Tales of competition through regulation III: pharma v. compounding pharmacies

Compounding pharmacies, which mix medications to order, are a corner of the drug business that has been much less heavily regulated than mass-manufacturing drug companies. As a result, the compounders began expanding their market presence as against the mass manufacturers, and even get into mass manufacturing methods themselves. The process accelerated in the past few years after tightened FDA control of conventional makers’ production practices (under GMP, or Good Manufacturing Practice, regulation) began to result in widespread production-line suspensions; for hospitals and other users, the availability of compounded alternatives is often the only fallback in the face of shortages.

Unfortunately, poor quality control at some compounders resulted in a series of fiascos culminating in a meningitis outbreak. Now the Washington Post reports that major drug companies are seizing the chance to hobble their competition by pressing for maximally burdensome regulation of compounders, including the addition of regulations unrelated to safety, such as rules aimed at restricting the compounding of formulas that imitate the action of patented products. Hospitals, which sometimes engage in compounding themselves to obtain medication for their patients, say overregulation could worsen the problem of drug shortages. [Kimberly Kindy and Lena Sun, Washington Post] Earlier on drug shortages here, here, etc.

To corral health care costs, look at medical liability

That’s former Obama Administration budget director Peter Orszag’s view [Bloomberg]:

Most of the costs in the U.S. health-care system are incurred in a small number of expensive cases. The top 25 percent of Medicare beneficiaries ranked by cost, for example, account for 85 percent of total spending. And the expenses in those cases are driven significantly by the recommendations that doctors make to pursue one treatment path and not another.

In making these choices, doctors are influenced by various things, including medical-school training, traditions among their peers, financial incentives (which are distorted by fee- for-service payments) and, yes, the medical-malpractice system. Improving the criteria for what constitutes appropriate care could significantly change doctors’ behavior and also save money, recent research by Michael Frakes of Cornell Law School suggests.

Lawyers roundup

  • Feds investigating prominent Texas attorney and many-time Overlawyered mentionee Mikal Watts [MySanAntonio via PoL]
  • Florida high court: lawyers not privileged to defame parties during informal witness questioning [Delmonico v. Traynor]
  • Client’s story: not only did attorney try to kill me, he also gave me bad advice [Lowering the Bar]
  • Some lawyers for city of Cleveland seek union representation, following municipal attorneys in S.F., D.C. and Houston [Cleveland Plain Dealer]
  • Watch what you say about lawyers, part CLXXVI [NYLJ, “shakedown”]
  • Former ATLA president Barry Nace fights disciplinary proceeding in W.V. [Chamber-backed WV Record]
  • Minnesota lawyer who billed client for time he spent having sex with her won’t be allowed to practice for more than a year [TheLawNet, earlier on this candidate for “ultimate Overlawyered story”]
  • Should she take the job offer from an apparently unethical attorney? If she has to ask… [Elie Mystal, Above the Law]

Bloomberg soda follies, cont’d

The mayor is urging New York state to adopt his city’s ban on large sugary drinks [NY Daily News, CBS New York] And under recently announced details, the city’s ban will prohibit the buying of 2-liter sodas with pizza deliveries and the buying of family pitchers at kid’s birthday party venues, even though such orders are commonly split among several customers in a party [New York Post]:

Typically, a pizzeria charges $3 for a 2-liter bottle of Coke. But under the ban, customers would have to buy six 12-ounce cans at a total cost of $7.50 to get an equivalent amount of soda.

“I really feel bad for the customers,” said Lupe Balbuena of World Pie in Carroll Gardens, Brooklyn.

It will also restrict the offering of mixers as part of bottle service in nightclubs.

“Smothered by safety”

Lenore Skenazy of Free-Range Kids is the guest essayist at Cato Unbound. Excerpt:

..any time a politician, principal, or bureaucrat wants to score points, he or she lets us know that kids are even more precious—and endangered—than we thought….

How far has society gone in dreaming up new dangers to protect our children from? Until you take a step back and look at all the new laws and regulations, you probably have no idea….

Over the summer, according to the Manchester, Connnecticut Patch, a local mom was charged with “risk of injury to a minor and failure to appear after police say she allowed her seven-year and 11-year old children to walk down to Spruce Street to buy pizza unsupervised.” This was a walk of half a mile….

…in the “real world,” stranger abductions are so rare that if for some reason you actually WANTED your child to be kidnapped by a stranger, do you know how long you’d have to keep your child outside, unattended, so that statistically the abduction would be likely to happen?

The answer is about 750,000 years, according to author Warwick Cairns. And after the first 100,000 years or so, your kid isn’t even cute anymore. …

At the same time, there is a parallel process going on the regulatory world, with bureaucrats looking ever more intently for ever less likely dangers, on the grounds that kids can never be safe enough. This explains things like the Consumer Product Safety Commission’s recall of a line of children’s jackets last year because the elastic waistbands had toggles on it “that could become snagged or caught in small spaces or doorways, which poses an entrapment hazard to children.”

Yes, it’s true: Those toggles could snag. Does that make them inherently more dangerous than, say, pigtails that could get caught in a door, or a charm bracelet that could get snagged on an electric window? I’m just free-associating products and problems here, because that’s what it feels like the CPSC does, too.

In the discussion, Skenazy is joined by Anthony Green, James A. Swartz and Joel Best.

Environment roundup