Consumer Law & Policy Blog

More Info on Citizens United Revisited

We posted on Monday about whether a recent case out of the Montana Supreme Court would be a vehicle for the U.S. Supreme Court to revisit its controversial 5-to-4 Citizens United ruling, or whether the Montana ruling upholding a state ban on direct corporate campaign spending might just be summarily reversed in light of Citizens United. I thought readers might be interested in perusing all the briefs filed in the Montana case, which SCOTUSblog has conveniently posted here. 

Is Unfair Exploitation of a Legal Loophole Blocking Access to Generic Drugs?

Under federal law, after a brand-name drug's patent expires (or if the patent is invalid), a generic drug manufacturer can make a copies and sell them if they are bioequivalent to the brand-name drug. The generic manufacturer must have a sample of the brand-name product so that it can make copies. If the copies are good copies, the FDA approves them, they are marketed to the public, and drug prices drop, to the public's benefit. (This oversimplifies the process, but that's basically what happens.)

But as explained in today's Washington Post,this process doesn't work for all brand-name drugs:

Some drugmakers assert they are unable to create cheaper generic versions of drugs because their rivals are exploiting a legal loophole. ... [T]he government has placed restrictions on distributing some drugs that are dangerous or prone to abuse. Critics say manufacturers of those brand-name drugs are using the restrictions to stop generic makers from getting samples to test. No samples, no generics. ... Critics warn that the practice is bound to become more entrenched and widespread.

The Federal Trade Commission is investigating to determine whether withholding samples is an unfair method of competition. The Connecticut Attorney General is investigating as well.

Dealing with Student Loan Debt

Some advice from Michelle Singletary here.

CFPB is Looking Into Prepaid Cards

According to this story by Ylan Mui, the Consumer Financial Protection Bureau may issue rules to improve "transparency and safety" in the prepaid card industry. A New York Times piece indicates that the CFPB will issue "a preliminary rule" today. Coincidentially, this story entitled "Five Myths About Prepaid Cards" appeared today in the Huffington Post. 

Letter Grades for Medical Tests

Jeff just posted about his suggestion that banks be given letter grades for their overdraft programs. Grades, he says, are an excellent way to convey some types of information to banking consumers (while encouraging better bank behavior).

The United States Preventive Services Task Force (USPSTF) thinks similarly about medical procedures, including tests; it gives medical tests grades hoping that the grades will be easily understood (and, therefore, followed) by medical consumers. The USPSTF just gave a big fat D to the PSA test, the popular test given routinely to millions of middle-aged and elderly men to screen for prostate cancer, most of whom have no signs of prostate cancer. The USPSTF found that routine PSA testing harms more people than it helps, and that, in general, the test should not be used routinely.

(D is the lowest grade given and looks like this:

The USPSTF recommends against the service. There is moderate or high certainty that the service has no net benefit or that the harms outweigh the benefits.

Read the USPSTF guidelines published in the Annals of Internal Medicine.

The SA recommendation is bound to be controversial. The Obama Administration says that, despite the USPSTF's recommendation, Medicare will continue to pay for routine PSA tests. (Private insurers tend to cover tests covered by Medicare.) What explains the Medicare decision? Does the Administration disagree with the USPSTF's analysis? Does it want more time to study the issue? Or is something else at work?

Letter Grades for Banks

by Jeff Sovern

I have a letter in the online version of today's Times in which I argue that bank overdraft programs should be given letter grades just as restaurants are for hygiene in New York and elsewhere.  The letter states "Just as restaurants cleaned up to earn “A” grades, banks would seek A’s. That will help all consumers, including those who disregard disclosures."

I have blogged before about the effectiveness of such letter grades.  My view is that consumer advocates should argue for similar letter grades for disclosures when appropriate.  Many consumers who would be overwhelmed by a slew of complicated disclosures find single letter grades usable and so can base decisions on them.  Letter grades have limits: they will not work, for example, when different people might have different preferences (e.g., which would be better?  lower loan payments and a longer payout or larger loan payments for a shorter period?  Different people would answer differently) but when most can agree on a value (e.g., clean restaurants), and that value can be measured by fairly objective criteria (e.g., insect infestation), they work just fine. And those who don't care can simply ignore them. 

AALS Call for Papers on the Response to the Debt Crisis

I've been asked to post the following:

The AALS sections on Poverty Law and Clinical Legal Education will sponsor a joint program on January 5, 2013 at the AALS Annual Meeting, entitled The Debt Crisis and the National Response: Big Changes or Tinkering at the Edges?

The program will explore ways in which our clients and communities have experienced the national debt crisis. Specifically, the program will consider the nation’s response to the crisis, considering the impact (or lack of impact) of new and proposed federal and local regulations on some of the major debt-related issues, including predatory lending, mortgage fraud, credit reporting, debt recovery, and litigation surrounding contested debt. The program will also include an advocacy-focused discussion on debt-related issues highlighting some of the new and different challenges communities face as a result of the recession. Among the questions to be  considered are: What types of innovative programs exist at the local level? How are new regulatory structures being implemented? How are law school teachers, and specifically law school clinics,responding to the debt crisis? What sort of court-based or community-based programs are making headway on some of the issues affecting our clients? Where can we go from here?

The joint session seeks papers for presentation and publication relating to the program’s topic. Submissions may include papers on substantive law, interdisciplinary innovation or analysis, policy, empirical work, or clinical pedagogy, that relate to the issues of debt and lending in a wide range of contexts. For example, papers may explore the creation and development of innovative court-based, or community-based programs, ways in which new regulatory structures are being (or should be) implemented, the accessibility of the legal system to litigants contesting debt, as well as how law school teachers, and specifically law school clinics, are responding to the debt crisis.

Cell Phone Use While Driving, Liability, and Public Safety

This Washington Post article explains that employers are increasingly prohibiting their employees from using cell phones while they drive for the company. Why? Because of the liability costs:

One [cell phone using driver-employee] was a lumber salesman who crippled a 78-year-old woman. Another was driving a toy company’s van when he killed a college sophomore. When a cable company guy rammed a stopped car at 71 mph, a woman and her mother died. A driver in a com­pany car didn’t react when traffic slowed, rear-ending a Honda in a chain-reaction crash that killed a 32-year-old woman. All four drivers were using their cellphones. At a time when the National Safety Council estimates that about one-quarter of all crashes involve cellphones or texting — about 1.2 million accidents a year — these four crashes had something else in common. The companies that employed those drivers were sued.

So, given the potential liability -- the article explains that companies have been socked with large judgments -- many Fortune 500 companies have banned cell phone use by driver-employees. A key incentive for some of the big companies was the National Transportation Safety Board's December 2011 recommendation that states ban all non-emergency use of cell phones and other personal electronic devices while driving. The NTSB recommendation included hands-free devices as well as hand-held devices. Why? Because studies show that hands-free cell phone use while driving is as dangerous (or nearly as dangerous) as hand-held use.

What's interesting here is that even though states are unlikely in the near future to ban hands-free cell phone use while driving, the tort system may begin to move the country in that direction. With a quarter of all crashes involving distraction from cell phone use or texting, how long before car insurance companies begin to demand, as a condition of extending insurance, promises from their insureds that they will not use cell phones and other PEDs while driving? (Perhaps they are already doing it.)

 

Law Schools Shrinking

In this post a while back, Jeff Sovern discussed the sizeable drop in the number of law school applicants and predicted that some law schools would accept students with weaker credentials while others would shrink the size of their classes. This article explains that several schools, including a couple "top 50" schools, are doing the latter.

Is Romneycare a Success?

Jonathan Cohn says yes in this New Republic piece:

Romneycare’s record is genuinely impressive. The main goal of the reforms was to make sure more people have access to health care and fewer people struggle with the costs of care bills. The evidence suggests it has accomplished both goals. Nearly everybody in the state has health insurance, while data suggest more people have regular access to care and fewer people face crushing health care costs. The improvement has been incremental—too incremental, for my taste. Plenty of people still struggle. But the program has certainly alleviated hardship, at a time when rising health care costs and a sluggish economy have been increasing hardship in the rest of the country. The usual rap on the Massachusetts health reforms is that they haven’t controlled medical costs. And it’s true: Romneycare hasn’t slowed the growth in health care spending. But that was never its goal. The idea was to expand coverage and then, hopefully, address costs later. This is precisely what the state is doing right now: Lawmakers and stakeholders are hammering out a law that, they hope, will blaze a trail for cost containment just as the previous reforms blazed a trail for coverage expansion.

Cohn points to this article by Sarah Kliff of the Washington Post for more detail on Massachusetts' efforts to rein in costs.