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AMRI Academy

Applications IV: Health Care and Pharmaceuticals

week eight Faculty: Allison K. Hoffman, Amy Kapczynski

Week 8 explores the monopoly problems and the need for anti-monopoly and regulatory tools in the health care and pharmaceuticals sectors. First, describing the problem, the readings discuss U.S. health law and policy’s reliance on market-based policies that shift costs to consumers and encourage concentration of private power among providers and insurers. Allison Hoffman argues that this neoliberal “market bureaucracy,” created by law, delivers subpar health care outcomes in pursuit of illusory conceptions of “individualism” and “choice.” Similarly, Frank Pasquale describes the “hidden costs” of market-based policies that seek to cut health care costs, arguing that they misdiagnose the problem and inadequately compensate the health care expenditures that actually promote positive health outcomes. In pharmaceuticals, meanwhile, the U.S. intellectual property regime has exploded costs for, and restricted access to, lifesaving drugs, as Amy Kapczynski illustrates.

In place of these neoliberal approaches, the readings put forward a variety of proposals that sound in public utility, public options, and other regulatory approaches. Nicholas Bagley points to a long tradition of public utility-style regulation in the health care sector and argues that more stringent regulation of costs, access, and discriminatory pricing in the health care sector would be consistent with American legal tradition. Professor Hoffman discusses the promise of Medicare for All and the democratic movement supporting it. Professor Kapczynski and Jishian Ravinthiran outline the U.S. government’s available avenues, under existing law, to vaccinate the world by expanding access to the necessary IP and dramatically scaling up vaccine manufacturing. Other readings describe the limits of antitrust law in stemming hospital consolidation and the problems with current public-private programs like Medicare Advantage.

In the lecture video, Professor Hoffman dives into the limitations of competition and traditional regulatory tools in the health care sector. She details how the patchwork of government programs’ overreliance on markets fails to keep health care affordable and accessible. She also discusses the failures of antitrust doctrine to prevent consolidation among health care providers. Finally, she discusses health insurance reform options and the extent to which they would redress these failures. Professor Kapczynski details the skyrocketing costs of prescription drugs and how IP laws and regulatory regimes have combined to drive prices up and restrict access. Thus, according to Professor Kapczynski, “there is no free market in medicines.” Given that, the question is not free market versus government solutions, but how government can more equitably structure the provisioning of lifesaving drugs through law.