Archive

Archive for July, 2019
July 22nd, 2019 at 1:09 pm
Budget Negotiations: CFIF Opposes Use of Drug Price Controls via “Mandatory Inflation Rebates”
Posted by Print

In ongoing negotiations, it’s reported that some are proposing to employ destructive drug price controls as a mechanism to reach a budget agreement.  For multiple reasons that CFIF has highlighted, that poses a potentially catastrophic idea.

Specifically, it appears that debt ceiling negotiations may include a destructive proposal to reduce federal spending levels by targeting $115 billion from Medicare, which would derive largely from alleged “Medicare savings” through instituting a government-imposed mandatory “inflation rebates.”  As we’ve explained, inflation rebate proposals work by penalizing drug innovators with higher taxes whenever their products exceed an arbitrary inflation mark.  Currently, Medicare Part D’s structure works by employing market-based competition to mitigate drug costs via privately-negotiated rebates, meaning that no specific “price” reliably represents that drug’s underlying price.  Accordingly, the proposal would inherently undermine privately-negotiated Part D plan rebates, which the Congressional Budget Office (CBO) has said “appear to make the net prices approach the lowest prices obtained in the private sector.”  Indeed, as the Altarum Institute has highlighted, those Part D plans currently achieve greater brand medicine rebates than private insurers.

Critically, it must also be noted that inflation rebate proposals would violate non-interference clauses that facilitate competition among Part D plans, which provide a critical part of Part D’s success in mitigating costs since its inception.  They would also arbitrarily apply to new pharmaceuticals while bypassing generic brands, which now constitute approximately 90% of Part D prescriptions.  The proposal would also inescapably weaken incentives on the part of Part D plan sponsors to negotiate with drug manufacturers and minimize drug spending under a regime of statutorily-imposed rebates, thereby setting a negative precedent for those sponsors.  It also bears emphasis that private-sector limits on drug cost increases already exist via “price protection rebates” that Pharmacy Benefit Managers (PBMs) negotiate with manufacturers.

Accordingly, imposing price controls in Medicare Part D would fundamentally undermine its entire market-based model, which would in turn reduce research and development and slow progress toward new and improved medicines.

Adding insult to injury, such a proposal would constitute a raid on Medicare for the benefit of other government spending pork.  During this era of budgetary waste, the last thing that Congress should consider doing is sacrificing Medicare, particularly when affordability and access to pharmaceutical innovations remains such a top public priority.  Budgetary discipline and access to medicines remains a priority of the highest order, but market-oriented solutions, not destructive gimmicks, offer the optimal solution.  Any proposal to target Medicare Part D for mandatory inflation rebates has not been subjected to full review, committee research, hearings or debate.

American citizens, particularly seniors, should not be subjected to that danger.

 

July 18th, 2019 at 8:56 pm
TV Blackouts Reconfirm Need for Free Market Regulatory Reform
Posted by Print

For over two weeks now, failed retransmission negotiations between AT&T and Nexstar Media Group have deprived customers across the United States of 120 Nexstar television stations in 97 markets.

That’s unfortunately something to which far too many Americans have become accustomed recently, as 2019 has already witnessed more TV blackouts than any year in history.  And the news only gets worse:  CBS is now warning that stations in numerous major markets, including New York, Los Angeles, Chicago, Philadelphia, Dallas and others, could be blacked out as this week concludes.

Here’s the overarching problem.  Current laws dating all the way back to 1992 empower the federal government to pick TV market winners and losers by tipping the scales during negotiations.  Those laws governing what’s known as “retransmission consent,” “must-carry” obligations and “compulsory copyright” all derive from a bygone era, when most markets were served by a solitary cable provider.  But today, almost 30 years later, we obviously live in a drastically different consumer marketplace.  Specifically, alternative services like satellite, internet and other cable providers provide an expansive array of consumer options in the TV marketplace.

Yet here we are in 2019, with applicable federal regulations that remain unchanged, and fail to accommodate the fundamental video market evolution that has occurred.  Consequently, broadcasters today possess an unfair regulatory advantage in negotiations with providers, which in turn empowers them to insist upon excessive retransmission consent fees while retaining the alternative option of invoking must-carry rules.  In that manner, outdated laws inhibit free market principles from functioning in what should be an ever-evolving consumer marketplace.

And who pays the steepest price of all?  Consumers.  Including in the form of blackouts like we’re witnessing.

To finally put an end to these increasing blackouts, and spare consumers the headaches, we must reduce the federal government’s interference in the nationwide video marketplace.  That will allow broadcasters and video programming distributors to negotiate in a more even, market-centered environment.  An optimal scenario would be to enact the Next Generation Television Marketplace Act proposed earlier by Congressman Steve Scalise (R – Louisiana).  But in any event, consumers should demand that the federal bureaucracy remove its metaphorical finger from the scale, and instead finally allow all parties to negotiate in a free market, one in which neither side enjoys an inherent regulatory advantage.  Eliminate the outdated regulations, and allow the free market to work.

