Overregulation: The View From a Helicopter Cockpit
Philip Greenspun discovers that an FAA inspector is happy to march a little helicopter charter outfit run by a single owner/pilot through the same paperwork slog that a much busier operation would face:
Finally, the FAA inspector looked at my random drug testing program to make sure that everything was in place. I’m subject to the same drug testing requirements as United Airlines. I am the drug testing coordinator for our company, so I am responsible for scheduling drug tests and surprising employees when it is their turn to be tested. As it happens, I’m also the only “safety-sensitive employee” subject to drug testing, so basically I’m responsible for periodically surprising myself with a random drug test. As a supervisor, I need to take training so that I can recognize when an employee is on drugs. But I’m also the only employee, so really this is training so that I can figure out if I myself am on drugs. As an employee, I need to take a second training course so that I learn about all of the ways that my employer might surprise me with a random drug test and find out about drug use. But I’m also the employer so really I’m learning about how I might trap myself. … Five minutes after the FAA inspector left, I received a phone call. “I’m from the FAA and we’d like to schedule an audit of your drug testing program.”
Things proceed to get crazier from there. And none of the craziness is likely to change so long as being worried about regulatory overkill is construed in Washington as being Against Air (or Food or Toy or Drug) Safety.
A Hospital Drug Shortage Made In Washington
As readers may know, I’ve been beating the drum for a while on the increasingly dangerous shortages that doctors are encountering in the availability of common, off-patent drugs used in hospital and clinical settings, including drugs that are important in chemotherapy, anesthesia, and infection control. Among the reasons for the shortages: the Food and Drug Administration has toughened its regulation of pharmaceutical makers in ways that lead to manufacturing line shutdowns and withdrawals from production.
John Goodman has a must-read blog post at Health Affairs Blog on the mounting crisis, amplified by a post by George Mason economist Alex Tabarrok at Marginal Revolution, getting into further specifics. In particular:
• 246 drugs are now considered to be in shortage, a record high, and the number has been rising for years. Rationing of scarce chemotherapy drugs is now making a difference in which patients have a chance at survival. In the absence of familiar compounds, doctors are falling back on inexact substitutes, sometimes more dangerous and less effective.
• After “tainted drugs” scares a few years ago, the FDA stepped up its Good Manufacturing Practice regulations, which control the production of pharmaceuticals. In particular, it now proclaims zero tolerance, barbed by tough fines, for many technical infractions whose actual impact on patient risk is at best doubtful, and it is unafraid of shutting down production lines again and again for retooling until its regulations are satisfied to the letter. It also changes its formulation and manufacturing requirements often, with scant forgiveness for makers who have trouble retooling to the new specifications quickly.
• Remarkably, the feds have inserted themselves into the role of central planners of drug output. Goodman:
For example, a drug manufacturer must get approval for how much of a drug it plans to produce, as well as the timeframe. If a shortage develops (because, say, the FDA shuts down a competitor’s plant), a drug manufacturer cannot increase its output of that drug without another round of approvals. Nor can it alter its timetable production (producing a shortage drug earlier than planned) without FDA approval.
That the results might include many unpleasant surprises will surprise only those unfamiliar with the record of a century of central planning failure.
Drug Violence in Mexico
The apparent drug gang killings of U.S. consular employees this weekend in Juarez, Mexico are a bloody reminder that President Obama is getting the United States involved in yet another war it cannot win. Drug gang killings also occurred in Acapulco, with a total of 50 such fatalities nationwide over the weekend.
Unfortunately, Obama has responded to the latest incident by following the same failed strategy as his predecessors when confronted with drug war losses: a stronger fight against drugs.
Though the deaths are the first in which Mexican drug cartels appear to have so brazenly targeted and killed individuals linked to the U.S. government, illicit drug trade violence has killed some 18,000 people in Mexico since President Calderon came to power in December 2006—more than three times the number of American military personnel deaths in the Iraq and Afghanistan wars combined.
The carnage only shot up after Calderon declared an all-out war on drug trafficking upon taking office. After more than three years, the policy has failed to reduce drug trafficking or production, but it is weakening the institutions of Mexican democracy and civil society through corruption and bloodshed, which are the predictable products of prohibition.
