Category: Federal Legislation
Inter Partes Review: non-Article III Adjudication of Private Property Rights
In November 2017, the Supreme Court heard oral arguments for Oil States Energy Services, LLC v. Greene’s Energy Group. Oil States poses a question that forces the Supreme Court to consider whether it will turn patent strategy on its head: whether inter partes reviews (IPRs) violate the Constitution by extinguishing private property rights through a non-Article III forum without a jury. The Federal Circuit is notoriously the appellate circuit most reversed by the Supreme Court – by May 2017, the Court had reversed 25 of the 30 cases it accepted from the Federal Circuit. Will Oil States suffer the same fate?
An IPR, established as one of the cornerstones of the American Invents Acts (AIA) in 2011 and initiated in 2012, is a proceeding instituted by the U.S. Patent and Trademark Office (USPTO), upon petition by an outside party, allowing parties to challenge the validity of an issued patent before the Patent Trial and Appeals Board (PTAB), a non-Article III tribunal. Congress created IPRs primarily to increase the efficiency of an otherwise expensive and time consuming traditional patent validity challenge in court. While traditional patent litigation may consume millions of dollars and years of the parties’ time – a waste of financial and judicial resources and creating uncertainty within the field of technology encompassed by the patent – an IPR typically costs the parties a comparatively small six figure sum and the AIA requires the PTAB to issue a final written decision within one year of IPR institution.
Since 2012, IPRs have become a popular mechanism for parties to challenge the validity of patents – in part due to their efficiency and in part because the PTAB does not begin with a presumption of validity, whereas courts do. In effect, the PTAB has invalidated all claims of the challenged patent in over 1,200 proceedings, roughly 74% of all IPRs. Only 13% of IPRs result in no claims of a patent being invalidated.
The courts have already disposed of numerous challenges to the constitutionality of patent validity review procedures conducted before the USPTO. Before the AIA introduced IPRs, the USPTO had already been invalidating patents since 1981 via ex-parte reexamination. The Federal Circuit has repeatedly affirmed the constitutionality of the USPTO’s authority in such proceedings, stating that “[a] defectively examined and therefore erroneously granted patent must yield to the reasonable Congressional purpose of facilitating the correction of governmental mistakes.” Patlex Corp. v. Mossinghoff, 758 F.2d 594, 604 (Fed. Cir. 1985). The Federal Circuit has more recently denied a similar constitutional challenge to IPRs, stating that patent rights are public rights, reviewable by an administrative agency, and therefore assigning review of patent validity to the USPTO is consistent with Article III. MCM Portfolio LLC v. Hewlett-Packard Co., 812 F.3d 1284, 1291 (Fed. Cir. 2015).
Oil States challenged IPRs alleging a violation of both Article III and the Seventh Amendment. Concerning Article III, Oil States argued that it is unconstitutional for a non-Article III court / Article I tribunal to adjudicate private property. Oil States argued that the Seventh Amendment guarantees patent owners the right to a jury trial because historically, patent infringement cases have been heard in courts of law in England before juries.
Oil States argued that the Supreme Court has once before reviewed and disavowed USPTO patent validity review procedures (otherwise, the Court has only denied certiorari in the past to review Federal Circuit decisions treating the question, including the two above decisions) and the differences in the statutorily created IPR and ex parte reexamination.
In 1898, the Supreme Court held that “the Patent Office has no power to revoke, cancel, or annul” an issued patent. McCormick Harvesting Mach. Co. v. Aultman & Co., 169 U.S. 606 (1898). However, this case did not concern the constitutionality of such proceedings, and it is likely that the Court will limit McCormick to the narrow position that the USPTO does not exercise jurisdiction over an issued patent in the absence of authorization from Congress, as was lacking in 1898. Now that Congress has expressly authorized such review via the AIA, the Court will likely find such review constitutional.
Oil States highlights the differences between AIA-created IPRs and ex parte reexaminations; IPRs are adversarial proceedings including discovery, briefings, hearings, and a final judgment, whereas ex parte reexaminations are more akin to interactive proceedings between the agency and patent owner.
To resolve this case, the Court will likely stay away from disclaiming the statutory distinctions establishing IPRs as trial-like proceedings, because these hold some legitimacy, and focus on whether a patent is a public or private right. If a patent is a public right, then there is no issue with IPRs being trial-like proceedings conducted before non-Article III adjudicators because it is proper for an agency to adjudicate a public regulatory scheme. If, on the other hand, patents are private rights, as Oil States contends, then the Court would be forced to either disavow IPRs or distinguish their characteristics from a trial. The Federal Circuit provided the Court with a mirror distinguishing IPRs from traditional trials, but this distinction is fragile at best. Ultratec, Inc. v. Captioncall, LLC, 2017 WL 3687453, *1 n.2 (Fed. Cir. Aug. 28, 2017). The Court would find more stable grounding classifying patents as quintessential public rights, conferred only by virtue of a statute.
The most curious note regarding the Supreme Court’s decision to hear Oil States is that it concurrently agreed to hear SAS Institute v. Lee, which asks the Court to consider whether the AIA permits the USPTO to select claims from a petition and partially institute an IPR or whether the USPTO must wholly grant or deny a petition, either blessing or damning all claims. If the Court intends to destabilize the AIA and declare IPRs unconstitutional, why consider the USPTO’s duty to the petitioner for an IPR in the same term? It is likely that the Supreme Court will uphold the constitutionality of the AIA’s grant of authority to the USPTO and permit IPRs to continue, but will use these two cases as an opportunity to either limit the scope and effect of IPRs or force clarity regarding the deficiencies of IPRs – such as lacking judicial rules of ethical conduct, improper handling of evidence, improper handling of amendments, or simply disregarding established standards in favor of PTAB-created standards.
Eric Dunbar anticipates graduating Boston University School of Law in May 2018.
Why Big Pharma Lawsuits Probably Won’t Fix Things
By: Lindsey Pasieka
Pharmaceutical companies are sued every single day. There are literally thousands of drug and medical device-related lawsuits going on right now. And they run the gamut, from things like Pradaxa lawsuits, brought on by victims of side effects, to statewide and regional opioid lawsuits, brought on by mayors and state attorneys general. Even government agencies have been known to take Big Pharma to court over violations like dangerous products, and illicit marketing techniques.
So why don’t things change? Why do drug companies continue to hide side effects, market off-label uses and manage to stay out of jail? Well, there’s a few reasons. First, since individual marketers and CEOs are rarely the defendants, the company as a whole has a chance to absorb any penalties- and there are plenty of loopholes to reduce the effects of a guilty verdict. Second, existing laws and regulations favor companies over consumers. And just like with old laws, new laws are hugely influenced by pharmaceutical companies, and more importantly, their money.
They’re Called “Big” for a Reason
FDA approved stamp
One of the biggest pharmaceutical companies in the world is Pfizer. As of 2014, they owned over 500 subsidiaries, and that number is only growing. In 2016, the company has a revenue of $52.8 billion. To put it simply, it is a monster of a company.
