Showing posts with label regulation. Show all posts
Showing posts with label regulation. Show all posts

Monday, February 5, 2024

The NFL embraces sports gambling for fans but not for players

 The Superbowl is in Las Vegas, and gambling is being embraced by the NFL for fans, but not for players and other NFL employees.

The NYT has the story:

N.F.L.’s Rapid Embrace of Gambling Creates Mixed Signals. The league is pushing to popularize and benefit from sports betting while still trying to guard against the potential pitfalls for its players, employees and fans.  By Jenny Vrentas

"Since the Supreme Court struck down, in 2018, a federal law that effectively banned sports betting outside Nevada — a prohibition once backed by the N.F.L.’s commissioner, Roger Goodell — the N.F.L. has embraced the gambling industry. It has forged partnerships reportedly worth nearly $1 billion over five years with sports betting companies, and permitted a sports book to operate inside one of its stadiums. Now it even has a team in Las Vegas, which the league shunned for decades because any affiliation was seen as a threat to the integrity of the game.

"Yet the embedding of sports gambling so quickly into the culture of the league has resulted in jarring contradictions. The N.F.L. is pushing to popularize and benefit from sports betting while still guarding against the potential pitfalls that it long condemned. While the league donates money to promote responsible gambling, its broadcasts are peppered with advertisements for sports betting companies. The N.F.L. is part of a growing apparatus that encourages casual fans to regularly place wagers on games, while punishing league employees — most notably players — who might do the same.

...

"Americans legally wagered more than $115 billion on sports in 2023, according to the American Gaming Association, the national trade group for the gambling industry. Nearly 25 million more Americans bet on sports last year than in 2018, the group said, and the number of states where betting on sports is legal will reach 38 this year.

...

"[A] report projected that around $1.5 billion would be legally wagered on next Sunday’s Super Bowl, more than 1 percent of the money bet legally on all sports last year.

...

"n 2021, the year the N.F.L. struck deals with its three sports book partners, it gave the National Council on Problem Gambling a three-year, $6.2 million grant that was used in part to modernize the help line that appears at the bottom of betting ads. The league’s contribution is a small fraction of what gambling companies pay to be part of the N.F.L.’s marketing apparatus, but it is the largest grant in the council’s history and exceeded the nonprofit’s grant total over the previous four years, according to tax filings.

...

"The league’s approach to gambling violations within its own ranks, though, remains punitive. For decades, sports leagues have believed that gambling could damage the integrity of results — with worries over a player’s throwing a game because of a bet, for instance — so the focus has been on enforcement and punishment over prevention and treatment.

"The N.F.L. prohibits league and team personnel from betting on any sport, while players are allowed to bet on sports other than the N.F.L., as long as they do not do so at the team facility or while on team or league business. While in Las Vegas for the Super Bowl, members of the Kansas City Chiefs and the San Francisco 49ers and the hundreds of league employees, many staying at Caesars Palace, are not permitted to play casino games and may enter a sports book only if passing through to another part of the hotel."

Friday, January 26, 2024

The DOJ on competition for workers

 A lot of market design is done by regulators, and some of that is done to enforce existing laws.  Here's a report from the Department of Justice, focusing on four cases involving payment to workers (including authors of books).

Athey, Susan, Mark Chicu, Malika Krishna, and Ioana Marinescu. "The Year in Review: Economics at the Antitrust Division, 2022–2023." Review of Industrial Organization (2024): 1-20.

"In this review article, we report on five enforcement matters that expanded the scope of enforcement by the Division. The first four enforcement matters highlight a number of the Division’s actions to protect labor market competition in criminal and civil merger and non-merger cases. These include: criminal enforcement against a provider of contract health care staffing services that allocated nurse employees through a no-poaching agreement and agreed to fix the wages of those nurses; civil enforcement to stop an e-Sports league from effectively imposing a salary cap on its players; civil enforcement to stop a conspiracy among poultry processors to share information about worker compensation; and the successful challenge of a merger between two of the largest book publishers in the U.S., which preserved competition for books that will benefit authors."

Monday, January 22, 2024

Reporting and misreporting from Organ Procurement Organizations (OPOs)

 Because there are shortages of organs for transplant, it is important to measure how successful Organ Procurement Organizations (OPOs) are at recovering and transplanting organs.  But sometimes definitions can get in the way, and this was the case in islet transplants from deceased donors, into patients with diabetes.  Pancreatic islets are the cells that produce insulin, and it was (and I think still is) regarded as an experimental procedure to transplant islets from a deceased donor's pancreas, rather than the whole pancreas.  So islet transplantation was classified as a research activity.

