The Daily Dish
January 16, 2024
Old Policy Issues Anew
Eakinomics spent the long weekend doing a family tour in the Northeast via train, including a final leg in a “roomette” (emphasis on “ette”). The evidence would suggest that purchasers of these units had their perceptions of train travel cemented by “North by Northwest.” The reality is far less elegant.
But in the spirit of looking (and progressing) backward, let’s review some of the key recent policy developments. News reports indicate that Congress intends to replace the oh-so-clever “laddered” continuing resolution (CR) that ends on January 19 or February 2 (depending on which appropriations bill) with an even-more-clever one that will expire on March 1 and March 8. Using the full legislative clock would prevent passage until after January 19 – that is, there is a threat of a shutdown – so some bicameral, bipartisan cooperation will be needed to keep the federal government running on 2023 appropriations fumes. This movie has run many times recently; the only plot twists will hinge on the need for bipartisanship turning into a threat to the House Speaker’s employment. At the same time, non-progress will continue on the Gordian knot that is aid to Ukraine, Israel, Taiwan, and the policy stance on the southern border.
Eakinomics is betting it will publish its analysis of the unbelievably clever laddered CR to May 3 and May 10 on February 26.
In 2001, the Food and Drug Administration (FDA) approved a Gilead treatment for human immunodeficiency virus (HIV) based on the compound tenofovir disoproxil fumarate (TDF). (Say that three times real fast!) In 2015, the FDA approved a successor drug based on tenofovir alafenamide (TAF). Gilead is being sued in California on the grounds that it delayed introducing the TAF drug in order to milk its patent on the TDF drug, keeping prices high and extracting undeserved profits.
As a brief reminder to Californian plaintiffs, Article I, Section 8 of the Constitution – remember the Constitution; people used to pay attention to the Constitution – includes “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” But the fact that the Founders understood the need for innovation incentives does not mean that this understanding has been preserved. Instead, a lawsuit against Gilead was brought under product liability law making the novel claim that by not rolling out the TAF alternative sooner, Gilead was marketing a defective product. Never mind that both drugs were approved as safe by the FDA and the evidence of reduced side effects is contested.
Now a state appellate court has affirmed this theory: “We conclude that the legal duty of a manufacturer to exercise reasonable care can, in appropriate circumstances, extend beyond the duty not to market a defective product.”
This represents yet another assault on intellectual property protections during the Biden years, including failure to protect COVID vaccines on the global market, the Inflation Reduction Act drug provisions, and the executive order on march-in rights. These represent ever-more-sweeping threats to innovators, not just in pharmaceuticals but across the economy.
These old, familiar policy issues are being considered anew, but what is really needed is a new direction for these policies.
Fact of the Day
Due to large-scale subsidies to clean (non-fossil) energy in the Inflation Reduction Act, Florida will not realize the over $20 billion in Medicare savings from the IRA's “inflation tax” and drug price “negotiation.”
