Category: Lobbying
Massachusetts Broker’s Fees: Reasonable Service or Market Manipulation?
In 2023 Massachusetts established the Executive Office of Housing and Livable Communities with an eye toward creating more housing in the state, which, like many across the country, is suffering a housing shortage. Some estimates suggest that Massachusetts will require between 125,000-200,000 additional housing units by the end of the decade. Various proposals are currently being considered as how to best spur the creation of new homes. The eventual solution will not be a single provision but likely many policy amalgams from various sectors. One proposal currently before the Joint Committee on Housing is Senator James B. Eldridge’s bill, An Act Enabling Local Options for Tenant Protections (Bill S. 872). One of the more quietly influential provisions in the bill, Section 8(g),[i] should be amended to be mandatory across the state, rather than allowing municipalities to opt into the provision and the language regarding should be changed to prohibit the business from charging tenants a fee. Any of the various similar bills that the committee is considering should adopt Section 8’s amended language.
Section 8(g) could alone reduce the cost of relocating to a new apartment by almost 20%, greatly increasing the mobility of Massachusetts tenants, and concomitantly, increasing the competitive demand for more, new housing units. The bill allows municipalities, to prohibit tenant-paid broker fees. Currently, tenants relocating in the Commonwealth may be required to provide first month’s rent, last month’s rent, a security deposit, and a broker’s fee at signing. Security deposits and broker’s fees are traditionally tied to the price of the housing unit and often are equivalent to one month’s rent. The median rental price for a one-bedroom apartment in Boston (certainly the state’s most expensive large housing market) is above $2,900, meaning that a renter must find $11,600 to move—likely before they’ve received their previous security deposit back.
The remainder of the bill provides for municipalities to adopt, should they so choose, rent stabilization regulations, standards for just cause eviction protection, condominium conversion ordinances, prohibitions on immediate rent increases in response to the bill, anti-gentrification displacement protections, and regulations of fees. Each provision has its merits and deserves its own full analysis not available in this article.
While the bill before the Housing Committee allows for different municipalities to adopt different policies, the state’s goal of new housing would be better served by prohibiting the practice of broker’s fees. In the modern housing market, tenants are often looking for units through online platforms and only being connected with brokers after inquiring into specific properties. However, nothing prevents multiple brokers from presenting the same listing because landlords can provide their listing to multiple brokers. Under such a model prospective tenants must pay the vendors that their landlord contracted with, making renters captive consumers, which distorts natural market forces and contradicts the needs of the broader housing market and tenants’ interests.
Other cities and states have recently tried to put forward similar provisions to varying results. Often such proposals face significant pushback from broker-related interest groups. The housing market inefficiency is a case study in the challenge of making reforms in circumstances of concentrated interests and diffuse costs. While renters may feel aggrieved about their new apartment costs, they likely only face the additional expense no more frequently than once per year. Meanwhile, brokers reap substantial benefit from a captive market and thus have every incentive to ensure no progress or changes are made to their outdated role in a modern market. The housing shortage allows landlords to deflect the cost onto tenants because tenants have so little choice in the current shortage; thus, no competitive price pressure, by either landlords or tenants, are exerted on brokers to provide competitive fees or better services.
Broker groups have suggested that prohibitions on tenant-paid fees will increase rents by requiring landlords to cover the costs. They are likely correct; though it is likely of little consequence. Assuming that the one-month’s-rent broker fee is a competitively derived price for services rendered and assuming that brokers are actually required in modern apartment leasing (two generous assumptions): if a landlord is instead required to pay the $2,900 broker fee for a broker finding a tenant for a median one-bedroom Boston apartment, we could expect that they would raise the rent of the apartment by as much as $247.44 (spreading the $2,900 expense with 5% annualized interest over 12 monthly payments), an 8.5% increase. While an 8.5% increase in rent sounds substantial, (all assumptions holding constant) the tenant’s housing costs over the same first twelve months has increased only 0.002% while the cost of relocating has decreased by 18.6%. The substantial reduction in cost to relocate to a new apartment (which, albeit, doesn’t include moving expenses, i.e. boxes, truck rental, moving company, favors and pizzas for friends) increases tenants’ ability to more successfully exert their demand force as consumers, which requires the market to respond proportionately, through a reduction in rental costs or an increase in the quality or quantity of housing.