The 29 people killed in drug-related violence this weekend in a 24 hour period in the state of Guerrero sets a dubious record for a Mexican state. And an increasing number of Mexicans, including former Mexican Foreign Minister Jorge Castañeda, are calling for a thorough rethinking of anti-drug policy in Mexico and the United States that includes legalization. Legalization would significantly reduce drug cartel revenue and put an end to an enormous black market and the social pathologies that it creates.
Thursday Links
- The populists have it wrong. Why free trade and globalization are great blessings to Americans and poor families around the world.
- How Obama’s plan for health care will affect medical innovation in America: “Imposing price controls on drugs and treatments–or indirectly forcing their prices down by means of a ‘public option’ or expanded public insurance programs–would reduce the incentive for innovators to develop new treatments.”
- Register now for the upcoming Cato forum featuring author Tim Carney and his new book, Obamanomics: How Barack Obama Is Bankrupting You and Enriching His Wall Street Friends, Corporate Lobbyists, and Union Bosses. Buy the book, here.
- Podcast: “Shoes, Undies and Airplane Security” featuring Jim Harper.
ObamaCare Threatens Innovation
That’s the conclusion of economist Glen Whitman and physician Raymond Raad, who write in Forbes:
Unfortunately, the health care bills moving through Congress could curtail medical innovation. Imposing price controls on drugs and treatments–or indirectly forcing their prices down by means of a “public option” or expanded public insurance programs–would reduce the incentive for innovators to develop new treatments.
Proposed reforms could also retard business model innovation–an area where innovation is weak. Congress has already used its control of Medicare to limit the growth of specialty hospitals. A nationally mandated insurance package would severely curtail innovation in payment methods and insurance products, which have the potential to improve the coordination and delivery of health care services.
The health care debate should address more than just covering the uninsured and controlling costs. When the U.S. generates medical innovations, the whole world benefits. That is a virtue of the American system that is not reflected in comparative life expectancy and mortality statistics.
The op-ed is based on the authors’ Cato Institute policy analysis, “Bending the Productivity Curve: Why America Leads the World in Medical Innovation.”
ObamaCare’s ‘Sweetheart Deal’ for PhRMA
The New Republic‘s Jonathan Cohn reports that back in March, IMS Health projected slightly negative revenue growth for the pharmaceutical industry but recently changed that projection to 3.5-percent annual growth from 2008 through 2013.
“What changed?” Cohn asks. “A major factor, according to IMS, was the emerging details of health care reform . . . Put it all together, and you have more demand for name-brand drugs . . . enough to boost revenue significantly.” And:
“If this bill is implemented,” the report concludes on page 138, “an increase in prices on new drugs can be expected.”
How could this be happening? Oh yeah:
That brings us back to the deal that the Pharmaceutical Researchers and Manufacturers of America, which represents those companies, made with the White House and Senate Finance Committee . . .
The industry agreed to embrace health care reform and, later on, launched a massive advertising campaign to promote the cause. In exchange, the White House and Senate Finance–which had been asking various industries to pledge concessions that would help pay for the cost of coverage expansions–promised not to seek more than $80 in reduced payments to drug makers.
To an industry as big and profitable as the drug makers, giving up $80 billion over ten years wouldn’t seem like much of a sacrifice–a point critics started making right away. But if IMS is right, the drug industry wouldn’t even be giving up $80 billion, in any meaningful sense of the term. If anything, it’d be making more money. Maybe quite a lot of it.
Which is what I predicted, both here and here.
Cohn concludes, “the drug industry has enormous leverage in Congress.” But Cohn still supports the president’s health care takeover. Or is it PhRMA’s health care takeover?
CBS News Reports on Prospects for Drug Policy Reform
CBS News has a good report out on recent developments in drug policy, including extensive coverage of the Cato report, Drug Decriminalization in Portugal. Here’s an excerpt:
Portugal’s case is important, Greenwald says, because it provides hard evidence that removes the debate from the realm of speculation.
“If you’re the first state to do it, there’s really no way you can point to evidence of what will or will not happen. … It’s just theory and it’s very abstract,” he said. “The more examples that arise and the more that you can prove that the sky doesn’t fall in,” he said, the more politically feasible drug liberalization will become in the U.S.
So far, Portugal has largely flown under the radar, even in drug policy circles. But Greenwald says that, six months after his paper was released, he’s getting more invitations than ever to present it. In August, New York Times columnist Nick Kristof cited it in a column praising Webb’s reform push.
Read the whole thing. For more Cato scholarship on drug policy, go here.
George Will and Drug Decriminalization
George Will’s latest column takes a look a drug policy and the views of the new drug czar, Gil Kerlikowski. Notably, Will mentions Portugal’s experience with decriminalization of all drugs since 2001 and says Kerlikowski is aware of the Portuguese policy as well. Cato published a report on Portugal’s drug policy in April and the author, Glenn Greenwald, discussed his findings at a Cato policy forum here. George Will’s shifting views on drug policy (toward liberalization) reflect the shifting views of other conservative pundits and the public more generally.
Will appeared on ABC on Sunday, and discussed his views on drug policy. Watch:
‘Reefer Sanity’
Kathleen Parker in the Washington Post:
Arguments for and against decriminalization of some or all drugs are familiar by now. Distilled to the basics, the drug war has empowered criminals while criminalizing otherwise law-abiding citizens and wasted billions that could have been better spent on education and rehabilitation.
By ever-greater numbers, Americans support decriminalizing at least marijuana, which millions admit to having used, including a couple of presidents and a Supreme Court justice. A recent Gallup poll found that 44 percent of Americans favor legalization for any purpose, not just medical, up from 31 percent in 2000.
Read the whole thing. For more Cato work, go here.
Good News on Medical Marijuana
The Department of Justice is changing its long-standing policy of ignoring state laws that allow marijuana use for medicinal purposes. This federalism question played out several years ago in the Supreme Court in the Raich case; Cato’s amicus brief is available here.
Cato hosted Rob Kampia of the Marijuana Policy Project in March, and you can view the event here. Glenn Greenwald wrote an influential study for Cato on the successful decriminalization of drugs in Portugal. Greenwald notes that he gets more invitations to speak on the subject now than he did when it was published.
A good first step. Fourteen states permit medical marijuana dispensaries; I suspect more are on the way now that this hurdle has been cleared.
Why Is Marijuana Still Illegal?
According to Rasmussen Reports, a majority of Americans believe that alcohol is more dangerous than marijuana:
Pot or not, that is the question.
Fifty-one percent (51%) of American adults say alcohol is more dangerous than marijuana, according to a new Rasmussen Reports national telephone survey. Just 19% disagree and say pot is worse.
But 25% say both are equally dangerous. Just two percent (2%) say neither is dangerous.
Younger adults are more likely than their elders to view alcohol as the more dangerous of the two.
Fifty-three percent (53%) of women say alcohol is more dangerous than marijuana, compared to 48% of men. Men by a two-to-one margin over women say pot is riskier, but women are more inclined to say both are dangerous.
Unmarried adults are more critical of alcohol than those who are married. Those with children at home think alcohol is more dangerous than those without kids living with them.
So why are pot users still being tossed into jail?
There are lots of good reasons why people shouldn’t use drugs. But making drug use illegal only compounds the social consequences, turning a moral and health problem into a legal and criminal problem. The result is the worst of both worlds: all of the problems of drug use plus all of the problems of prohibition. Unfortunately, those consequences flow overseas, further undermining fragile societies such as Afghanistan, Colombia, and Mexico and ultimately American security objectives as well.
It’s time to call off the Drug War.
Argentina Decriminalizes Personal Drug Consumption
Following in Mexico’s footsteps last week, the Supreme Court of Argentina has unanimously ruled today on decriminalizing the possession of drugs for personal consumption.
For those who might be concerned with the idea of an “activist judiciary,” the Court’s decision was based on a case brought by a 19 year-old who was arrested in the street for possession of two grams of marijuana. He was convicted and sentenced to a month and a half in prison, but challenged the constitutionality of the drug law based on Article 19 of the Argentine Constitution:
The private actions of men which in no way offend public order or morality, nor injure a third party, are only reserved to God and are exempted from the authority of judges. No inhabitant of the Nation shall be obliged to perform what the law does not demand nor deprived of what it does not prohibit.
Today, the Supreme Court ruled that personal drug consumption is covered by that privacy clause stipulated in Article 19 of the Constitution since it doesn’t affect third parties. Questions still remain, though, on the extent of the ruling. However, the government of President Cristina Fernández has fully endorsed the Court’s decision and has vowed to promptly submit a bill to Congress that would define the details of the decriminalization policies.
According to some reports, Brazil and Ecuador are considering similar steps. They would be wise to follow suit.
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