That came in handy back in 2005, when the FDA brought an action against the company for its painkiller Bextra. Bextra was approved in 2001 as an alternative to generic options; as a Cox-2 inhibitor, it was supposed to be safer for patients. However, the drug was specifically rejected for approval for post-surgical pain. Despite this, marketers for Bextra deliberately sought out surgeons and marketed the drug for their patients.
Marketing a drug for off-label or unapproved uses is a direct violation of the Food, Drug, and Cosmetic Act (FDCA). So the FDA brought charges against the company. And if Pfizer had taken the hit, the punishment would have meant exclusion from Medicare/Medicaid programs-- and an almost guaranteed financial collapse.
But here’s where being big helps out. Instead of being pinned, Pfizer made a deal so that prosecutors charged their subsidiary, Pharmacia & Upjohn Co., Inc. That company went under, and Pfizer was left only with a fine. Again, being big was beneficial. To a small company, a $1.2 billion bill would be crushing; to Pfizer, it was only 2.5% of their revenue at the time.
The Approval Process Favors Them
Many people think the approval process is too long, too full of red tape and that because of this process that new, desirable drugs can’t get to the patients that need them. When you’re on the outside of the process, it’s easy to understand that point of view. On the inside, though, the pitfalls of our process shine through. Most of those pitfalls are because we try to get things to market faster than every other country, and because money plays a role.
Currently, the FDA must respond to any application for drug approval within 10 months. That’s already outpacing most other countries. But did you know that drug companies can pay the FDA to speed up? The FDA actually has several programs like Priority Review and Fast Track, which companies can pay to get into, which shrinks the approval time to as little as 6 months. This doesn’t include the trials they need to complete before applying for approval, but it does make it difficult for the FDA to make a fully informed decision.
Take, for example, Pradaxa. The drug was submitted to a priority process in 2010, and immediately, the problems with the clinical trials became obvious. The RE-LY trial used a broad population, and excluded the older generations and those with medical conditions that would be most likely to experience side effects. A third-party safety group also discovered that the trial wa
s not, in fact, a double-blind study. This means that the results pulled from the study are less reliable.
Despite these issues, the FDA pushed Pradaxa through. Some would say this backfired. Within 3 months, the FDA received more serious incident reports for Pradaxa than any drug before it. In its first five years on the market, Pradaxa caused over 1,000 deaths. And it’s now the target of an onslaught of lawsuits, led by victims and their families, and it’s received a black box warning for severe bleeding risks.
Yet, on the flip side, Pradaxa is still a leader on the market for blood thinners, and it brings in billions of dollars a year. So if the lawsuit charges don’t make a dent in revenue, the FDA doesn’t take away approval, and individual employees aren’t charged, why should Pradaxa’s maker change their tactics?
They’ve got Money in Washington
If pharmaceutical companies have some money in the FDA, they have whole banks of it in lobbying. In the first quarter of 2017 alone, the pharmaceutical industry spent $78 million in lobbying. Again, this is a drop in the bucket for companies making dozens of billions a year; but to lawmakers it speaks volumes.
Our example here is the ongoing opioid crisis. Most opioid addictions begin in the doctor’s office, with a prescription. When the pill bottles run out, addicts turn to illegal opioids for a high, most often to heroin. It’s a national issue, and it’s even been addressed by President Trump on several occasions, and declared it a Public Health Emergency. Yet law and regulation changes regarding opioids and addiction are slow to come about.
A big reason is because opioids make pharmaceutical companies money. OxyContin is one of the most prescribed opioids on the market. It is used by millions of people a year, and for many, it saves them from severe, debilitating pain. Evidence shows, however, that the 12-hour drug starts to wear off after 9 hours, causing patients to experience withdrawal between doses. As Oxycontin sales quadrupled between 1999 and 2016, opioid overdose deaths rose to over 200,000-- and counting.
Still, drug makers stand behind their products, and they expect lawmakers to as well. When laws to limit prescribing behaviors were introduced in the House and Senate, Big Pharma pushed back. They went so far as to fund the Pain Care Forum, a lobbying company that spent upwards of $740 million to curb the legislation, and they continue to lobby every time a new motion is brought forward to fight the epidemic.
What We Can Do
Lawsuits don’t seem to work, the FDA falls short, and Big Pharma has Washington in its pocket. While the outlook seems bleak and none of it will be easy to fix, there are ways to improve the situation. 2018is an election year; get out and vote with consumer safety in mind. Find representatives who promise to combat these issues. If your current reps aren’t following through, hold them accountable by calling or writing in. Donate to lobbyists who represent the people, not just large companies.
You can also ask your doctor if they work with pharma reps. You can ask them to explain their medication choices to you, and bring up your concerns regarding painkillers or other drugs with serious side effects. Use your voice to protect yourself, your family and your neighbors, and together, we can work towards change.
Lindsey Pasieka is an investigator and writer who focuses on public health and safety issues. Through her work, she has become an avid advocate for consumers, fighting for their right to safe products. In her role as Consumer Rights Investigator for ConsumerSafety.org, she focuses on health and legal topics that are essential to protecting consumers. In her spare time, Lindsey enjoys reading and spending time with her cat, Lava.
Finding Equity in Mental Health Reform
Mental health has been a very serious topic in recent years, and one of growing concern in American society. Mental illness among teenagers continues to rise, and so do the costs of mental health treatment. Health care in general is a major and complicated issue in the United States, as Republicans in Congress found in their attempts to repeal and replace the Patient Protection and Affordable Care Act (“ACA”). In recent decades federal and state legislation have greatly improved access and provided needed consumer protections, but many of the most important protections are in jeopardy. If current Congressional action is any indication, mental health reform may take several steps backward under the new administration.
Mental health reform became a federal issue in 1996 when Congress passed the Mental Health Party Act (“MHP”). It was a weak first attempt at fixing persistent problems in the American health insurance market. Up until the passage of the MHP, insurance providers openly discriminated against mental health claims and treatment. The MHP was the federal government’s attempt to address the disparity between mental health coverage and traditional medical/physical health coverage. However, the original MPH was gutted in Congress before passage, leaving behind a weak law that barely fixed disparities and discrimination in mental health coverage.
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During the congressional debates to get the MHP passed, many were concerned about the economic and practical costs of the initiatives to provide equal protections for mental health and medical care. However, the major success of the MHP was that it demonstrated to lawmakers that providing coverage for mental health treatments was not only beneficial, but that it could be done in a cost effective manner.
After the passage of the 1996 Act, the states responded and attempted to bridge some of the gaping holes left by the MHP. In many cases, states created stricter mental health parity laws than the federal government. This sparked a general acceptance and trend toward improving mental health parity. As opposition to mental health parity was drowned out by support for increased regulation and consumer protections, Congress felt encouraged to try their hand again at providing equal treatment for mental and medical health coverage. The 2008 Mental Health Parity and Addiction Equity Act (“MHPAEA”) was the result of Congress’s second try. The MHPAEA greatly expanded protections for mental health patients and treatment coverage. But alas, there were still major areas in need of reform.
Of particular importance to the current and future state of mental health reform though, came two short years after the passage of the MHPAEA - the ACA. Passed in 2010, the ACA combined with the MHPAEA brought sweeping reform for mental health coverage. Mental health coverage falls under the Essential Health Benefits mandate requiring every insurance provider to provide consumers with mental health coverage. Coupled with the MHPAEA, which requires any insurance provider to treat mental and medical claims equally, mental health coverage is now equal in the eyes of the law to medical coverage.
Since the passage of the ACA though, the practical impact of the reforms have resulted in more covert discrimination of mental health claims that are chipping away at important health care resources that are increasingly vital in American society. Despite laws requiring equal treatment, insurance providers decline mental health claims at higher rates than medical claims. Additionally, insurance providers also make it hard for mental health treatment providers to get paid thereby limiting the physical amount of help available.
The ACA made significant gains in mental health reform, however the lack of practical results has preserved mental health reform as a serious issue of concern. Recently, Congress enacted the 21st Century Cures Act (“Cures Act”), which addresses many pressing concerns that were not covered under the ACA. Most notably, the new act uses modern ideas to address mental illness concerns and substance abuse issues. However, a major concern with the Cures Act is that despite its passage, the House must choose to fund it. Otherwise, all the legislative action prescribed by the new federal law is moot.
Unfortunately, many are speculating that Congress and the Administration will be at odds over the budget putting federal funds for mental health in jeopardy. This is especially so given the fight over funds for various Republican and Presidential pet projects. For example, the President is strongly urging the Republican controlled Congress to allocate funding for his pet project, the border wall between the United States and Mexico. However, House Speaker Paul Ryan and many Republican representatives are more interested in changing funding allocations for health care in an attempt to bounce back after the humiliation of their previous attempt at altering the ACA.
If the recent efforts to "repeal and replace" the ACA was any indication of what the future holds for mental health reform, then America will take a step backward leaving millions without coverage thereby exacerbating an already growing problem. The House passed AHCA attempted to gut the ACA, and would have remove the individual mandate and significantly altered the Essential Health Benefits requirement. Under the AHCA, Ryan tried to remove the requirement that Medicaid and Medicare must follow the Essential Health Benefit mandate, which would effectively prevent millions of the most vulnerable in society from accessing affordable mental health resources.
The fate of mental health coverage and treatment access in many ways is tied to the continued success and longevity of the ACA and funding options for current mental health legislation. To remove the current federal mental health protections, as was proposed in the AHCA, would set progress back and make it nearly impossible for millions to have access to affordable mental health treatments. As the need for mental health treatments and resources grows, we as a nation should not be removing protections and federal funding for progressive initiatives. We should continue to follow the path of the Cures Act and further pursue these initiatives. In order for mental health treatment to be improved subsidies need to be provided for mental health treatment providers (such as psychologists) to incentivize them to open practices and facilities in critical shortage areas. Additionally, federal and state regulations need to address the manner in which insurance providers treat mental health providers.
The current legal framework as a whole is very fair, but needs stricter enforcement on the ground. What use are laws and protections if no one is incentivized to follow them? Of the greatest important, however, is that future laws and regulations intending to improve the state of mental health coverage need to stop attempting to create equality between mental health and medical treatment. Medical and surgical procedures are inherently different than mental health procedures and thus legal equity is needed in order to improve access and provide needed consumer protections.
Jessica Scarborough
With Obamacare in peril, the Governors Speak Out
Before the Affordable Care Act (ACA), I did not have health insurance. My home state Florida did not mandate health insurance coverage for residents and my undergraduate university did not require me to have health insurance. In essence, I was a typical American in my early 20s. I did not think I needed health insurance, was not required to carry it, and could not afford it. Cost was the greatest factor: I did not have any income and Florida did not expand Medicaid. To my surprise, the ACA allowed me to have affordable health insurance for the first time as an adult. Now Congress is contemplating major changes to the ACA (or commonly called Obamacare), causing some governors, such as Charlie Baker (R-Massachusetts), to weigh in on the proposals. Despite the recent successful House repeal and replacement of the ACA, the Senate is now struggling to find a path forward under the budget reconciliation rules.
Just a few months ago, it looked as though changes to the ACA were inevitable given the unified Republican control of Congress and the Administration. Despite seven years of discussion of repeal, and more recently the repeal and replace vote, the future is still uncertain. Members of Congress who attended town hall meetings during the 4th of July break heard from many constituents who are deeply concerned with loss of coverage. Former House Speaker John Boehner recently said that Congress would not repeal and replace, but instead “fix” Obamacare. And now, the Senate is spinning its wheels.
The much-awaited House bill, the American Healthcare Act (the “AHCA”), was the first attempt at replacing the ACA. The AHCA would repeal tax penalties for people without health insurance, reduce federal insurance standards, cut subsidies for buying private insurance and establish new limits on spending for Medicaid. In their first attempt, Republicans failed to get their bill to reach the House floor for a vote. In spite of this defeat, the Trump Administration placed renewed pressure on Congress to revise the ACA. Ultimately, the House was able to pass the bill in its second try by adding $8 billion to help cover insurance costs for people with pre-existing conditions. However, the Senate cannot pass the House bill because Majority Leader McConnell must accommodate Republican senators from states that have expanded Medicaid under the ACA. These senators, with a statewide constituency, must consider what their state governors have to say on revisions to the ACA.
Congress' ACA replacement process included a request to the 50 governors for information. In response, Massachusetts Governor Baker sent a letter on the ACA’s impact on Massachusetts. Some commentators believe Governor Baker’s letter could carry extra weight because of his Republican party affiliation and his past work experience as chief executive of Harvard Pilgrim Health Care gives his suggestions and concerns greater authority.
In his letter, Governor Baker discussed the importance of the health sector to the Massachusetts economy; $19.77 billion, making it one of the leading industries in the state. Governor Baker also noted that the ACA was modeled after the Massachusetts system, which was intended to provide close to universal coverage for residents. Massachusetts has the highest percentage of insured residents in the U.S.— 96.4%. Just under 60% of the insured are covered through the employer-sponsored insurance market.
Governor Baker argued that lawmakers should not repeal the ACA, but revise it. One area in need of repair is the ability of individuals with employer provided insurance to switch to tax-payer subsidized health insurance; something half a million Massachusetts residents have done since 2011. As a result, Medicaid now accounts for close to 40% of the state’s budget. Since 2012, the percentage of Massachusetts residents on commercial insurance decreased by 7% while Medicaid enrollment increased by 7% and now insures 28% of the population. The original Massachusetts program did not allow this transfer, but the State was forced to comply with the introduction of the ACA. Now, this particular aspect of the ACA was straining the Massachusetts system and needed to be revised. Although Governor Baker offered reforms, he argued for maintaining several aspects of the law, such as the mandate requiring all residents to carry health insurance, which would allow stability within high-risk pools for insuring people who are sick.
The Governor continues to push the goal of universal health care coverage, but recognized such a goal was in jeopardy because of certain Congressional proposals. For instance, the letter expressed concern over a shift to block grants for Medicaid funding to the states. The Governor argues that a shift to block grants (or “per capita caps for Medicaid) would “remove flexibility from states” as the result of lower federal funding. Under current law, the federal government and state governments share in the financing and administration of Medicaid. According to the Congressional Budget Office, states typically pay health care providers for services to enrollees, and the federal government reimburses states for a percentage of their expenditures. Furthermore, all federal reimbursement for medical services is “open-ended” in other words, if a state spends more because enrollment increases or costs per enrollee rise, additional the federal government matches. Currently, Massachusetts is a 50/50 state, meaning that the federal government and Massachusetts divide the cost of providing health care for Medicaid recipients.
Despite Governor Baker position, the House passed AHCA creates a per capita-based cap on Medicaid payments for medical assistance. The per-capita caps would establish a limit on the amount of reimbursement the federal government provides to states. For instance, if a state spent more than the federally established limit on reimbursements, the federal government would not match the additional costs. The AHCA would punish Massachusetts low income residents and threaten the stability of the MassHealth system. Consequently, the changes to federal grants of funds could impact the Commonwealth’s goal of universal healthcare.
Today, Governor Baker—joined with nine other governors, including Gov. Sandoval (R-Nevada) and Gov. Kasich (R-Ohio) —sent another letter to the Senate urging it to correct the ACA's weaknesses without repealing the law or gutting Medicaid. The Governors wrote, "lasting reforms can only be achieved in an open, bipartisan fashion." The governors also called on the Senate to heed U.S. Sen. John McCain's, R-Arizona, impassioned plea to return to "regular order" and not continue the recent practice of hyper partisanship.
The governors are speaking; the question remains whether Congress is listening.
Juan Garay graduated from Boston University School of Law in 2017.
The Orphan Drug Act: Unintended Consequences From Salami Slicing
Prescription drug prices are a top cause of increasing U.S. health care costs, with specialty drugs (such as Sovaldi) especially being the culprit for impacting cost trends. Even though specialty drugs constitute less than 1 percent of the total prescriptions, they account for 35 percent of the projected drug cost trend for 2017. This is a 10-percentage point increase from 2015, when specialty drugs accounted for 25 percent of the projected drug cost trends. In particular, patients, insurance companies, and providers have been closely scrutinizing orphan drugs (pharmaceuticals that target rare diseases and disorders) based on their soaring profitability and recent media exposure. According to EvaluatePharma’s 2015 drug report, 2014’s top selling orphan drug in the U.S. had sales of over $3.65 billion, amounting to $54,780 of average revenue per patient. The average orphan drug costs $111,820, which is over four times pricier than the mainstream drug cost of $23,331. This begs the question – how did orphan drugs become one of the fastest-growing products in the pharmaceutical industry?
The 1983 Orphan Drug Act incentivized pharmaceutical companies to invest and manufacture new drugs 
to treat rare or orphan diseases. Historically, pharmaceutical manufacturers did not produce drugs for small patient populations. Over forty years later, the Act has stimulated life-saving treatments for over 25-30 million Americans who suffer from an estimated 7,000 rare diseases, according to the National Institutes of Health.
The FDA established the Office of Orphan Products Development (OOPD) to facilitate the evaluation of developing orphan products through the Orphan Drug Designation program. This program grants special status (orphan designation) to orphan drugs and biologics, which are defined as those aiming to treat diseases/disorders that affect fewer than 200,000 people in the U.S. For a drug to achieve the orphan designation status, both the drug and the rare disease treated must meet certain requirements listed under 21 CFR §316.20 and 316.21. These rare diseases include genetic disorders such as Gaucher disease, cystic fibrosis, certain pediatric cancers, and follicular B-cell non-Hodgkin’s lymphoma.
The OOPD utilizes both “push” and “pull” incentives to promote product development. The “push” includes grants to subsidize clinical research costs, tax breaks on clinical research costs, and waivers of expensive marketing application fees. The “pull” incentives include market exclusivity for a seven-year period that is broader than for non-orphan drugs; during the exclusivity period, the FDA cannot approve a manufacturer’s application for the same orphan drug as a different manufacturer. However, if a competitor manufacturer demonstrates that their clinical uses of the same orphan drug is superior to that of the original version, the new version is not deemed as the “same drug,” in accordance with CFR 316.3(b)(13)(i),(ii). Orphan drug patent and market exclusivity adds up approximately 0.8 years more protection against pharmaceutical competition, compared to normal patent exclusivity protections. As such, the combination of broader exclusivity, small patient populations, and higher expected profits have played out favorably for orphan drug manufacturers because they can charge astronomical prices on their products.
These “push” and “pull” incentives, however, can often lead to manipulation by pharmaceutical companies in an effort to maximize profits and extend their monopolies. According to a recent six-month Kaiser Health News Investigation, a third of orphan drugs approved by the OOPD have been “either for repurposed mass market drugs or drugs that received multiple orphan approvals.” A 2015 commentary from the American Journal of Clinical Oncology reported that these loopholes have resulted in abuses of the patent system, where “[t]he industry has been gaming the system by slicing and dicing indications so that drugs qualify for lucrative orphan status benefits.” This so-called “salami slicing” technique occurs when mass market drugs, not deemed “true orphans,” are being repurposed towards treating small patient populations in an effort to attain additional FDA approval. As such, despite the many successes of the Orphan Drug Act, critics are calling for reforms to close loopholes and address escalating prices.
According to Martin Makary, the study’s author and Professor of Surgery at John Hopkins, funding support that was originally designed for rare disease drugs are now being funneled towards blockbuster drug developments. Off label uses result in drug price inflation that often leads to higher health insurance premiums. Take rituximab, for example, the top-seller orphan drug of 2014, which was originally approved for the treatment of follicular B-cell non-Hodgkin’s lymphoma. Although the disease affects about 14,000 patients per year, the drug was repurposed to additionally treat rheumatoid arthritis, a more prevalent disease that afflicts over 1.3 million patients. As such, the authors of the 2015 commentary proposed pricing negotiations and implementing clauses to reduce the exclusivity period. These could serve as checks on certain drug products that have exceeded past treating 200,000 people, the Orphan Drug Act’s threshold.
Former Rep. Henry Waxman, co-sponsor for the monumental Hatch-Waxman Act and proponent of the Orphan Drugs Act, had suggested amending the Act back in the 1990s, but those and subsequent efforts at reform have failed. According to Rep. Waxman, “Orphan drugs are orphans no more; they’re very popular. [But], there are pharmaceutical companies that handle their whole business plan to make sure their drug can be categorized as an orphan drug.” His statement sums up the ongoing dilemma and atmosphere of the drug market price gouging.
On February 3, 2017, however, Sen. Chuck Grassley, chairman of the Senate Judiciary Committee, wrote that he had opened an inquiry on the potential manipulation of the Orphan Drug Act. Sen. Grassley states that he has already contacted staff members of the Senate Health, Education, Labor and Pensions Committee to determine whether the Act’s incentives are truly benefiting the patients it intends to protect. In March 2017, Senators Orrin Hatch (R-Utah), Chuck Grassley (R-Iowa), and Tom Cotton (R-Ark) sent a letter to the U.S. Government Accountability Office, asking for an investigation into this matter. The Senators raised the possibility that regulatory or legislative changes might be needed "to preserve the intent of this vital law;" giving drug makers incentives to develop drugs for rare diseases.