The flaw in such an analysis is the omission of any future years’ rents based off the initial absorption of the broker fee. That is to say, even assuming the rent does not get raised after one year, the tenants will be paying that additional $247.44 each month of every year after the first. So over two years the housing costs would increase by 4.2%. It is worth noting however, that the two listed assumptions are not the legal reality in a number of competing states. Accordingly, any such reactionary rise in rent prices is not a given, and certainly not an increase of 8.5% as discussed above. Additionally, such a calculus does not consider the prohibition on immediate rent increases elsewhere in Senator Eldridge’s bill. Nor does it account for other provisions not yet proposed. For instance, California does not allow landlords to request or accept last month’s rent, and the justification for continuing to require Massachusetts residents to makes increasingly little sense in the present shortage.
The current fee-shifting model onto tenants provides perverse and inefficient market incentives for the actors in the field. With inadequate housing stocks, landlords are able to defer screening and application costs onto brokers and are not incentivized to make applying more efficient for tenants. Nor is there substantial incentive to add to or improve the available housing stock. Brokers, because there are is no expectation of exclusivity, have no increasing marginal interest in providing additional efforts to find tenants as another broker may fill a vacancy before they can, especially as most tenants locate apartments through non-broker-affiliated online platforms in the modern market. Nor are brokers incentivized to provide competitive fees as the industry has agreed upon the equivalent of one month’s rent, the price-fixing characteristic central to the economic definition of a cartel.
Meanwhile, throughout the process, tenants have limited selection and face rental prices inflated by the squeeze of the housing shortage. Even tenants who don’t move are harried by the practice as sizable year over year rent increases are unavoidable because of the exclusionary capital required to move elsewhere. Currently, to avoid a rent increase and move requires having on-hand the equivalent of four month’s rent. Which is a cruel absurdity given that 44.5% of households in the Greater Boston area in 2022 were cost burdened according to the Boston Foundation’s Greater Boston Housing Report Card, that is spending more than 30% of their income on rent. The same report showed that nearly half of those cost burdened, 22.7% of households in the Greater Boston area, are severely cost burdened, spending more than 50% of their income on rent. To bind families in a Catch-22 that they cannot seek less expensive housing unless they save the equivalent of four months rent while they are currently paying more than half of their income towards their current rent leaves countless Massachusetts residents teetering at the edge of housing insecurity.
Any adjustment to the current fee scheme, let alone a blanket prohibition on the practice, will activate lobbying efforts from the Massachusetts Association of Realtors, whose End of Session Legal Update in 2022 noted that they “successfully blocked rent control, eviction moratoria, [and] broker fee shifting….” Accordingly, any successful legislation will need to mobilize tenant organizations and various community grassroots organizations to advocate on behalf of lowering relocation prices and diffusing the benefit.
Massachusetts’ housing shortage will require the efforts of policy makers, stakeholders, and community members. The one thing that we can be confident won’t solve the state’s housing shortcomings is not altering the forces that created the problem. The current fee scheme operates as a state-sanctioned cartel that makes relocating markedly more difficult and thus suppresses proper demand and supply influences, further distorting the housing market in the Commonwealth. While it is not a panacea, tenant-paid broker fees should be consigned to the curb with the rest of waste.
[i] “(g) In addition to the powers granted to a city or town in this section and notwithstanding section 87DDD½ of chapter 112, a city or town may by local charter provision, ordinance or by law regulate, limit or prohibit the business of finding dwelling accommodations for a fee.”
Michael St. Germain anticipates graduating from Boston University School of Law in May 2025.
Is the Johnson Amendment Constitutional?
My previous Dome blog entry discussed the Johnson Amendment and the fight that has surrounded the amendment since its creation in the 1950s. The Johnson Amendment was added to Section 501(c)(3) of the U.S. tax code by then-Senator Lyndon B. Johnson to limit the political activity of 501(c)(3) organizations. The Amendment prohibits 501(c)(3) organizations from endorsing or opposing political candidates. Many organizations have been trying to repeal the Johnson Amendment for years, and many argue (including members of Congress) that it violates the First Amendment of the U.S. Constitution.
