party under the Arbitration Rules of the United Nations Commission on International Trade Law or the Arbitration (Rules of the International Centre for Settlement of Investment Disputes ("ICSID Additional Facility Rules").  Department of State, NAFTA Investor-State Arbitrations.

The invocation of these investment provisions on the part of American health care providers is not a hypothetical possibility. It is noteworthy that an American entrepreneur, Melvin Howard, has brought an action against Canada under NAFTA for trade restrictions barring his investment in for-profit health care facilities in British Columbia.   In Centurion Health Corporation v. Government of Canada, the plaintiff claims that the Canadian public health insurance program violates the national treatment rule under NAFTA Article 1102 and the most favored nation rule under NAFTA Article 1103. Centurion Health Corporation v. Government of Canada, Revised Amended Statement of Claim (Feb. 2, 2009). The case is now before a NAFTA Investor-State arbitration proceeding. 

Trade policymakers must take care that free trade agreements do not undercut existing public health insurance programs or thwart the establishment of new public health insurance programs.  Regarding the first concern, private providers and insurers should not be able to gain extraordinary profits from public programs. Private health care providers and insurers have been able to make money in an imperfect health care services market. Yet neither providers nor insurers have been able to meet the needs of all citizens.   They thus should not be allowed to cherry pick privately funded patients at the expense of public programs.  

Regarding the second concern, investment protection rules such as those in NAFTA of Chapter Eleven should not be invoked if a country establishes a public health insurance program to meet coverage needs of any portion of the population now and in the future.

- Eleanor D. Kinney

Guest Blogger J. Janewa OseiTutu: Public Health and Intellectual Property - Seizure of Generic Drugs in Transit

In May 2010, Brazil and India filed complaints against the European Union (“EU”) and the Netherlands at the World Trade Organization (“WTO”) over the confiscation of generic drugs in transit. A settlement of the dispute between India and the EU was announced at the end of July 2011. 

The EU border seizures were part of its intellectual property enforcement program. The drugs in question were not patent protected in either the point of origin or the final destination. Brazil and India cited a number of provisions under the WTO Agreement on Trade-Related Intellectual Property Rights (“TRIPS”) and the General Agreement on Tariffs and Trade (“GATT”) in support of their complaints. In its WTO request for consultations, pursuant to the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (“DSU”), Brazil complained about the confiscation by Dutch authorities of a shipment of a generic drugs from India that were destined for Brazil. The shipment was seized in Amsterdam and returned to India. Brazil complained that many similar shipments had been seized while in transit through the Netherlands and alleged inconsistency with TRIPS and GATT. Similarly, India complained about the Dutch seizures of generic drugs originating from India and destined for developing countries like Nigeria and Peru.  

Brazil and India relied on different provisions of TRIPS in making their complaints. In its complaint, Brazil (unlike India) did not identify specific developing country issues or the relationship between intellectual property and public health as part of the basis for its complaint. I will focus on the Indian complaint, which has been settled, because it raises important arguments about the appropriate balance in TRIPS, the concerns of developing countries, and the need to interpret TRIPS provisions in light of the 2001 Doha Declaration on the TRIPS Agreement and Public Health (“Doha Declaration on Public Health”).

In paragraph 5 of its complaint, India argued that the regulations leading to the seizures of the generic drugs had a “serious adverse impact” on the ability of developing countries to protect public health and to ensure that their citizens would have access to the medicines they need. As part of its complaint, India cited article 7 of TRIPS, which identifies, as an objective of intellectual property protection, the promotion of innovation “in a manner conducive to social and economic welfare” and to a balance of rights and obligations. Article 8 of TRIPS, which was also cited, sets out the principles of the agreement, and provides that WTO member states may take measures to protect public health. In addition, India referred to article 12 (1) of the International Convention on Economic, Social and Cultural Rights, which recognizes that everyone has a right to the highest attainable level of physical and mental health.

Various commentators have argued for the need to interpret TRIPS in light of its principles and objectives as set out in articles 7 and 8 of the agreement. It would have been interesting to see how a WTO dispute resolution panel would approach the health and development issues raised in India’s complaint. A WTO panel last had the opportunity to address the balance between intellectual property rights and public health in the Canada-Pharmaceuticals dispute, which was decided in 2000. That case was analyzed and decided primarily based on the rights and interests of the patent holder. Arguably, however, if TRIPS is interpreted in light of its principles and objectives, and in light of the Doha Declaration on Public Health, a WTO panel hearing such a case today would need to take into account the balance between public health, access to medicines and the private rights of the patentee. I discuss this further in my forthcoming piece, Value Divergence in Global Intellectual Property Law, 87 Ind. L. J. (2012)

 Despite its efforts to examine the relationship between TRIPS and public health, it is not clear that a trade organization, like the WTO, would be prepared to take the lead in this regard, nor that it is the appropriate forum. Yet, in the current environment, where the trend is to increase intellectual property protection and enforcement through bilateral trade agreements, and agreements like the Anti-Counterfeiting Trade Agreement or the Trans-Pacific Partnership Agreement, a WTO panel decision favoring public health could serve as a helpful signal for developing countries, health organizations, and their advocates, that TRIPS does indeed recognize the need for balance.

- J. Janewa OseiTutu

Judge Sutton More Persuasive Than Judge Hull

We now have a Clinton appointee in the 11th Circuit who has sided with the opponents of the individual mandate. Ostensibly, this balances the Bush appointee in the 6th Circuit who sided with the proponents of the mandate. But Judge Jeffrey Sutton's opinion in the 6th Circuit is much more persuasive than Judge Frank Mays Hull's joint opinion with Judge Joel Dubina in the 11th Circuit.

Judges Dubina and Hull unreasonably discounted a few critical considerations. First, they recognized that the individual mandate may be justified as a means for Congress "to enforce its regulation of the health care industry" (page 164). And of course the individual mandate was adopted to make it possible for Congress to prohibit higher premiums for people with "preexisting conditions." If insurers soon must charge all comers the same rate, then individuals cannot be allowed to wait until they are sick to buy their health care coverage anymore than people can wait until their houses are ablaze to buy their homeowners insurance. Oddly, Dubina and Hill wrote that the implementation of Congress' ban on premium discrimination is not "in any way dependent on the individual mandate" (page 164).

Moreover, if the question is whether the individual mandate is necessary for implementing the ban on preexisting conditions clauses, then Dubina and Hull made the case very well when they observed that the federal flood insurance program has failed for lack of any purchase requirement by homeowners in flood plains (pages 117-119). And even under Dubina and Hull's understanding of the Commerce Clause power, Congress could mandate the purchase of flood insurance by making it a condition of purchasing a home in a flood plain.

Dubina and Hull also acknowledged that the key question for courts is whether the individual mandate preserves “'a distinction between what is truly national and what is truly local'" (page 104). Yet they took the surprising position that regulation of the health care industry is a matter of local concern even though the U.S. Supreme Court held 67 years ago that the commerce clause power permits Congress to regulate insurance companies. To be sure, as Dubina and Hull observed, Congress has chosen to leave much of insurance regulation to the states, but that reflects a decision by Congress not to exercise its full commerce clause power rather than a constitutional limitation on the power of Congress to regulate.

These and other weaknesses in the Dubina-Hull opinion reflect the same mistake other critics have made. The proper way to understand the individual mandate is to ask whether Congress can regulate the rate-setting practices of health insurance companies and whether the individual mandate is an appropriate component of such regulation. Dubina, Hull and other critics see the individual mandate much more as if it were a free-standing provision that must be justified without reference to its role in carrying out the full Patient Protection and Affordable Care Act.  

[DO]

Nicolas P. Terry: "Fear of Facebook: Private Ordering of Social Media Risks Incurred by Healthcare Providers"

For an excellent read, Nicolas P. Terry, Professor of Law at Saint Louis University School of Law and blogger extraordinaire on Health Law Prof, has published on SSRN the article " Fear of Facebook: Private Ordering of Social Media Risks Incurred by Healthcare Providers." Here is the abstract:

The last two years have seen important quantitative and qualitative shifts in social media use patterns in the healthcare environment. Reacting to present and future risks there has been a rapid deployment of private ordering: social media policies and other contractual constructs emanating from physicians, professional organizations, employers and educators. These private, often contractual attempts to regulate online interactions or social media conduct are not all benign, themselves creating ethical or legal risk. This article, a follow-up to Physicians And Patients Who ‘Friend’ Or ‘Tweet’: Constructing A Legal Framework For Social Networking In A Highly Regulated Domain, 43 IND. L. REV. 285 (2010), concentrates on social media and these new risk management constructs. Part II provides updated statistics on Internet use by healthcare workers and explores some of the scenarios that have led medical schools and healthcare entities to expressly address social media behavior. Part III inquires into how professional organizations or those who employ or credential physicians have attempted to change the rules of the game by promulgating social media policies and analyses some of the legal constraints on those policies. Part IV deals with the reality of medically relevant information about patients increasingly moving online and asks whether physicians should attempt to access information that might be useful or even life-saving. Finally, Part V describes how the patient-physician dialog has increasingly spilled out of the consulting room and onto social media sites and explores how physicians should react not only to overtures for social media friendship but also to online critical patient comments.

[KVT]

11th Circuit – Broccoli wins!

Hat tip to the Incidental Economist where Kevin Outterson has posted the following:  

I wanted to actually read the opinion before I posted (radical, I know). We have 3 votes that the Medicaid expansion is constitutional and that the individual mandate is fully severable. The court splits 2-1 on whether the individual mandate violates the Commerce Clause, with the majority answering in the affirmative.  The winning argument was broccoli, not inactivity.

No one should report this decision as “ObamaCare is unconstitutional.”  The most you can say is “two judges decided the individual mandate is unconstitutional under the Commerce Clause, but would have been constitutional if it had been more explicitly designed as a tax. The rest of health care reform is constitutional.” 

1.  Standing

I’ve argued before that the States don’t have standing to bring a challenge to the individual mandate.  This issue was briefed before the 11th Circuit, but the opinion sidesteps the issue entirely (at 10) since it is clear that the individual plaintiffs and NFIB have standing. Of course, it would have been big news if the states had been dismissed from the suit and it would have made it abundantly clear that this ruling only applies within the 11th Circuit.  (Some AGs improvidently claimed that the district court ruling applied in their home states as well).  The 11th Circuit missed a chance to dramatically reduce the number and type of plaintiffs.

After more than 40 pages summarizing the PPACA, the court reaches 3 substantive constitutional issues:  the Medicaid expansion under the 10th Amendment; the individual mandate under the Commerce Clause; and the individual mandate under the Tax Power.

2.  Medicaid Expansion

Red states have argued that the Medicaid expansion is unduly coercive as a “take it or leave it” offer from the federal government.  The relevant case is South Dakota v Dole, where the Supreme Court allowed the federal government to condition federal highway funds on state compliance with related laws such as the drinking age.  Under the Spending Clause, federal restrictions must be “reasonably related to the legislation’s stated goal.” (Dole at 207, 11th Cir at 56)  The states conceded the constitutionality of the Medicaid expansion under this test, but argued that it nonetheless violated the 10th Amendment by removing state choice and compelling states to act, with no other options (at 57).  This is the “commandeering” or “coercion” doctrine in the context of the Spending Clause.

The 11th Circuit found no coercion, for four reasons.  First, the states were told from the beginning that Medicaid could be modified unilaterally by the federal government, and Congress has not disappointed on that score (at 63-64).  Second, the feds pay for the lion’s share of the expansion costs (at 65-66). Third, unlike used care sales people who force you into a quick decision, states have 4 years to decide whether to participate.  Finally, the court finds that HHS need not cut all Medicaid funding for a non-compliant state; lesser punishments might follow a state’s decision.

3. Commerce Clause & Necessary and Proper Clause

As expected, the decision turns on the Commerce Clause substantial effects doctrine, as interpreted in Lopez, Morrison, and Raich, and a narrow view of the Necessary and Proper Clause from Comstock.  After a summary of the cases, the analysis begins on page 100. The court rejected the activity/inactivity distinction, popularized by Randy Barnett:

Nevertheless, we are not persuaded that the formalistic dichotomy of activity and inactivity provides a workable or persuasive enough answer in this case. Although the Supreme Court’s Commerce Clause cases frequently speak in activity-laden terms, the Court has never expressly held that activity is a precondition for Congress’s ability to regulate commerce—perhaps, in part, because it has never been faced with the type of regulation at issue here. (at 109)

But the good news for ACA doesn’t last, as the opinion finds the individual mandate unconstitutional, not so much for its own sake, but for the sake of the children. The court discusses a parade of horribles, things (like broccoli) that Congress could force us to buy.  The Court demands “sufficient and meaningful limiting principles” (at 113) that would prevent the government from making us buy broccoli:

From a doctrinal standpoint, we see no way to cabin the government’s theory only to decisions not to purchase health insurance. If an individual’s mere decision not to purchase insurance were subject to Wickard’s aggregation principle, we are unable to conceive of any product whose purchase Congress could not mandate under this line of argument (at 125).

In the end, the individual mandate is unconstitutional because the USG didn’t come up with a constitutionally relevant way to distinguish health insurance from broccoli.  Mariner, Annas & Glantz tried to do exactly that in the NEJM last January.  (The dissent discusses broccoli at 269)

The opinion offers several escape routes, akin to what Austin and I suggested previously:  carrots and sticks to encourage participation in the insurance market in lieu of a mandate. (Here’s another idea: delay Medicare & Medicaid eligibility by a month for every year a person doesn’t maintain coverage.  Clearly constitutional.)

The majority acknowledge that Massachusetts and New Jersey have apparently legal health insurance mandates (at 156), but goes on to say:

But if anything, this gives us greater constitutional concern, not less. Indeed, if the federal government possesses the asserted power to compel individuals to purchase insurance from a private company forever, it may impose such a mandate on individuals in states that have elected not to employ their police power in this manner.124 After all, if and when Congress actually operates within its enumerated commerce power, Congress, by virtue of the Supremacy Clause, may ultimately supplant the states. When this occurs, a state is no longer permitted to tailor its policymaking goals to the specific needs of its citizenry. This is precisely why it is critical that courts preserve constitutional boundaries and ensure that Congress only operates within the proper scope of its enumerated commerce power.

In order to distinguish Raich, the majority opinion minimizes the estimated damage that would flow from a repeal of the individual mandate (contrasting it to the “gaping hole” that Raich would have left for recreational marijuana use) (at 166).  I agree (would have been nice to cite us).  The court goes on to chide Congress for not making the individual mandate harsher, suggesting that tougher tax penalties might have improved the constitutional argument (at 166):

Eschewing the IRS’s traditional enforcement tools, the Act waives all criminal penalties for noncompliance and prevents the IRS from using liens or levies to collect the penalty. Id. § 5000A(g)(2). Thus, to the extent the uninsureds’ ability to delay insurance purchases would leave a “gaping hole” in Congress’s efforts to reform the insurance market, Congress has seen fit to bore the hole itself.

Finally, in a strange twist, the opinion attacks the individual mandate as “overinclusive” – covering both free riders and the (rare) person who will never obtain either health insurance or free care (126-31). In a truly disappointing section for libertarians, they suggest a more individualized process for determining whether the individual mandate should apply to a particular person.

“Tell me, Mrs. Bachman, are you now or have you ever been, or do you ever intend to be, a card-carrying member of a health plan?”.

4. Tax Power

If only Congress had imposed a tax on free riders, the case would be over (172-189).  (prior TIE coverage on the tax issue)  I propose this as the “constitutionally relevant” limiting principle needed for the Commerce Clause:  the fact that the provision would have been clearly constitutional as a tax.  Especially when the individual mandate is placed by Congress in the Internal Revenue Code.

5. Severabililty

As we’ve noted before, it makes no sense to kill the excise tax on devices, or to reverse transparency in gifts to physicians, or to kick people off Medicaid because the individual mandate is unconstitutional.  The court agrees, but takes a more careful look at 2 insurance related provisions:  guaranteed issue and the prohibition on preexisting condition exclusion (194-95).  This is a thoughtful approach:

our severability concern is only whether “it is evident” that Congress “would not have enacted” the two insurance reforms without the individual mandate. (at 197)

The conclusion:

In light of all these factors, we are not persuaded that it is evident (as opposed to possible or reasonable) that Congress would not have enacted the two reforms in the absence of the individual mandate. (at 204)

My summary of this opinion:  “two judges decided the individual mandate is unconstitutional under the Commerce Clause, but would have been constitutional if it had been more explicitly designed as a tax. The rest of health care reform is constitutional.” 

[KVT]