In a video market otherwise defined by rapid evolution and ever-greater choices, consumers deserve relief at long last.

 

July 15th, 2019 at 2:22 pm
CFIF to U.S. Senate: On Drug Prices, Say “NO” to Mandatory Inflation Rebate Proposals
Posted by Print

On behalf of over 300,000 of our supporters and activists across the nation, CFIF has written the following letter opposing any use of Mandatory Inflation Rebate Proposals when it comes to the issue of addressing drug prices:

We believe that market-oriented solutions offer the optimal solution, and resolutely oppose any use of mandatory inflation rebate proposals – which would unfairly penalize a drug’s manufacturer with higher taxes whenever that drug’s price rises faster than inflation – that will make matters worse, not better. Among other defects, such a government-imposed penalty would undermine Medicare Part D’s current structure, which uses market-based competition to mitigate drug costs. Part D currently works via privately-negotiated rebates, meaning that no specific price reliably represents a drug’s underlying price. Accordingly, the proposal would inherently undermine privately-negotiated Part D plan rebates, which the Congressional Budget Office (CBO) has said “appear to make the net prices approach the lowest prices obtained in the private sector.” Indeed, as the Altarum Institute has highlighted, those Part D plans currently achieve greater brand medicine rebates than private insurers.

Additionally, inflation rebate proposals would violate non-interference clauses that facilitate competition among Part D plans, which provide a critical part of Part D’s success in mitigating costs since its inception. They would also arbitrarily apply to new pharmaceuticals while bypassing generic brands, which now constitute approximately 90% of Part D prescriptions. The proposal would also inescapably weaken incentives on the part of Part D plan sponsors to negotiate with drug manufacturers and minimize drug spending under a regime of statutorily-imposed rebates, thereby setting a negative precedent for those sponsors. It also bears emphasis that private-sector limits on drug cost increases already exist via “price protection rebates” that Pharmacy Benefit Managers (PBMs) negotiate with manufacturers.”

The issue of reducing drug prices remains an important one, but it’s just as important that we pursue policies that make the situation better, not those that would make the situation far worse.

July 15th, 2019 at 12:46 pm
CFIF Applauds the FCC for Acting to Stop the Local Internet Power Grab

More than thirty years ago, Congress gave local governments the power to impose “franchise fees” and other regulations on cable television service. It was part of a broad framework for shared national and local authority over cable television in the 1984 “Cable Act,” which laid the foundation for the cable (and eventually satellite) TV boom of the 1980s and beyond.

By contrast, local governments have very limited power to tax or regulate the internet. Unlike television, which has a long tradition of serving independent local markets with discrete programming, options and infrastructure, from the beginning it’s been clear that the internet is inherently national and interstate and can only be effectively regulated at the federal level. That has been core federal policy for decades, as most recently expressed in the 2017 Restoring Internet Freedom Order, which concluded that, “regulation of broadband Internet access service should be governed principally by a uniform set of federal regulations, rather than by a patchwork that includes separate state and local requirements.”

Recently, however, a number of local franchising authorities have tried to upend that federal policy and claim the right to impose local taxes and regulations on the internet by seizing on the fact that some broadband providers also offer cable television services. Now, the Federal Communications Commission (“FCC”) is rightly working to put a stop to this local government internet power grab – moving to make clear that the Cable Act only allows local franchising boards to tax and regulate cable companies based on their cable television operations.

If every local franchising board in the country can impose its own rules and fees on internet providers, the freewheeling and open internet we all enjoy today will slowly grind to a halt. The resulting cacophony of regulation will overwhelm operators, slowing down cyberspace and making it less reliable and less secure. It will drive away new investment needed to continue to achieve ever-increasing speeds users have come to take for granted. And it will confuse consumers who expect the internet to be a consistent experience everywhere they go.

This is the exact harm federal policy strives to avoid. As the FCC explained, “allowing state or local regulation of broadband internet access service could impair the provision of such service by requiring each ISP to comply with a patchwork of separate and potentially conflicting requirements across all of the different jurisdictions in which it operates.”

For that reason, CFIF encourages the FCC to vote to shut down the local power grab by making clear that neither the Cable Act nor any other source of local regulatory power authorizes franchise boards to tax or regulate the internet or any other non-cable-television businesses.

The future of the internet and our unfettered access depend on it.

Tags: ,
July 15th, 2019 at 12:18 pm
This Week’s “Your Turn” Radio Show Lineup
Posted by Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM/99.1FM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.” Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT: Phil Kerpen, President of American Commitment: Obamacare, Government Run Healthcare and Health Care Choices;

4:15 CDT/5:15 pm EDT: Ilya Shapiro, Director, Robert A. Levy Center for Constitutional Studies at the Cato Institute: SCOTUS Wrap-Up;

4:30 CDT/5:30 pm EDT: Beth Akers, Senior Fellow at the Manhattan Institute: June 2019 Jobs Report and Student Debt;

4:45 CDT/5:45 pm EDT: Rachel Greszler, Research Fellow in Economics, Budge and Entitlements at The Heritage Foundation: $15 Federal Minimum Wage and Salary Gaps in Soccer;

5:00 CDT/6:00 pm EDT: John Strand, CEO of Strand Consult and Co-Creator of ChinaTechThreat.com: Trade Deal with China;

5:15 CDT/6:25 pm EDT: Lance Izumi, Senior Director of the Center for Education at the Pacific Research Institute: Breaking the Liberal Monopoly on College Faculties; and

5:30 CDT/6:30 pm EDT: William J. Conti, Attorney at Baker & Hostetler in Washington, DC: Politics Today.