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Two vocal opponents of the Johnson Amendment (and the sponsors of the Free Speech Fairness Act in both houses of Congress) Senator James Lankford and Congressman Steve Scalise argue that the Amendment must be repealed to protect the First Amendment rights of 501(c)(3) non-profit employees. They argue the Bill of Rights protects the right of all Americans to freely express their ideas and opinions without persecution from the government, and the Johnson Amendment violates this right by stripping 501(c)(3) employees from being able to speak their minds about political issues. As discussed in my previous post, the Johnson Amendment prohibits 501(c)(3) employees from endorsing or opposing candidates, and violations of the Amendment risks punishment by the IRS either by fine, revocation of the organization’s tax-exempt status, or both. This, therefore, begs the question of whether the Johnson Amendment does in fact violate the First Amendment. This Dome blog post will look at legal precedent to see if the Amendment has been challenged for its constitutionality in the past, and if so, the arguments the court made in their decision.
Before going into court cases about whether or not the Johnson Amendment actually violates the First Amendment, it is important to look at the text itself. The text of the First Amendment reads:
“Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.”
Members of Congress and other organizations who oppose the Johnson Amendment mainly argue that it violates the freedom of speech, which is in fact why the current bill before Congress attempting to repeal the Amendment is titled the “Free Speech Fairness Act.” Within the text of the First Amendment, they argue that the Johnson Amendment is “abridging the freedom of speech” of 501(c)(3) tax-exempt nonprofit employees, but in particular religious ones, such as pastors, priests, and rabbis.
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But has the constitutionality of the Johnson Amendment actually been determined by the Supreme Court as it applies to religious organizations? The answer, unfortunately, is no. However, two U.S. Court of Appeals circuits have upheld the Amendment as constitutional in the past when applied to religious organizations. The first case, Christian Echoes Nat'l Ministry v. United States (1972), involved a nonprofit religious corporation contesting the revocation of its 501(c)(3) tax-exempt status by the IRS as punishment for violating the Johnson Amendment. Through various appeals and remands, the ultimate holding by the Tenth Circuit Court of Appeals was that the organization no longer qualified as a tax exempt organization under section 501(c)(3) of the tax code. As one argument against the revocation of their status, Christian Echoes argued the Johnson Amendment was unconstitutional and violated their right to free speech. However, the court held that “in light of the fact that tax exemption is a privilege, a matter of grace rather than right... the limitations contained in Section 501(c) (3) withholding exemption from nonprofit corporations do not deprive Christian Echoes of its constitutionally guaranteed right of free speech.” Christian Echoes Nat'l Ministry v. United States, 470 F.2d 849, 857 (10th Cir. 1972). The court therefore determined the taxpayer must refrain from these political activities to obtain “the privilege of exemption,” which Christian Echoes benefited from until their status was revoked.
The argument made by the court in Christian Echoes is very similar to the argument made by proponents of the Johnson Amendment, such as the Freedom From Religion Foundation, who argue because religious organizations benefit essentially from a government subsidy, in exchange for that subsidy they relinquish some of their rights. These rights can at any time be reclaimed, but at the cost of losing the subsidy, ultimately leaving the choice between the two up to individual organizations.
The District of Columbia Circuit Court of Appeals has also taken up this issue more recently in Branch Ministries v. Rossotti (2000), regarding the constitutionality of the Johnson Amendment, but for violation of a different part of the First Amendment. In this case, a church had its tax-exempt status revoked for intervening in political campaigns, violating the Johnson Amendment. The church argued that revoking their tax-exempt status was a violation of the Free Exercise clause of the First Amendment, as in violating their right to freely exercise religion. To show the Free Exercise clause had been violated, the church had to establish their “free exercise right has been substantially burdened.” Branch Ministries v. Rossotti, 211 F.3d 137, 142 (2000). The court, however, held the Johnson Amendment did not violate the First Amendment because the church failed to establish that their free exercise right had been substantially burdened. Despite the claim by the church that by revoking their tax exempt status would threaten its very existence, the court determined this was overstated because the impact of revocation “is likely to be more symbolic than substantial,” because if they stop intervening in political campaigns they can regain their tax-exempt status, and even if they do not, “the revocation of the exemption does not convert bona fide donations into income taxable to the Church.” Therefore, the burden is not substantial enough to be considered a violation of the First Amendment. See, Branch Ministries, 211 F.3d at 142-143.
It seems currently that courts are finding the Johnson Amendment does not, in fact, violate the First Amendment. The Supreme Court has said in the past they believe tax benefits nonprofits are given are “a form of subsidy that is administered through the tax system,” which seems in line with the view of supporters of the Johnson Amendment and these two Court of Appeals cases. See, Regan v. Taxation with Representation, 461 U.S. 540, 544 (1983). They have not, however, delivered a decision on the constitutionality of the Johnson Amendment as it applies to religious organizations. Therefore, despite the Court of Appeals cases, the fight over this issue is unlikely to end until the Supreme Court formally rules on the Johnson Amendment as it applies to religious organizations once and for all.
Kate Lipman anticipates graduating from Boston University School of Law in May 2021.
Time to Hang up the Boxing Gloves? The Fight Over the Johnson Amendment
Most Americans have never heard of the Johnson Amendment, never mind the nearly 70 year legal and political battle over its meaning and reach. What is the Johnson Amendment, and why is it so important to so many organizations that they have been either trying to protect or destroy it for decades? This post will attempt to explain the long-fought political battle over the Johnson Amendment.
The Johnson Amendment prohibits not for profit, or 501(c)(3), organizations from participating in politics, including restricting them from endorsing political candidates. In 1954, then-Senator Lyndon B. Johnson sponsored the amendment to the tax code after two tax-exempt organizations opposed his candidacy in the recent Texas primary. Until then, tax-exempt organizations had been extremely engaged in political activity through the country. The Johnson Amendment was relatively successful in getting tax-exempt organizations from being politically engaged, at least directly. Many organizations, however, simply have separate political branches called 501(c)(4) political action branches. 
Recently, Amendment opponents, such as Congressman Steve Scalise (R-La.) and 40 other Republican Representatives, have introduced the Free Speech Fairness Act. This bill seeks to amend the Internal Revenue Code of 1986 “to allow charitable organizations to make statements relating to political campaigns if such statements are made in the ordinary course of carrying out its tax-exempt purpose.”—effectively repealing the Johnson Amendment. If passed, it will permit 501(c)(3) tax-exempt organizations under Section 501(c)(3) to endorse or oppose political candidates without fear of losing their tax-exempt status.
Supporters of the Johnson Amendment are varied, including both secular and religious organizations. The most outspoken supporter of the amendment is the Freedom From Religion Foundation (FFRF). The FFRF and other similar organizations fear repealing the Johnson Amendment would blur the traditional line between church and state. Other religious organizations, such as the Jewish Federations of North America, oppose the FSFA because they fear getting involved with politics would tarnish the integrity of their faith. Many of these organizations, particularly the FFRF, are especially concerned about the threat of “dark money” they fear repealing the Johnson Amendment would create. “Dark money” refers to political spending by nonprofit organizations that are not required to disclose their list of donors to the IRS or the public. This hidden list of donors can be problematic as many believe this allows nonprofit organizations to receive donations in exchange for political endorsements, influence in elections, and lobbying activities. Specifically, all 501(c)(3) nonprofits, except for churches and other religious organizations, must submit Form 990 to the IRS and demonstrate how they are spending their money and how much money they are receiving (though it does not require disclosure of who the donors are). Because churches do not need to submit this form, the Freedom From Religion Foundation and other opponents of the FSFA fear the bill could lead to churches becoming unregulated Political Action Committees.
Many conservative and religious organizations, on the other hand, support the FSFA. Its biggest proponents are religious organizations such as the National Religious Broadcasters (NRB), as well as conservative organizations like the Family Research Council (FRC). The Johnson Amendment has also garnered attention from President Trump, who has promised on many occasions to eliminate it due to its restrictions on free speech for priests, pastors, and other religious organizations. These groups, the sponsors of the FSFA, and the President argue the Johnson Amendment is unconstitutional because it stifles free speech, including the ability of religious figures and organizations to openly endorse or oppose individual political candidates from the pulpit. Some groups, like the Family Research Council, even argue the Amendment restricts the content of sermons as well, a claim made in an article titled “Figures of (Free) Speech,” published on February 4, 2019, which has since been taken off of the Family Research Council website.
However, is this argument an accurate representation of the law? Does the Johnson Amendment actually stop religious leaders from preaching on topics like “life or marriage” or of “conscience and convictions,” as the Family Research Council claims? The answer seems to be no. The Johnson Amendment does not restrict churches from discussing social or moral issues with their congregations, or even from lobbying Congress. The only restriction the Johnson Amendment imposes is specifically related to candidate endorsements and/or candidate opposition. Moreover, individual priests and pastors are actually free to endorse candidates when they do so as individuals, on their own, when they are clearly speaking as private citizens and not for their religious organization.
Beyond the organizations who are vehemently opposed to the FSFA, a LifeWay poll published in 2016 found that 79% of Americans do not believe it is appropriate for pastors to endorse political candidates during a public church service.
This, therefore, begs the question, is the repeal of the Johnson Amendment really worth fighting for year after year? Not only do the constant attacks against the amendment cost pro-Johnson Amendment organizations like the FFRF money in time and labor expended through research and lawsuits, but it similarly costs opponents of the amendment valuable donation dollars that could be put towards something more meaningful or substantial.
In 2012, Pew Research published an independent guide to the IRS rules on political activity by religious organizations. The Pew Research guide “Preaching Politics From the Pulpit: 2012 Guide to IRS Rules on Political Activity by Religious Organizations” delineates specifically what religious organizations legally can and cannot do within the context of the Johnson Amendment. According to the guide, the political campaign intervention prohibition does not restrict the discussion of any issues desired, as long as they are not linked to supporting or opposing any specific candidates, PACs, or political parties. It therefore seems that the potential gains for the freedom of speech from this bill passing would be very little compared to the thousands of dollars wasted each year on both sides of the fight on this issue.
Finally, not only is the purpose of the bill not supported by the American public, but the concerns raised by opponents of the bill are especially troubling and should certainly make everyone question whether repealing the Johnson Amendment will ultimately do more harm than good. The separation of church and state is a foundational principle of our nation, and beyond the need to protect that balance, the concern organizations like FFRF have about the potential for dark money in religious institutions seems a valid concern, particularly because they do not submit Form 990.
Ultimately, lawmakers in Washington will need to decide whether it is worth continuing to introduce this bill every year and cost both sides of the argument time and money either trying to fight or support the repeal of the Johnson Amendment.
Kate Lipman anticipates graduating from Boston University School of Law in May 2021.
Raising the Blinds – Gaining Meaningful Insight into Pharmaceutical Pricing through Legislation
Rising healthcare costs are a growing concern across the United States; in 2016 U.S. health care spending was $10,348 per person – or 17.9 % of the nation’s Gross Domestic Product (GDP). To counter this alarming rise in healthcare costs, states are addressing one of the largest factors in rising healthcare costs – high drug prices.
Many factors contribute to the high price of healthcare in our country, some of which are natural to an aging populace due to the baby boom of the 1950’s as the proportion of the population that is 65 and over is projected to experience a large increase in the coming years. An increase in costs is natural with a larger number of consumers – addressing this change is an important, but avoidable, challenge to overcome.
One avoidable factor of increasing healthcare costs is rapidly increasing pharmaceutical prices. Variance in drug prices may be geographic; based on where the drug is sold , or whom the drug is being sold to (pharmacy v. government). Many factors contribute to price differences, but an important factor are Pharmacy Benefit Managers (PBMs) as an intermediate in the market. States have been working to roll back the PBM layer of the market for the pharmaceutical industry.
Pharmaceutical pricing has long been the target of legislators, but with a lot of talk and a surprising lack of action. Drug pricing is discussed in both major party’s campaign platforms of the major parties and has been featured prominently in speeches by President Trump, and has featured in initiatives by previous administrations. There has been an uptick of legislation passed in the past decade, at all levels of government, with state action against pharmacy benefit managers and President Trump’s signing the Know the Lowest Price Act and the Patient Right to Know Drug Prices Act. A common thread in the legislation is increased transparency because a big factor in the high drug prices — and medical care generally—is the lack of information for consumers and purchasers. Since 2015, California, Oregon, Louisiana, Nevada, Vermont, Connecticut, and Maryland imposed reporting requirements on pharmaceutical manufacturers who increase prices over an established threshold in a set time period. For example, California requires reporting when a drug that costs more than $40 and its wholesale acquisition cost (WAC) increases by more than 16% over two calendar years. The WAC is similar to a “list” price for pharmaceuticals to wholesalers and direct purchasers. The WAC, however, does not include discounts or rebates offered by pharmacy benefit managers.
The new transparency offers insight to price increases; if there are no legitimate reason for the increase other than higher profits due to market control, state officials, drug customers and the public can take action.
The states with transparency statutes have imposed different methodologies with manufacturers reporting to different government officials such as the Department of Health and Human Services, creation of new departments, or to the state’s Attorney General.
Oregon currently requires the most detailed reporting; manufacturers must report to the Department of Consumer and Business Services the following:
- Name, price of drug and net increase in price (in %) over previous calendar year
- Length of time on market
- Factors contributing to price increase
- Name(s) of any generic version(s) of the drug
- Research & Develop Costs from Public Funds
- Direct costs to Manufacturer
- Total sales revenue for drug over prev. calendar year
- Profit from drug over previous calendar year
- Drug's price at release and yearly increases over the past 5 years
- 10 highest prices paid for the drug during past year outside of the US
- Any other info relevant to price increase
- Supporting documentation
In contrast, California’s requirements provide for advance notice of price increases and unearthing the reasoning for the increase. The California law requires manufacturers to report (A) Date of increase, current WAC, and future increase in WAC (in dollar amounts); and (B) The change or improvement, if any, that necessitates the price increase. Purchasers then have notice of any forthcoming price changes and if the increase is warranted. California also requires a report for new drugs if its price exceed $670—the 2017 Medicare Part D threshold. California’s reporting scheme has been a model for other states.
Maryland’s approach was more severe, with a provision banning “price gouging” of generic drugs. An “unconscionable price increase” of any “essential off-patent or generic drug” is illegal and Maryland can levy a fine and take action to reverse the price change. The state did not include any limitation of the law to drugs that have come into or passed through Maryland.
The generic drug lobby, the Association for Accessible Medicines, challenged the law and the Fourth Circuit Court of Appeals struck down the law as an unconstitutional regulation of interstate commerce. Maryland has petitioned the Supreme Court to revisit the case.
The Pharmaceutical Research and Manufacturers (PhRMA), one of the largest pharmaceutical lobbying groups, has sued California alleging the law, like Maryland’s, is unconstitutional. Because California’s law is informational—and does not allow forced price changes—it is likely constitutional. In fact, PhRMA’s initial complaint was dismissed, and subsequently filed an amended complaint on Sept. 18, 2018.
It will be imperative for states seeking to regulate pharmaceutical manufacturers to observe where courts determine the extent of reporting they may require when they go after a manufacturer for increasing the price of their drug. For the time being, it appears that information-gathering may be the easiest available avenue for states seeking to curtail increases in drug prices. Seeking justifications and reasoning for large increases in drug prices may create a barrier for pharmacuetical companies seeking to impose unsubstantiated increases in drugs. Going further towards affirmative control of pricing appears to be off limits to states going as far as Maryland, but more careful structuring of the controls to the specific state may be permissible.
Drew Kohlmeier is a student in the Boston University School of Law Class of 2020 and is a native of Manhattan, KS, graduating with a degree in Biology from Kansas State University in 2016. Drew decided on Boston for law school due to his interest in health care and life sciences, and will be practicing in the emerging companies space focused on the life sciences industry following his graduation from BU.
Whose Legislation is it, Anyway?
It seems that after every mass shooting, the gun control debate transforms into a discussion about mental illness. Was the shooter mentally ill? If so, some gun rights advocates will deflect from the issue of gun safety and argue for mental health reform while gun control activists will argue for stricter gun laws–specifically those that make it harder for people with mental illnesses to buy guns. The most recent Las Vegas and Parkland shootings are no different. Despite the copious research suggesting that the existence of a mental illness correlates much more strongly with suicide than it does with interpersonal crimes, mental illness is once again being deemed the culprit. Of note is Speaker Ryan’s call for mental health reform, which he described as a “critical ingredient” in preventing further mass shootings. Ryan was subsequently questioned as to whether he thought repealing the Social Security Rule (a rule that expanded background checks to include Social Security data on people with mental illnesses) was a mistake. When pressed on the issue, Ryan argued that the Obama administration rule was an infringement on Second Amendment rights. President Trump has also advocated more treatment for people with mental illnesses as a solution to gun violence.
Although some federal laws designed to prohibit gun access to citizens with mental illnesses exists, it is
limited and under-enforced. Following the shooting at Virginia Tech, President Bush signed the NICS Improvement Amendments Act of 2007 into law, which attempted to identify individuals who are unqualified to possess guns due to mental illnesses or criminal backgrounds. This law proved to be inadequate; most notably when a mentally ill man, Adam Lanza, killed 20 first grade students and six teachers at Sandy Hook Elementary School in 2012. In response, President Obama proposed the Social Security Rule, which added more mental health records to the national background check system but was removed by Republicans in Congress under the Congressional Review Act in February of 2016.
There is a wide political divide in the gun control arena, with 79% of Democrats agreeing with the statement “it is more important to control gun ownership than protect gun rights,” compared to only 9% of Republicans. In fact, this divide has widened substantially since 2012, when 62% of Democrats and 21% of Republicans agreed with the statement.
However, despite this deep division, the issue of gun restrictions for those with mental illness stands as a unique common ground. According to a Pew Research poll from June 2017, 89% of both Republicans and Democrats support restrictions that would prevent people diagnosed with a mental illness from purchasing guns. No other gun policy proposal was found to have the same kind of bipartisan support, though barring gun purchases by people on no-fly lists and background checks for private sales and at gun shows come close.
Even more striking is the support for preventing people with mental illnesses from obtaining guns among gun and non-gun owners. Again, there is wide agreement amongst the two groups: 89% of both gun owners and non-gun owners support this policy proposal. Again, there is no other policy proposal that garners the exact same support amongst gun-owners and non-gun owners. Moreover, 82% of those who say it is more important to protect gun rights rather than control gun ownership actually favor laws that prevent the mentally ill from buying guns, compared with 77% support amongst those who say it is more important to control gun ownership.
Given that the policy restricting access to guns for those with mental illnesses is so widely accepted amongst Democrats and Republicans, gun owners and non-gun owners alike, why don’t we have a more robust policy in place?
One hypothesis is the National Rifle Association’s opposition to this type of gun control proposals and their generous campaign contributions to Republican politicians. In the 2016 election cycle, the NRA gave over $77,000 to the Republican National Committee, and $838,215 to individual federal congressional candidates. In addition, the group spent over $30 million in support of Donald Trump’s presidential campaign, more than any other outside group, according to the Center for Responsive Politics. Opensecrets.com, a campaign finance accountability website, wrote that “[t]his election cycle, the NRA spent more than $52 million—a number that will rise as final campaign finance figures are tallied — to carry on its effort to increase Republican control of government.” In a news article following“The NRA, of course, was among the earliest and staunchest supporters of Trump’s presidential bid. We thank him for his quick action on this measure and look forward to working with him and the pro-gun majorities in Congress to protect Americans’ Second Amendment rights.” Trump responded at the NRA convention in April where he stated “You came through big for me, and I am going to come through for you.”
As it turns out, even NRA members support legislation that prevents those with mental illnesses from purchasing guns. A July 2017 Pew Research poll that controlled for partisanship found that 79% of Republican members of the NRA support this policy proposal. However, NRA members also report a general level of satisfaction with the organization’s political authority. Only 9% of NRA members say that the organization has too much influence over gun laws and about six in ten members say that they are satisfied with the amount of influence that the organization has over gun laws.
Thus, it seems the future for the gun debate may be determined not by the popularity of the ideas proposed, but by the strength of Americans’ allegiance to a very powerful group in Washington. Either that, or these ironies tainting the gun debate remain a mystery.
Jessica Goldman anticipates graduating from Boston University School of Law in May, 2019.
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.