Amidst federal regulation, several states have been pushing legislation on the monitoring and management of general prescription drug costs. For instance, Vermont recently enacted Act 165, Pharmaceutical Cost Transparency, which requires the state to annually identify up to 15 state purchased prescription drugs on which significant health care dollars have been spent, as well as require drug manufacturers to disclose wholesale acquisition costs. Other states, such as Louisiana, Massachusetts, Minnesota, and New York, have proposed bills with similar disclosure requirements. As such, the current trend towards drug price transparency legislation could provide potential solutions towards curtailing the escalating orphan drug pricings.
With the recent state legislative proposals and a potentially informative Senate inquiry, the spotlight remains on drug manufacturers to explain their salami-slicing, repurposing tactics on orphan designation.
Monica Chou will graduate from Boston University School of Law in 2018 and hopes to practice Health Law.
Continuing Responses to 9/11: The Price of Justice
On September 28th, 2016 Congress voted in favor of the first veto override during Obama’s presidency. The bill at issue was the Justice Against Sponsors of Terrorism Act (JASTA), a very controversial piece of legislation that received massive support in both the House and Senate but was adamantly opposed to by the Administration. Prior to JASTA becoming law, victims of terror attacks and their families could only bring suit against a foreign nation if the U.S. Department of State had designated that nation as a state sponsor of terrorism and the specific attack was aided by the government. Currently, there are only three nations subject to lawsuits as state sponsors of terrorism: Iran, Sudan, and Syria. JASTA severely limits the scope of sovereign immunity and expands the liability of foreign nations for terrorist attacks.
Under JASTA, United States federal courts will now have jurisdiction over civil matters that are brought by United States citizens against foreign nations for claims of injury to person or property that occur inside of the United States as a result of either (1) an intentional act of terrorism or (2) a tortious act by a foreign state, or any official of that foreign state while acting within the scope of his or her office regardless of where the act occurred. The bill also imposes liability on any person who conspires to commit or knowingly aids and abets an act of international terrorism committed by a designated terrorist organization. While JASTA does authorize the Department of Justice to grant a stay if the United States is engaged in good-faith discussions with the foreign nation to resolve the claims, former President Obama was concerned by the serious potential consequences of the bill.
The first of these concerns was that such a bill will reduce the effectiveness of a United States response to an indication that a foreign state has supported acts of terrorism. Litigation brought under this act will effectively remove the matter from the hands of national security and foreign policy professionals and place these consequential foreign affairs decisions in the hands of private litigants. In these matters, the President is meant to be the sole representative of the United States to give a strong unified voice for the nation. If a foreign state acted in a way so as to provide support to terrorist organizations which were harming United States citizens, then a unified response by the United States designating that nation as a state sponsor of terrorism would be warranted and would carry many more consequences than being sued under this new law.
The most obvious effect of JASTA, and the driving force behind the creation of this legislation, is to allow the victims of the September 11th attacks to bring suit against the government of Saudi Arabia, a country that some believe supported the terrorist organization responsible. The reason for this belief stems from the fact that fifteen of the nineteen September 11th hijackers were Saudi citizens, although neither the 9/11 Commission Report or the 2014 FBI Report on the Commission and new findings found any connection to the government of Saudi Arabia. The United States has an ongoing relationship with the Kingdom and the revocation of sovereign immunity will result in strained and potentially hostile relations in the future. Before the bill was passed, the foreign minister of Saudi Arabia, Adel al-Jubeir, warned that if JASTA was passed, the Kingdom would sell off approximately $750 billion held in United States treasury securities and other assets to avoid having it seized by American courts. Such an action could have drastic destabilizing effects in the global financial market but could also be equally as detrimental to Saudi Arabia. For this reason, it is unlikely that they will follow through with this threat since continued cooperation is needed by both nations. Some scholars believe that a more probable act of retaliation will come in the counterterrorism field, opening Americans up to greater physical danger.
The second concern raised by former President Obama was the high likelihood of reciprocal laws being enacted by other nations. The United States is the largest beneficiary of sovereign immunity since it has a greater international presence than any other nation. Revoking the sovereign immunity of other countries will undoubtedly lead to similar actions by foreign nations toward the United States, subjecting the nation to foreign court proceedings. The end of internationally recognized and respected sovereign immunity in these cases will result in suits against the United States which could lead to government assets being seized abroad, a particularly attractive idea for foreign nations given the United States’s financial backing. This concern was somewhat validated when French Parliament member, Pierre Lellouche, said that he would pursue legislation allowing French citizens to bring lawsuits against the United States for cause after the passage of JASTA.
The third concern raised was the potential for complicating the United States’ relationships with one of our closest of allies. Allowing litigation by United States citizens to be brought against our allied nations could enable wide-ranging discovery demands, which could lead to a breakdown in the amount of cooperation the United States receives in the future. A very possible response is the foreign nation limiting their cooperation on national security issues at a time when the United States needs to be building and strengthening alliances more than ever.
Just two days after JASTA became law, the first lawsuit was filed in Washington D.C. Stephanie Ross DeSimone alleged that the Saudi Arabian government provided material support to al Qaida and its leader, Osama bin Laden, resulting in the September 11th terrorist attack that killed her husband. In addition to Ms. DeSimone, the new law will allow approximately 9,000 potential plaintiffs to sue Saudi Arabia for injuries related to the terrorist attacks of September 11th, 2001.
While the House and Senate approved this bill with a large majority, a fact that former President Obama believed resulted from a desire not to vote against a 9/11 bill so soon before an election, several members of Congress have already begun to voice concern about the unintended consequences of the legislation. While no firm plans have been laid down, there has been talk in Congress of the need for further discussion on the matter and potential amendments to the new bill to address some of the newly recognized potential consequences. With the prevalence of terror attacks in today’s society and the speed with which lawsuits are being filed, there is no doubt that if Congress hopes to prevent any of the unintended consequences from being realized they must act quickly.
The unintended consequences of this bill began to arise almost immediately. Anti-Israel activists have already begun using JASTA to sue the Israeli government, claiming that it has committed war crimes, genocide, and ethnic cleansing against Arabs living in the West Bank. The complaint argues that “[b]y promoting, participating in, or funding international terrorism, all defendants have also violated the recently enacted statute known as Justice Against Sponsors of Terrorist Act.” Several individuals recently appointed to President Trump’s administration are singled out by these claims. The complaint alleges that David Friedman, a lawyer chosen by President Trump as U.S. ambassador to Israel, sends $2.2 million to settlers of Bet El every year and has funded Israeli settlements since 1977. Friedman is also president of American Friends of Bet El Institutions, a co-defendant in this action. The Kushner Family Foundation is yet another defendant with close ties to the Trump administration that is claimed to have violated federal law. This claim is merely the beginning of similar actions taken against foreign nations under the broad scope of JASTA.
There have been some reports that Saudi Arabia was using an intermediary named Qorvis to deceive United States veterans and convince them to lobby for an amendment to JASTA that would limit the scope of liability to those nations that “knowingly” support terrorist organizations. These claims have spread through many lesser known news sources but remain unsubstantiated and have gone unmentioned among mainstream media. It does not appear that Saudi Arabia has taken any action in response to the passing of JASTA at this point despite the numerous threats.
The Wall Street Journal reported last March that Saudi Arabia’s energy minister Khalid al-Falih said his government was “not happy” about the law, but believes that after “due consideration by the new Congress and the new administration, that corrective measures will be taken.” Whether the Trump Administration will have more influence over Congress than the Obama Administration on this issue is a significant foreign policy question.
Alexandra Raymond is from Vergennes, Vermont and graduated from New York University in 2014 with a B.A. in Sociology and Law & Society. She is expected to earn her Juris Doctor from Boston University School of Law in 2018. Alexandra will be working for an investment management firm in Boston during the summer of 2017 and will then spend her next semester studying international law at Leiden Law School in the Netherlands. Upon graduation, Alexandra hopes to pursue a career that allows her to explore her interests in business, social justice, and international law.
Will New “Real World Evidence” Standard Hurt Drug Safety?
On December 13, 2016, President Barack Obama signed the 21st Century Cures Act into law. The Act passed the House and the Senate with considerable bipartisan support, a rarity in today’s political climate. The Act is a sprawling piece of legislation, covering many health care policy areas and appropriating billions of dollars for various causes, research, and organizations. The main focus of the legislation aims to fund three key initiatives: former Vice President Joe Biden’s “cancer moonshot,” the BRAIN Initiative (a project designed to learn how the brain works on a more complete level); and the Precision Medicine Initiative (a venture to increase the availability of genetic data and streamline its use). The 21st Century Cures Act devotes nearly $4.8 billion to these projects alone. Other appropriations include funding to help states combat the ongoing opioid epidemic and reinforcements for the Food and Drug Administration (“FDA”). The Act passed largely due to an incredible lobbying effort. More than 1,455 lobbyists representing over 400 organizations advocated for or against the law. The Pharmaceutical Researchers and Manufacturers of America (“PhRMA”), the pharmaceutical industry trade federation, spent more than $24 million on lobbying related to the legislation. The 21st Century Cures Act is a piece of omnibus legislation that has far-reaching implications in the health care field. Despite the Act’s noteworthy bipartisan support, there are a number of vocal opponents to the legislation. Most of the concerns stemming from the legislation focus on the provisions related to the Food and Drug Administration's approval of new drugs.
One notable provision (§3022, p.165) of the 21st Century Cures Act that has been the subject of some controversy involves the use of Real World Evidence (“RWE”). The Act defines RWE vaguely (§3022(b), p. 165), only providing the following: “data regarding the usage, or the potential benefits or risks, of a drug derived from sources other than randomized clinical trials.” The Act requires the Secretary of the Department of Health and Human Services to develop a program for evaluating the use of real world evidence (“RWE”). Per the Act (§3022(a)(1-2), p. 165), RWE will now be used to support new indications for drugs already on the market and to fulfill post-marketing study requirements. While many are optimistic that this provision will assist the FDA in improving the efficiency of the drug approval process, others are concerned about the impact RWE will have on the safety and efficacy of newly approved medications.
Over the past decade, the FDA has trended towards embracing post-market data. This trend is reflected by
the substantial increase in use of expedited approval pathways. The FDA employs four expedited approval pathways: Fast Track, Breakthrough Therapy, Accelerated Approval, and Priority Review. A pharmaceutical company must apply for each designation separately, but a single drug may qualify for multiple pathways. The pathways vary but all promote the same goal: “treating serious conditions” or “fill[ing] an unmet medical need.” Through expedited approval pathways, FDA effectively pushes drugs to market by shortening application review periods, allowing surrogate endpoint clinical trials, and increasing post-market data reliance. These “shortcuts” increase the number of available drugs with incomplete safety and efficacy profiles by reducing the amount of clinical trial-generated data needed for approval. Expedited pathways favor therapy availability over absolute safety. In 2015, the Government Accountability Office found (p. 21) that from 2006 to 2014, 49% of approved new molecular entities utilized at least 1 expedited pathway. The Report also concluded (p. 18) that FDA reviewed a drug using at least 1 expedited approval pathway in approximately 8.6 months, compared to approximately 12.1 months for drugs without a pathway. As such, expedited approval pathways, supposed to represent an exception for drugs, have practically become the norm.
Coinciding with this rise has been a rise in reported adverse drug reactions (“ADRs” or “adverse events”) from prescription drugs. The fact that the rise in reliance on these pathways mirrors the rise in ADR reports suggests a correlation. Mary K. Olson, a professor of economics at Tulane University, examined data on drug approvals from 1990-2001 to determine if there is a direct relationship between expedited approval pathways and adverse events. Olson determined (p.197) that a 2-month reduction in review time results in a 21-23% increase in serious adverse events and a 19-21% increase in adverse event-related deaths and concluded “there is a trade-off between review speed and drug safety.”
Despite the statistics showing a trend toward faster drug approval coinciding with a rise in pharmaceutical-related injuries, speeding up the FDA drug review process remains a focal point in the political landscape. Patient pressure constitutes the strongest driver of shorter review times. Patient advocacy groups publicly campaign for wider access to experimental drugs. These groups reason that patients will accept the risk of side effects in exchange for the hope provided by a new therapy. Public support also directly affects review times. A study (p. 59) determined that media coverage and the wealth of patient advocacy groups have a direct relationship with review times. According to the study, in a vacuum, a one standard deviation increase in Washington Post articles on a disease or patient advocacy groups reduces review by 4 to 8 months. Advocacy group wealth has a similar effect: “marginal differences” in resources translates to a 3.5 to 7 month reduction in review time. Accordingly, the 21st Century Cures Act constitutes a decisive victory for patient advocacy groups. The legislation intends to streamline the drug approval process, most notably with the introduction of Real World Evidence.
There are a number of clear issues with the use of Real World Evidence. Under the Act, RWE can come in the form of summary data, departing from the fully recorded and itemized clinical trial data currently used for drug approvals. The FDA admits that RWE may be useful for drug approval, but most sources of such data are not designed to meet regulatory requirements. Legislators and the FDA intend for RWE to encompass data such as FitBit readings, which produce data that do not meet the standards governing clinical trials. As such, despite the potential for beneficial use of RWE, the idea is fraught with complications.
Understandably, critics fear the incorporation and use of RWE poses a threat to the integrity of the drug approval process. This provision of the 21st Century Cures Act has the potential to lead to public policy built on misinformation. However, the use of real world evidence could greatly speed the drug approval process and deliver much-needed new medicines to sick and dying Americans. It remains to be seen what the long-term impact of this legislation will be, but it is an area worth monitoring.
Nicholaas Honig is from Collegeville, Pennsylvania and graduated cum laude from Hobart and William Smith Colleges, where he majored in Political Science. Nicholaas is expected to graduate with a concentration in health law from the Boston University School of Law in spring 2018. Post-graduation, Nicholaas hopes to work in the field of pharmaceutical regulatory law.
Raising the Minimum Wage: Look No Further Than Your Own Backyard
By: Brynn E. Felix
The United States has a minimum wage problem. In 2015, roughly 2.6 million workers earned at or below the federal minimum wage—a measly $7.25 per hour. The federal minimum has not budged since 2009 and continues to depreciate in value: by 2015 the $7.25 hourly wage had already lost approximately 8.1% of its purchasing power to inflation. With a looming Trump administration likely falling in lock-step with a Republican-controlled House and Senate, it seems safe to predict that the federal minimum isn’t going anywhere for the next four years.
Efforts by Democrats to raise the federal minimum wage to $10.10 largely stalled out, even after a letter signed by 600 economists supported the hike. Citing “close to 17 million workers” who would benefit from the raise, the economists pointed to
“important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.”
Pros & Cons of Increasing the Minimum Wage
In addition to the economic arguments provided by the 600 economists who favor raising the minimum wage, proponents also point to the fact that the current minimum wage fails to provide a living wage for workers living in urban centers and places with higher costs of living. Indeed, the value of the minimum wage has significantly declined since the 1960s and 1970s. Moreover, low wage earners are more likely to spend the majority of their income locally, which benefits the local economy. In addition to the economic arguments, proponents have effectively framed the narrative as pursuit of economic justice. Too many working families are struggling to make ends meet, juggling multiple jobs with no relief in sight.
Critics claim that forcing businesses to raise the minimum wage will inevitably cause them to reduce their employment ranks, rendering “many less skilled workers unemployable.” A wage hike would mean fewer jobs and an increase in unemployment. In response to Senator Bernie Sanders’ proposal to raise the federal minimum wage to $15, the Heritage Foundation claimed that approximately seven million full time jobs would be eliminated by 2021. Moreover, doubling the federal minimum wage would have a greater impact on states with lower costs of living. In a nutshell, opponents decry minimum wage increases as “’feel good, sound good’ policies that appease the masses, harm businesses, and displace workers.”
Fight for 15
The Republican-controlled 114th Congress needed no further convincing.
Seeing their prospects fade at the federal level, minimum wage advocates have reacted by strategically shifting their efforts to local reforms. Municipalities in particular have become the forefront of the movement for a living wage.
Seattle was the first major metropolitan city to enact a minimum wage hike amid the failed effort to increase the federal minimum wage. In early 2014, Seattle saw months of contentious debates and public demonstrations, bringing thousands of strikers and economic justice activists to the streets. The “Fight for 15” campaign had officially begun.
“It was the experience of a lifetime,” said former McDonald’s worker Martina Phelps. “After seeing my co-workers literally struggling and not having enough money to take care of their children, it was set in my mind that I can do something about this.”
Labor triumphed. By June of 2014, the Seattle City Council unanimously approved a city ordinance that raised the $9.50 an hour wage to $15 an hour. “No city or state has gone this far,” one councilmember noted, “We go into uncharted territory.” The ordinance contains different phase-in schedules that vary by business size: employers with 500 or more employees will pay $15/hour by 2017, while smaller businesses have until 2021 to gradually implement the raise. The first increases took place in April of 2015, while large employers currently pay $13/hour.
Building on Seattle’s success, the Fight for 15 spread like wildfire to other urban centers and state legislatures.
By December 2015 Chicago mayor Rahm Emanuel signed into law an ordinance to raise the city’s minimum wage to $13/hour by 2019. Three months later California legislators enacted a law that will elevate the state minimum wage to $15/hr by 2022. New York legislators followed suit with their own $15/hr measure, which will take effect in New York City by 2018.
In the meantime, the University of Washington’s Evans School of Public Policy and Governance published a study in July 2016, noting that Seattle’s wage increase had elevated the pay of minimum wage workers by nearly 12%, in contrast to a 5% increase seen by workers just outside the city limits. While the preliminary study concluded that low-wage workers’ employment levels and wages rose, the media continued to promote polemic interpretations of the study’s results. Supporters and opponents alike, eager to vindicate their own predictions, used the report to claim victory over their opponents. These two headlines are from the Seattle Times (July 25, 2016) and Forbes (July 26, 2016), respectively:
What actually happened? In reality, by July 2015, data demonstrated that the wage hike had a minor impact on employment and numbers of hours worked, along with significant increases in wages earned. Signs of misleading reporting were documented by the New Yorker: “Last February [2016], the Washington Policy Center and the American Enterprise Institute suggested that several Seattle restaurants were closing in anticipation of having to pay their staff more, though when a Seattle Times report went out to interview the owners she found more mundane causes: a bad location, a rebranding.“
Despite several media outlets prophesizing negative economic consequences of raising the minimum wage, voters in Arizona, Colorado, Maine, and Washington overwhelmingly approved November ballot measures to increase their respective state minimums. In total, 29 states now offer a higher minimum wage than the federal minimum.
Where do we go from here? Oregon may give us a clue.
With a few exceptions, the “Fight for 15” victories largely occurred on Democratic turf. In its article, The Bitter Lesson From Seattle’s Minimum Wage Hike, Investor’s Business Daily lamented:
“[S]uch foolishness seems to have infected the Democratic Party, with its now near-ubiquitous ‘Fight for $15’ campaign…forcing sharply higher wages on troubled local economies where the median wage is low and can have a devastating effect.”
Fears that increasing the minimum wage could harm states with lower costs of living are not unfounded; however, that alone should not be the reason for jurisdictions to reject minimum wage increases. Indeed, Oregon offers an innovative model that addresses concerns about significant economic disparities head on. In March of 2016 the Oregon State Legislature enacted a statewide law that raises the minimum wage, set at $9.25 at the time of passage, to $12.50, $13.50, or $14.75 by 2023—depending on the region. To accommodate both the high cost of living in Portland and the economic differential in nonurban counties, the legislature devised a system that divides the state into three regions: Standard, Portland Metro, and Nonurban Counties. By 2023, the Standard minimum wage will reach $13.50 and will be adjusted annually to compensate for any increases to the Consumer Price Index for All Urban Consumers. The Portland Metro area will hover at $1.25 above the Standard wage, while the minimum wage in Nonurban Counties will be fixed at $1 below the Standard minimum:
This multi-layered approach addresses many of the issues that may arise when different regional economies are subjected to uniform across-the-board wage hikes. By centrally managing wages by locality, Oregon was able to legislate for each sub-region’s unique economic situation. While such a plan might prove to be unconstitutional at the federal level due to the requirement that states be treated equally under the law, this approach may nevertheless provide a blueprint for other states that struggle with satisfying the needs of wildly different demographics.
The Takeaway
One of the greatest silver linings to emerge from the gridlock, obstructionism, and ever-intensifying polarization of Congress is the reminder that inaction at the federal level does not have to stall progress at the local level. Municipalities and local governments have proven to be successful incubators of policies that help the working poor. In Washington, a bold proposal in 2014 to raise the city’s minimum wage to $15 an hour catalyzed momentum for a statewide vote in 2016 to raise the state’s minimum wage to $13 an hour. Similarly, state legislatures like Oregon are adopting wage increases with creative and innovative implementation schemes. Only time will tell what effects these experiments will have—and how the media will attempts to shape the underlying narrative—but in the meantime, local advocates and policymakers should take full advantage of these beautiful laboratories.
Brynn E. Felix
Planned Parenthood’s Terrible, Horrible, No-Good, Very Bad Year
The past 12 months was not the best of years for Planned Parenthood. In July 2015, a video surfaced of a Planned Parenthood employee discussing prices on harvested tissues from fetuses aborted by clinic patients. Planned Parenthood and other health care providers regularly act as a middleman - obtaining fetus tissue from consenting women and ensuring it safely reaches the proper research facilities. For this, the providers are usually reimbursed by research facilities for the costs of the process, but are not legally allowed to profit from the service.
Instantly the video caused an uproar within the GOP and prompted many political figures to point fingers at the organization for what it saw as illegal, greedy and immoral practices. Prominent Republican legislators, such as Ted Cruz, demanded that the organization be immediately stripped of over 500 million dollars in annual federal funding. During the Republican nomination process, Presidential hopefuls like Carly Fiorini used precious debate time to make wild accusations about the contents of the video and wilder claims that the “vast majority of Americans” support defunding Planned Parenthood.
Despite this misinformation, Planned Parenthood faced even more trouble when Congress took up the issue of the federal budget in September. The early fall saw Congress in a heated showdown, with Republicans fighting tooth and nail to attach an amendment to the budget that would defund Planned Parenthood as punishment for its “illegal” actions. On September 18, 2015, House Republicans were able to win the vote to defund the health care provider for one year. As the October 1st deadline to pass a federal budget approached, it was important that arguments over this bill not cause a repeat of the government shutdown of 2013. Fortunately, Senate Democrats worked hard to filibuster the amendment and the legislation failed to pass.
This small relief was short-lived however, as the organization faced a violent shooting at a Colorado branch in late November. The shooting has even caused some to speculate that the recent media scrutiny and criticism of the organization may have played a role in the attacker’s motivation to commit the act in the first place. Many of the conservative politicians lambasting Planned Parenthood seem to be attempting to ride the anti-abortion movement, claiming the organization provides solely abortion services in this country. To the contrary, the abortion services provided by Planned Parenthood accounted for only 3% of its services in 2013. And federal funding for abortion is restricted to cases of rape, incest or endangerment to the life of the mother by the Hyde Amendment.
Despite this, Senate Republicans passed the bill recently defunding Planned Parenthood and repealing parts of the Affordable Care Act. To do this, they relied on the Congressional reconciliation process, which only requires 51 votes to pass legislation. The bill passed 52-48.These votes are largely symbolic “political posturing” though, as President Obama has promised to veto any bill that touches the ACA or Planned Parenthood in any negative way.
Although the organization has faced a tough year, it has mobilized many supporters’ nationally, whether in person or through Facebook profile picture filters. The presidential election is bringing the debate into stark relief, with obvious pro-life and pro-choice platforms on either side. Trump has said that he plans to defund Planned Parenthood if they continue to perform abortions, although he actually supports the other services the organization provides. His choice in Mike Pence as a running mate speaks volumes as well. Pence has been working diligently since 2007 to defund Planned Parenthood, with some minor success. As the governor of Indiana, he has severely cut state funding to the organization. On the other hand, the 2016 Democratic National Convention hosted Planned Parenthood’s president Cecile Richards. Richards was clear in her speech when stating, "Make no mistake: women's health and rights are on the line and on the ballot in this election.”
Hopefully the next 12 months will bring better tidings for an organization that aims (and is known) to provide affordable and essential health care services to thousands upon thousands of men, women, and children in low-income families in America – people who otherwise would not be able to receive proper health care at all. The presidential elections could be a death toll or a saving grace for an organization on the precipice. Come November, the future of Planned Parenthood will be more certain. Until then, the organization holds its breath.
Sonam Bhagat is from Lowell, Massachusetts and graduated from Boston College in 2011, concentrating in Finance and Accounting. Sonam is expected to matriculate from Boston University School of Law in 2017. Sonam will be working for a large corporate law firm in the summer of 2016 and hopes to explore various areas of law, in order to better decide her course after graduation.
Loopholes in the System: How Student Loan Litigation May Change Going Forward
In June 2014, the Department of Education greatly reduced its funding from the for-profit institution Corinthian Colleges, which had received $1.4 billion in funding annually from the federal government. But serious concerns that Corinthian had mishandled the funds, redirecting them to creditors and other avenues rather than to students, led to multiple federal and state investigations. Finally, the DOE took action – it stopped giving the institution federal loans. In April 2015, cut off from these loans, Corinthian shut down the last of its campuses’ doors. Now, many Corinthian students are looking for help with the student loans they have been saddled with, and with nothing to show for it. The DOE, in June 2015, released on its website the two ways in which it plans to help students with loans related to their education at Corinthian. For students who were attending the closed down campuses, there is the option of loan forgiveness. The DOE is expanding the class of students eligible for loan forgiveness to include those who attended the school as far back as June 2014.
More strikingly, the DOE is making an unprecedented move in extending a loan forgiveness option for 
students under the “defense to repayment”. Defense to repayment claims are usually brought under state UDAP laws – Unfair and Deceptive Acts and Practices laws. These state level claims provide easier relief as they do not require proof of intent and reliance may be presume. However, this rule has yet to be enforced on a federal level – whether in the Corinthian case or any other direct loan dispute. In the past 15 years, the Department received a grand total of five claims under the ‘defense to repayment’ provision of the law. This is partly because, when the rule was promulgated there was no guidance on the procedures for filing, disputing and resolving a claim under defense to repayment. In December 2014, 12 U.S. senators, led by Elizabeth Warren submitted a letter to the Department of Education asking for clarification on defense to repayment. In response, the DOE is attempting to make the process easier for thousands of Corinthian borrowers by putting in place an application procedure.
In another unprecedented move, the Consumer Financial Protection Bureau worked with a buyer of partial Corinthian campuses and the DOE to secure a settlement valued at $480 million in debt relief for private student loan borrowers who attended Corinthian at the time of closing. Students who have private loans are also reassured that strong arm tactics – such as harassing calls and lawsuits – will not be used against them to collect on loans. These students will also have negative credit history erased from their credit reports. A broader lawsuit is currently still pending against Corinthian alleging predatory techniques were used to induce students to take out private loans.
There may be sufficient reason to invoke the “defense against repayment” option in the case of Corinthian colleges. But this may open the floodgates to other claims, especially in the for-profit education industry, that could fall under the defense. As the issue of burgeoning student loans in the millennial generation becomes a larger issue for the economy, this tiny loophole could create huge impacts in the coming years. More and more disgruntled students taking action may mean this “defense to repayment” could be extended to private, non-federal loans and public universities.
Recently, Obama’s administration has considering new rules and regulations allowing for easier debt relief. Several advocate groups have written to the DOE to make suggestions and provide guidance and encouragement in creating a clearer debt relief process. But the recent downfall of multiple for-profit educational institutions like Corinthian seems more a symptom of a toxic and unsustainable system stemming from overreliance on student loans; a system that forces the students to carry the burden for access to education. Relying on a short-term, half-formed relief strategy such as a “defense to repayment,” may just be akin putting a Band-Aid on a fatal wound.
Sonam Bhagat is from Lowell, Massachusetts and graduated from Boston College in 2011, concentrating in Finance and Accounting. Sonam is expected to matriculate from Boston University School of Law in 2017. Sonam will be working for a large corporate law firm in the summer of 2016 and hopes to explore various areas of law, in order to better decide her course after graduation.