Listen live on the Internet here. Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

Tags:
July 9th, 2019 at 5:48 pm
Patent Protection at a Critical Juncture
Posted by Print

At CFIF, we’ve consistently and unapologetically celebrated the central role of intellectual property (IP) rights – patents, copyrights, trademarks and trade secrets – in making America the most innovative, prosperous and powerful nation in human history.

Recent legal developments domestically, as well as growing focus upon Chinese IP malfeasance internationally, provide new emphasis on the importance of strong U.S. patent protections for American inventors, and highlight some increasingly obvious concerns regarding patent infringers exploiting the U.S. Patent Trial and Appeals Board (PTAB) for nefarious and selfish purposes.

A couple of weeks ago, patent holder plaintiff TQ Delta won on all eight counts in its first case in a series against 2Wire, Inc. over digital communication technology patents.  The win thereby sets a strong precedent of IP enforcement in what will be the first trial over its DSL patent porfolio.

In another recent example that will instantly resonate with parents as their children splash amid water balloons in their backyards this summer, a federal judge in Texas went to the rare extreme of actually doubling a multimillion-dollar jury award in favor of toy company Tinnus Enterprises, maker of “Bunch O Balloons” water balloon devices, in its patent infringement case against Telebrands.  More often, judges reduce jury awards that they consider excessive.  In this case, however, U.S. District Judge Robert Schroeder III held that the “serial infringement” of Tinnus’s patents and “flagrant” litigation misconduct merited more than doubling the original damages assessment.

The ongoing case of EagleView v. Verisk offers another salient example, a proverbial David innovator versus a Goliath infringer.  It also presents a perfect opportunity to correct a patent infringement injustice and offer a deterrent lesson to other potential patent violators of the consequences they will face.  In a nutshell, the plaintiff EagleView develops products that create 3-D models from aerial images of rooftops, from which insurers and construction companies can more accurately reach repair cost estimates.  After defendant Verisk unsuccessfully attempted to purchase EagleView in 2014, it allegedly shifted to using its subsidiary Xactware Solutions to infringing EagleView’s patented technology, triggering EagleView’s lawsuit for willful patent infringement.

Since that date, Verisk has employed an array of tactics to prevent EagleView’s lawsuit from reaching a jury, such as filing multiple petitions at the PTAB to invalidate EagleView’s underlying patents, which a federal Court of Appeals found “unpersuasive.”  Verisk has also petitioned the District Court multiple times to invalidate EagleView’s underlying patents, which the Court rejected similarly.  Now, Verisk has even resorted to joining the LOT Network, an openly anti-IP group that includes Google and other titans.  Hopefully, those tactics will be put to an end at long last.

All of this serves to highlight once again the need to protect IP, and patent rights specifically, at the legislative, executive and judicial levels.  At the Congressional and executive levels, legislation to address patent eligibility and U.S. Patent and Trademark Office (PTO) reform are critical, as CFIF has previously emphasized.  Additionally, abuse at the PTAB level must not be tolerated.  And at the judicial level, courts must hold patent infringers accountable, and grant injunctive relief to patent holders to halt violations.  By holding violators accountable, we can not only deter other potential violators, but also provide the incentive to innovators by creating greater assurance that their work will be rewarded and protected.

America’s tradition of leading the world in innovation and IP protection is ultimately at stake.

July 1st, 2019 at 12:13 pm
This Week’s “Your Turn” Radio Lineup
Posted by Print

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM/99.1FM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Lee Casey, Partner at Baker & Hostetler – Return to the Constitution’s Original Meaning;

4:15 CDT/5:15 pm EDT:  Ilya Shapiro, Director, Robert A. Levy Center for Constitutional Studies at the Cato Institute – SCOTUS Wrap-Up;

4:30 CDT/5:30 pm EDT:  Tzvi Kahn, Senior Iran Analyst at the Foundation for Defense of Democracies – Iran;

4:45 CDT/5:45 pm EDT:  Justin Bogie, Senior Policy Analyst at The Heritage Foundation – Withhold Congress’ Pay;

5:00 CDT/6:00 pm EDT:  Sally Pipes, President and Chief Executive Officer of the Pacific Research Foundation and Thomas W. Smith Fellow in Health Care Policy – Medicare-for-All;and

5:30 CDT/6:30 pm EDT:  Timothy Lee, CFIF’s Senior Vice President of Legal and Public Affairs – The Latest News from Capitol Hill and the Supreme Court.

Listen live on the Internet here. Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

Tags: