When Alfred Caronia worked for a drug company, he promoted some drug’s off-label use. The Department of Justice did not take kindly to Caronia’s behavior and sued him for violating the Food, Drug, and Cosmetic Act (FDCA). He was convicted, but appealed the conviction. Caronia argued that this commercial speech is protected by the first [...]
Read the rest of this entry »How to Survive a Plague
Last weekend, I watched the movie How to Survive a Plague. The movie discusses the AIDS activist group ACT UP (AIDS Coalition to Unleash Power). Although I am not a movie critic (you can see reviews by professional critics here), I do want to discuss one key issue that the move discusses: should the FDA liberalize its [...]
Read the rest of this entry »On California’s Rising Gas Prices
The episode may also serve as a reminder that the more layers of regulation we put on commerce, the less resilient is the system when something goes wrong. – Jim Hamilton For Californians (like myself) who want to know why gas prices spiked more than 50 cents in about a week, you can read a [...]
Read the rest of this entry »Plastic Surgery in China
China standard is living as funds from export industries eventually trickle down into the earnings of (some) ordinary Chinese. Where are the Chinese spending their newfound wealth? In part, the answer is self-beautification procedures. According to the Economist: “China performs more cosmetic surgery than any country except America and Brazil. Almost 1.3m licensed procedures were [...]
Read the rest of this entry »Why are there so few vaccine suppliers?
In many cases, only a handful of suppliers produce vaccines for a given disease. In fact, for several vaccine types the U.S. has fewer suppliers than countries with a smaller market and a higher level of government purchase. One reason for this finding could be strict government regulation. All vaccines must be approved by the [...]
Read the rest of this entry »Holistic Regulation
“We must have a strategy that regulates the financial system as a whole, in a holistic way, not just its individual components.” Ben S. Bernanke, “Financial Reform to Address Systemic Risk” at the Council on Foreign Relations, Washington, D.C., March 10, 2009 In a 2010 short paper, Brunnermeier, Hansen, Kashyap, Krishnamurthy and Lo (2010) [...]
Read the rest of this entry »The Demand for Policy Interventions
“Authors of economics books, essays, articles, and political platforms demand interventionist measures before they are taken, but once they have been imposed no one likes them. Then everyone—usually even the authorities responsible for them—call them insufficient and unsatisfactory. Generally the demand then arises for the replacement of unsatisfactory interventions by other, more suitable measures. And [...]
Read the rest of this entry »Does the U.S. Really Have a Free Market for Health Insurance?
Conventional wisdom holds that the U.S. has a free market for health insurance and Europe relies on a state-run, socialist health care system. The U.S. ‘free market’ for health insurance, however, is in fact strictly regulated. States exert significant authority over what benefits plans can offer and what premiums they charge. Consider the following evidence [...]
Read the rest of this entry »Setting FDA Standards
To what standard should the FDA hold new drugs? The FDA has a number of choices. Drugs companies could be required to prove that the drugs they make: Do no harm. Are more effective than placebos Are more effective than existing drugs Are more cost-effective than existing drugs, or Are both more effective and more [...]
Read the rest of this entry »Certificate of Need Stringency
Many states have certificate of need (CON) laws which restrict providers supply for certain procedures. A paper presented by Vivan Ho at AcademyHealth claimed that there were 37 states with a CON law for at least one procedure. Following up earlier research which found that CON laws decreased quality, Dr. Ho found that dropping CON [...]
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