To encourage this use of deceased donor pancreases, recovery of a pancreas "for research" was counted as a transplant. But some OPO's have heavily gamed this, reporting that they recovered a pancreas when the "research" wasn't connected to transplantation.  That loophole is now being closed.

Here's a January 18 memo from HHS, CMS, Center for Clinical Standards and Quality

Organ Procurement Organization (OPO) Conditions for Coverage – Definition Clarification 



"Background:

"The OPO CfCs are intended to drive improvements in organ procurement and transplantation through, among other provisions, the donor and transplantation outcome measures. OPOs are required to report data related to pancreata procured for research, and this data is incorporated into calculations used to assess compliance with the donor and transplant outcome measures and are used for re-certification purposes. To facilitate accurate reporting of data related to pancreata donors, the term “donor” is defined in CMS regulation to specify that, among other requirements, an individual would be considered a donor even if only the pancreas is procured and is used for research or islet cell transplantation.

"CMS has noted a significant increase in the number of pancreata procured since this definitionwas revised in 2020, raising questions about the interpretation of this definition by OPOs and how this definition is applied to reporting data related to donors of pancreata used for islet cell research. There is a concern that the increase in pancreata procured may not reflect a meaningful increase in pancreata being actually used for islet cell research, and instead may reflect pancreata procured for other purposes. This memo is clarifying that the pancreata must be used for islet cell research. 

...

"In summary, this memo is clarifying that consistent with the Pancreatic Islet Cell Transplantation Act of 2004, only pancreata procured by an OPO and used for islet cell transplantation or research shall be counted"

Tuesday, January 2, 2024

What's ahead for U.S. organ allocation in the coming year

 Here's the December announcement from HRSA of their plans for reforming organ procurement and allocation this year.  

Organ Procurement and Transplantation Network (OPTN) Modernization Initiative. HRSA's approach to securing best-in-class expertise and an independent Board of Directors, December 2023 Updates

"At every step of the modernization process, HRSA has been committed to robust competition for the first-ever multi-vendor solicitations for OPTN contracts, and we were pleased that Congress supported our vision for fundamental reform through passage of the bipartisan Securing the U.S Organ Procurement and Transplantation Network Act. For more than a year, we have pursued a fundamental sea change in how the OPTN operates in order to improve the performance, transparency, independence, and accountability of this life-saving system for patients – the first time in the nearly 40-year history of this program that any Administration has advocated for this type of fundamental reform to break up the monopoly. Below is an update on the progress made to date and details regarding next steps. 

...

"A key element of HRSA’s OPTN Modernization Initiative is the President’s Fiscal Year 2024 Budget proposal to more than double investment in organ procurement and transplantation with a $36 million increase over Fiscal Year 2023 for a total of $67 million. In light of the uncertainty regarding full-year appropriations for Fiscal Year 2024, as well as the upcoming holidays and HRSA’s commitment to providing at least 60 days for potential bidders to respond to solicitations, HRSA plans to issue the solicitations in January 2024.

...

"1. Launching an Independent OPTN Board of Directors

"Current practice: For nearly 40 years, the Board of Directors for the Organ Procurement and Transplantation Network (OPTN) has been comprised of the same individuals who serve as the Board of Directors for the private entity that has held the OPTN contract. No formal requirements existed to protect against conflicts of interest resulting from this shared role.

"Under HRSA’s OPTN Modernization Initiative:

"HRSA will issue a solicitation in January 2024 for independent non-profit organizations to bid on supporting an independent OPTN Board of Directors in order to ensure mission-driven governance, strong conflict of interest policy, and that the system remains a public good not a private asset. The organization awarded the OPTN Board Support Contract will not be awarded any other OPTN contract.

...

"2. Robust Competition for First Ever Multi-Vendor Solicitations to Support Best-in-Class Vendors for OPTN IT, Operations, Communications, Research and Evaluation

"Current practice: Across the nearly 40-year history of the OPTN, all functions of the OPTN have been managed by a single vendor and not competed based on technical expertise in areas like IT or operations. This does not serve patients well and does not allow the system to keep pace with modern technology.  

"Under HRSA’s OPTN Modernization Initiative:

"Phase 1 — Competitive Transition Contracts:

"In January 2024, HRSA will release solicitations open to all non-profit and for-profit organizations for proposals for OPTN work related to information technology management, operations, data analytics/research, and communication.

"These contracts will support the transition from the legacy OPTN system to a modernized system and approach while ensuring uninterrupted access to the organ matching system and related processes in order to support transplantation and prevent unnecessary risk while protecting patients. As such, we refer to them as Competitive Transition Contracts.

...

"Phase 2 — Next Gen Contracts:

"In Summer 2024, HRSA will issue solicitations open to all non-profit and for-profit organizations for proposals for the OPTN Next Gen contracts.

"The Next Gen contracts will prioritize human-centered design practices and will focus on developing a truly modern organ matching technology solution that is highly reliable, secure, and user-friendly."

######

So the plan is to start this month with bids for contracts to manage the transition from the current system to the 'next generation' system, and to follow those in the summer with bids to design the next generation system. (If that seems out of order to you, you're not the only one.)

Sunday, November 5, 2023

Deceased organ donation in the Economist (article and letter to the editor)

 Here's a recent article on deceased organ donation, in The Economist, followed by a letter to the editor from Alex Chan and me.

In America, lots of usable organs go unrecovered or get binned. That is a missed opportunity to save thousands of lives

"More than four-fifths of all donated organs and two-thirds of kidneys come from dead people (who must die in hospital); living donors can give only a kidney or parts of a lung or liver. Whereas some countries, such as England, France and Spain, have an opt-out model, in America donors must register or their families must agree. Persuading them will always be hard: Dr Karp’s hospital gets consent from about half of potential donors.

...

"Responsibility lies partly with some of the 56 nonprofit Organ Procurement Organisations (opos), like LiveOnNY, that do the legwork. Brianna Doby, a researcher and consultant, advised Arkansas’s opo in 2021 and was astounded to learn that most calls about potential donors went unanswered outside the nine-to-five workday and at weekends. Other opos, by contrast, sent staff to hospitals within an hour of an alert about a prospective donor.

...

"Yet unrecovered organs are not the only reason America could do more transplants. A surprising number of organs from deceased donors end up in the rubbish: more than a quarter of kidneys and a tenth of livers last year.

...

"Hospitals are often risk-averse, too. Discard rates are higher for organs of lower quality.

...

"For elderly recipients, getting older or otherwise risky kidneys generally means better odds of survival than staying on dialysis. But hospitals dislike using them for two reasons. First, they can lead to more complications and thus require more resources, eating into margins. Second, if the recipient dies soon after the transplant, hospitals suffer—a key measure used to evaluate them is the survival rate of recipients a year after transplant. According to Robert Cannon, a liver-transplant surgeon at the University of Alabama at Birmingham, hospitals succeed by being excessively cautious and keeping patients with worse prospects off waiting lists."

#########

And here's our followup letter to the editor, published November 2:

Organ-donation economics

"More than 110,000 Americans are waiting for an organ transplant and over 5,000 died waiting for an organ in 2019. Close to 6,000 recovered organs were discarded. “Wasted organs” (September 23rd) correctly pointed out that the responsibility lies in part with non-profit Organ Procurement Organisations and in part with the excessive caution exercised by transplant centres when deciding who to conduct transplants for and which kidneys to use.

"Numerous initiatives in Congress, and more proposed by various non-governmental agencies, such as the Federation of American Scientists and the National Academies of Sciences, Engineering and Medicine, among others, have been focused on tweaking how the performance of organ procurers and transplant centres should be measured while keeping in place the system that put us in today’s quagmire. As we indicate in our recent paper (conditionally accepted at the Journal of Political Economy), such approaches that keep regulations fragmented are bound to be inefficient, given that the incentives and opportunities facing organ procurers and transplant centres are intertwined.

"We show that “holistic regulation”, which aligns the interests of organ procurers and transplant centres by rewarding them based on the health outcomes of the entire patient pool, can get at the root of the problem. This approach also leads to more organ recoveries while increasing the use of organs for sicker patients who otherwise would be left without a transplant.

"In the end increasing access to kidney transplantation will require the improvement of the entire supply chain of organs. This means boosting donor registrations and donor recoveries from the deceased. It also means increasing living donations, and co-ordinating donations through mechanisms like paired kidney donations and deceased-donor-initiated kidney- exchange chains.


Alex Chan, Assistant professor of business administration, Harvard University

Alvin E. Roth, Professor of economics, Stanford University

####

And here's the paper referred to in our letter, on Alex's website:

Regulation of Organ Transplantation and Procurement: A Market Design Lab Experiment, by Alex Chan and Alvin E. Roth

Abstract: "We conduct a lab experiment that shows current rules regulating transplant centers (TCs) and organ procurement organizations (OPOs) create perverse incentives that inefficiently reduce both organ recovery and beneficial transplantations. We model the decision environment with a 2-player multi-round game between an OPO and a TC. In the condition that simulates current rules, OPOs recover only highest-quality kidneys and forgo valuable recovery opportunities, and TCs decline some beneficial transplants and perform some unnecessary transplants. Alternative regulations that reward TCs and OPOs together for health outcomes in their entire patient pool lead to behaviors that increase organ recovery and appropriate transplants."

Thursday, August 31, 2023

The underbelly of the global art market (NYT)

 Art is not just art, it's also an investment opportunity, and one that evades many of the regulations that apply to investments recognized as securities.

The NY Times has the story, which is long and interesting throughout.  It follows an investigation begun by the lawyer Claude Dumont Beghi .

The Inheritance Case That Could Unravel an Art Dynasty/How a widow’s legal fight against the Wildenstein family of France has threatened their storied collection — and revealed the underbelly of the global art market.  By Rachel Corbett

"First, she drew up a list of known assets, which soon zigzagged into a chart of far-flung bank accounts, trusts and shell corporations. Over the course of several years, she would fly around the world to tax havens and free ports, prying open the armored vaults and anonymous accounts that mask many of the high-end transactions in the $68 billion global art market. Multimillion-dollar paintings can anonymously trade hands without, for example, any of the requisite titles or deeds of real estate transactions or the public disclosures required on Wall Street. She would learn that the inscrutability of the trade has made it a leading conduit for sanction-evading oligarchs and other billionaires looking to launder excess capital. 

...

"Independent of any national jurisdiction, free ports allow traders to ship and store property without paying taxes or customs duties. If a dealer buys a painting in one country, he can ship it to a free port without paying import taxes; then, when he is offered the right price, he can sell it there too, without paying capital gains. It has been estimated that $100 billion worth of art and collectibles are held in the Geneva free port alone, to say nothing of those in Zurich, Luxembourg, Singapore, Monaco, Delaware or Beijing.

...

"many of their practices are commonplace in high levels of the art trade, which a 2020 U.S. Senate subcommittee called the “largest legal, unregulated market.” Unlike financial institutions, art businesses are not expressly subject to the Bank Secrecy Act, which requires firms to verify customers’ identities, report large cash transactions and flag suspicious activity. A study from the U.S. Department of the Treasury last year cited a figure estimating that money laundering and other financial crimes in the art market may amount to about $3 billion a year. (Britain and the European Union, however, have implemented anti-money-laundering regulations that require stricter due diligence in art transactions there.)

"According to a report by Art Basel and UBS, auction houses did about $31 billion in sales last year. They say that they know who their clients are, but those may just be the names of art advisers or other intermediaries. And collectors’ insistence on anonymity, long framed as genteel discretion, hasn’t budged. The buyer of the most expensive artwork ever sold at auction, Leonardo da Vinci’s $450.3 million “Salvator Mundi,” registered at Christie’s a day before bidding with a $100 million down payment, identifying himself as one of 5,000 princes in Saudi Arabia. A few weeks later, it was revealed that the true buyer was Crown Prince Mohammed bin Salman — who was reportedly displaying the painting on his superyacht — and that a little-known cousin of his bought it as a proxy." 

Sunday, August 6, 2023

Growing pains for legal marijuana, in California and beyond

The market for legal marijuana in the U.S. is suffering from (literal) growing pains, as large scale legal cultivation runs into both crop diseases, and zoning issues.

As a crop that is legal at the state level in many states, but still illegal under federal law, large cannabis farms don't get some of the benefits regarding the spread of plant diseases that are provided for other crops by the U.S. Department of Agriculture.

The WSJ has the story:

Cannabis Industry Confronts Billion-Dollar Threat: Weak Weed. Pathogen spreading among crops is cutting recreational drug’s potency, forcing growers to cull ‘dudded’ plants.  By Dean Seal

"A pathogen is contaminating cannabis crops around the country and threatening to leave billions of dollars of losses in its wake. 

"Cannabis researchers and experts are sounding the alarm for what is known as hop latent viroid, or HLVd, and cultivators are stepping up efforts to discover whether their plants are infected. The pathogen can drastically reduce the potency of the psychoactive compounds in marijuana, a phenomenon that growers have long called “dudding.”

...

"Plant pathologists and cannabis experts say the spread of the viroid was likely accelerated by the popularity of weed from California, which legalized cannabis for medical use in 1996.

"The spread also reflects the evolution of the cannabis business into a major agricultural crop. The risk of a new disease expanding increases for any crop that goes from low to high production, as cannabis has in the past two decades, said Jeremy Warren, Dark Heart’s director of plant science.

“You saw the spread happen in the legal states first, like California, where you started having bigger grows and bigger greenhouses that are making thousands and tens of thousands of plants,” Warren said. “In that system, it’s harder to maintain sanitation and it’s easier for a pathogen to take off.”

"The U.S. Agriculture Department typically sets quality standards and inspection requirements for agricultural products, but marijuana’s illegality at the federal level keeps it out of the agency’s purview."

*******

And big farms mean that agriculture and expensive housing may rub shoulders in California. Here's the Guardian on Santa Barbara County.

A beachside city became California’s legal cannabis capital. Not everyone is stoked  by Nicholas Schou

"Thanks to the most lenient policies in California for recreational marijuana, Santa Barbara county is now the state’s undisputed capital of legal cannabis, boasting more acres than the storied Emerald Triangle of Humboldt, Trinity and Mendocino counties.

"Santa Barbara voters overwhelmingly backed California’s legalisation of recreational marijuana in 2016, with hopes that the cannabis boom would bring tax revenue and new jobs to the county. The transformation has been fast and furious. Santa Barbara county is now home to around a third of all cultivation licenses issued in California, despite making up only 1.8% of the state’s land, with some megafarms stretching over dozens of acres.

"But the sudden influx of growers has inspired a broad coalition of frustration that spans local high schools, uber-wealthy homeowners and the region’s influential wine industry, who argue the pungent industry threatens to ruin their cherished lifestyle in a region dubbed the “American Riviera”.

...

"The tensions underscore a wider drama playing out in California over the promises of legal weed. Despite broad public support for bringing the industry out of the shadows, seven years on the illicit market is thriving, businesses are struggling to turn a profit, and many on the frontlines of the transition say they have yet to enjoy the returns.

"In fact, for the first time, officials in Santa Barbara are acknowledging that if market trends continue, the cost of the program both to public finances and to quality of life may outweigh any actual benefits.

...

"California’s cannabis market has been operating in a quasi-legal sphere since 1996, when medical marijuana was decriminalized. In 2016, advocates for Proposition 64 successfully argued that decriminalizing all cannabis use would create lucrative tax schemes and rewrite the historic injustices of policing such a widely used drug.

"But Prop 64 allowed cities to choose whether to allow cannabis businesses or not. Many refused to, banning both cultivation and dispensaries. Others, with varying degrees of success and scandal, sought to cash in on the “green rush”.

...

"Santa Barbara is alone among counties in that it taxes farmers based on the value of the marijuana they sell, as opposed to the acreage of their farms. While that strategy works when cannabis values are high, the industry has experienced a massive decline in profitability during the past year. With the sale price of cannabis in the state at roughly a third of its value just a year or so ago, many corporate investors have pulled out of the market entirely, and the number of licensed growers in Santa Barbara county has declined by about 25%.

"As a result, the county is expecting to earn just $7.5m in cannabis tax revenue this year, a 54% decline from 2022 and only half the $15.2m that was expected to fund the county’s latest budget, according to a county report."

Friday, July 21, 2023

The Cost of Inaction and the Urgent Need to Reform the U.S. Transplant System: participant statements

 Yesterday's Senate Finance committee hearings on The Cost of Inaction and the Urgent Need to Reform the U.S. Transplant System are on video, and the following witness statements (delivered beforehand) are now also available.

If you only have time to read one, I'd recommend clicking on the testimony of Matthew Wadsworth, the President And CEO of the OPO, Life Connection of Ohio.

Witnesses 


  1. LaQuayia Goldring
    Patient
    Louisville , KY
  2. Molly J. McCarthy
    Vice Chair & Region 6 Patient Affairs Committee Representative
    Organ Procurement and Transplantation Network (OPTN)
    Redmond , WA
  3. Matthew Wadsworth
    President And CEO
    Life Connection of Ohio
    Kettering , OH
  4. Raymond J. Lynch, MD, MS, FACS
    Professor Of Surgery And Director Of Transplantation Quality And Outcomes
    Penn State Health Milton S. Hershey Medical Center
    Hershey , PA
  5. Donna R. Cryer, JD
    Founder And CEO
    Global Liver Institute
    Washington , DC
**********

Friday, July 7, 2023

Regulating legal prostitution isn't easy, even in Amsterdam

 The NYT has the story:

Amsterdam Tries to Dim the Glare on Its Red-Light District. The mayor wants to improve the neighborhood for residents, but sex workers oppose measures recently put in place. Now the city is looking to set up legal prostitution elsewhere.  By Claire Moses

"It has been a goal sought after by Amsterdam for years: dissuading rowdy, brawling tourists from overtaking the red-light district.

...

"Now the city is pushing a more drastic move: setting up a location for legal prostitution in another neighborhood to spread out demand — an idea that has set off mixed reactions from the industry.

...

"Last year, Amsterdam saw about 20 million visitors, according to figures provided by the city. It has about 900,000 residents and is on track to have 30 million annual tourists by 2030

...

"Prostitution is legal in the Netherlands, but it is not allowed everywhere or without a permit. It is illegal to practice sex work at home, in a hotel room or in the street, for example. It is unclear how many sex workers are active in Amsterdam, and experts are wary of estimates. The red-light district has about 250 active windows.

"The local government is planning to decide on a final location early next year. But the erotic center, which would not be funded by the city, is still far from becoming a reality. Some people are adamantly opposed, and the city cannot force sex workers to move to an erotic center.

...

"Even before it was made legal, prostitution was associated with the red-light district for hundreds of years because of its original proximity to the port of Amsterdam. The commercial nature of the neighborhood and of its window prostitution, which has helped make it such an international draw, originated in the late 1960s, Mr. Verlaan said."


Saturday, June 10, 2023

Canada to require health warnings on individual cigarettes

 The Washington Post has the story:

Canada to require health warnings on individual cigarettes  By Sarah Dadouch



"Beginning next year, cigarettes sold in Canada will bear one of six messages in English and French. They include “TOBACCO HARMS CHILDREN,” “POISON IN EVERY PUFF” and “SMOKING CAUSES IMPOTENCE.” Health Canada announced the regulation Wednesday for World No Tobacco Day.

“This bold step will make health warning messages virtually unavoidable,” mental health and addictions minister Carolyn Bennett said. With updated graphic images on cigarette packages, she said in a statement, the labels “will provide a real and startling reminder of the health consequences of smoking.”

...

"Around 48,000 people in Canada die as a result of tobacco use each year, according to Health Canada. That’s more than those who die as a result of alcohol, opioids, suicides, murders and traffic collisions combined."

Sunday, April 30, 2023

Statement of Policy Principles and Solutions: Living Organ Donation, from the American Association of Kidney Patients (AAKP), the American Society of Transplant Surgeons (ASTS), and the American Society of Transplantation (AST)

 Here's a joint statement about living-donor kidney transplantation from the American Association of Kidney Patients (AAKP), the American Society of Transplant Surgeons (ASTS), and the American Society of Transplantation (AST). The statement opposes rethinking the ban on compensation for donors, suggests that other policies should be evidence-based, and opposes increased bureaucratization and cumbersome regulation of the transplant process.

Statement of Policy Principles and Solutions:  Living Organ Donation

"We stand together in our conviction that any policy changes impacting living organ donation, including those aimed at improving access to living donor transplantation and increasing the survival of already transplanted patients, must begin with principled and transparent dialogue with patients and the expert transplant teams who care for them.  

...

"The United States ranks in the top tier of nations in terms of living donor transplant rates,[1] meaning the current system for living donation works. However, disparities in access to living donor transplantation remain, and we must continue to improve and expand living donor transplantation for those in need.  As such, we support policy changes that are patient-centric, fiscally realistic, and ethically and legally sound. 

"Over the past decade some well-intended organizations and advocates have advanced ideas to increase access to living donor transplantation, including direct payments for or large financial incentives for organ transplants, that may appear expedient but can result in serious adverse consequences for transplantation and for patients. Many of these proposals pose serious unintended negative consequences to both donors and to public trust in organ donation. We fundamentally reject efforts to model changes to the current US system based on research or organ transplant practices in nations such as China and Iran whose governments fail to meet or ignore high international and US standards for ethical medical research and basic human rights.

...

"AAKP, ASTS, and AST strongly support the elimination of disincentives to transplantation and adamantly oppose coercive financial incentives to donate.

...

"AAKP, ASTS, and AST believe that improvements to the transplant system can best be made through ethically and legally sound, evidence-based, data driven policies informed and guided by patients and transplant professionals rather than by overhauling the entire transplant system.

"The transplantation system is a public-private partnership between the federal government and the transplant community and is designed, in part, to prevent overt political influence or other governmental interference in shared patient-physician decision making and clinical judgement. The relationship between patients, including living organ donors, and the doctors and medical institutions they choose to care for them must be protected and respected, as should the ability of individual transplant professionals to make clinical decisions in the best interest of those patients.

"Transplantation is heavily regulated by multiple federal agencies, including the Centers for Medicare and Medicaid Services (CMS), the Health Resources Services Administration (HRSA), and two HRSA contractors (the Organ Procurement and Transplantation Network (OPTN) and the Scientific Registry of Transplant Recipients (SRTR)).  Transplant centers are subject to duplicative (and often conflicting) requirements and surveys imposed by CMS and the OPTN. Living donor transplant programs are subject to additional scrutiny to ensure that donors are not pressured, coerced, or intimidated into donating an organ.  All living donor transplant programs are required to have independent living donor advocates that ensure that donors’ full and informed consent is given with a full understanding of the procedure and its potential risks and consequences.

"Into this existing and complex regulatory framework, some organizations are proposing policy and legislative changes that would either expand federal control over transplant by inserting yet another federal agency into the process or overhauling the entire transplant system to give federal agencies, as well as political appointees and politicians, greater authority to regulate living donor transplantation. Exposing the living organ donation system to such political influence and putting decision-making in the hands of non-transplant experts is a mistake with dangerous consequences for patient health, public trust, and donor and patient confidence.

"These proposals raise the possibility that the federal government would mandate a “one-size fits all approach” to an incredibly complex set of clinical problems. Such an approach would likely result in fewer innovations and fewer opportunities to reduce barriers to transplantation, especially for historically underserved communities. There are many potential reforms to the transplant system that can be effective, have been suggested by the wider transplant community over the past decade, and should be adopted by Congress and federal agencies. However, any policy or legislative proposal that seeks to amend or replace the existing system with an even larger federal bureaucratic reach with the potential for federal interference in decisions made among organ donors and patients and the doctors and medical institutions they choose to receive care from should be viewed with skepticism.

"We oppose policy efforts that seek to place any governmental entity in the position of determining clinical criteria for living donor transplantation or otherwise interfering with the relationship between and among potential recipients, potential donors, and their caregivers.

*******

As a reader of many such joint statements, I wonder if the phrase  "coercive financial incentives" resulted from a compromise between those who believe that all financial incentives are coercive, and those who wish to leave the door open in the future to ordinary, non-coercive financial incentives, of the kinds that attach to so many human activities, and have done so much to relieve other kinds of shortages.

HT: Laurie Lee via Frank McCormick

Wednesday, April 19, 2023

Transplantation: progress and continued shortcomings

 Here's a guest essay from the NYT that focuses on a different set of shortcomings of organ transplantation than organ availability. The author writes about how her long history of immunosuppression, to keep her transplanted organ(s) alive, has left her vulnerable to cancer.

My Transplanted Heart and I Will Die Soon.  By Marine Buffard

"My 35 years living with two different donor hearts (I was 25 at the time of the first transplant) — finishing law school, getting married, becoming a mother and writing two books — has felt like a quest to outlast a limited life expectancy. 

...

"Organ transplantation is mired in stagnant science and antiquated, imprecise medicine that fails patients and organ donors. And I understand the irony of an incredibly successful and fortunate two-time heart transplant recipient making this case, but my longevity also provides me with a unique vantage point. Standing on the edge of death now, I feel compelled to use my experience in the transplant trenches to illuminate and challenge the status quo.

"Over the last almost four decades a toxic triad of immunosuppressive medicines — calcineurin inhibitors, antimetabolites, steroids — has remained essentially the same with limited exceptions. These transplant drugs (which must be taken once or twice daily for life, since rejection is an ongoing risk and the immune system will always regard a donor organ as a foreign invader) cause secondary diseases and dangerous conditions, including diabetes, uncontrollable high blood pressure, kidney damage and failure, serious infections and cancers. The negative impact on recipients is not offset by effectiveness: the current transplant medicine regimen does not work well over time to protect donor organs from immune attack and destruction.

"My first donor heart died of transplant medicines’ inadequate protection of the donor heart from rejection; my second will die most likely from their stymied immune effects that give free rein to cancer.

...

"Without vigorous pushback, hospitals and physicians have been allowed to set an embarrassingly low bar for achievement. Indeed, the prevailing metric for success as codified by the Health Resources and Services Administration is only one year of post-transplant survival, which relieves pressure for improvement."

*************

That one year of measured graft survival is both too short, as the author points out, and too long.  By penalizing transplant centers for transplants that fail to survive a year, the current regulations make transplant centers too risk averse, so that kidney transplants that would have only, say, an 85% chance of working well are often not conducted, leaving patients to remain on dialysis, often til death,  for that 85% chance of life.

Transplantation is, still, a modern miracle. But until we can do without it, we'll have to keep trying to do it better.

Sunday, April 9, 2023

Alcoholic beverage distributors

 The FCC investigates and regulates not just the industries we all know about, but also industries that quietly do a lot of the heavy lifting in ordinary lines of business.  Here's report of a (possible) FTC probe that sheds light on distributors of alcoholic beverages, in which big businesses I hadn't previously heard of operate in a much more concentrated fashion than I would have guessed.

Politico has the story:

Feds target alcohol pricing in new antitrust probe. The FTC has a similar investigation involving the soft drink market.

"The Federal Trade Commission has opened an investigation into the largest U.S. alcohol distributor, Southern Glazer’s Wine and Spirits, over practices related to how wine and liquor are priced and sold around the country, according to three people with knowledge of the probe.

"The FTC is investigating Southern Glazer’s Wine and Spirits for possible violations of the Robinson-Patman Act, a 1936 law prohibiting suppliers from offering better prices to large retailers at the expense of their smaller competitors, according to the people.

...

"According to a December 2022 Forbes report, Southern Glazer is the 11th largest privately held company in the U.S., with around $25 billion in revenue and distributing over 7,000 different brands of alcohol, wine, beer and other beverages. Republic National Distributing Company, the second largest alcohol distributor, which is not known to be a target in the probe, had 2022 revenues of around $12 billion, according to Forbes. Combined, the two companies account for the bulk of U.S. alcoholic beverage distribution.

Sunday, April 2, 2023

Blue water, green water and climate change

 Much of the discussion of redesigning the markets for water focus on "blue water," i.e. surface water in rivers and lakes, and runoff from rain, and resulting accumulation in reservoirs, snowpacks, and ground water.

Here's a paper in Nature pointing out that, particularly as climates change, we also have to think of "green water," namely water from evaporation and rain, and how to manage that.

Rockström, Johan, Mariana Mazzucato, Lauren Seaby Andersen, Simon Felix Fahrländer, and Dieter Gerten. "Why we need a new economics of water as a common good." Nature (2023).

"Water managers have always had to deal with natural variability, building larger reservoirs and tapping aquifers to fight scarcity, for example. But current challenges and trends in the rest of this century demand a completely different approach: a radical shake-up in how water is governed, managed and valued, from local to global scales, including a re-evaluation of human water needs (see Supplementary information, Box S1).

"Today, the sector concentrates on flows of ‘blue’ fresh water — liquid that runs off the land and is stored in rivers, lakes, reservoirs and underground aquifers. Utilities capture and extract this water locally for drinking and sanitation, agricultural irrigation and industry.

...

"Managing fresh water on a global scale means going beyond our current fixation on capturing blue water, which constitutes 35% of all fresh water on land, to also encompass green water, which makes up the remaining 65% (see Supplementary information, Fig. S1). Flows of moisture and vapour from land and vegetation are essential for regulating the water cycle and securing future rainfall, as well enabling carbon sequestration in soils and forests.

"Globally, up to half of terrestrial precipitation originates from green water evaporated over land, with the rest from evaporation over the ocean3. Thus, landscape changes can alter water supplies in regions downwind, as well as changing local climates and streamflows. For example, deforestation in the Congo Basin lowers rainfall in neighbouring countries, and even across the Atlantic in the Amazon. Heavy irrigation of crops in India can boost the streamflow of the Yangtze River in China, through moisture transported downwind4.

"By analogy with watersheds on land, researchers refer to ‘precipitationsheds’ and ‘evaporationsheds’ in the atmosphere. Simply put, a precipitationshed is where rain comes from and an evaporationshed is where evaporation goes to. (Here, evaporation refers to total evaporation from the ocean and green water flows from land, including from soil and water bodies, as well as transpiration from vegetation.)"



Saturday, March 25, 2023

Junk Fees and Related Pricing Practices

 The White House is taking interest in hidden fees, both  because they interfere with competition on price (e.g. when Ticketmaster reveals fees only as someone tries to complete a purchase), and because they sometimes seem unconscionable.  Here's a White House statement.

The President’s Initiative on Junk Fees and Related Pricing Practices

"The Biden-Harris Administration is taking action on junk fees that hurt Americans’ pocketbooks and the economy."

"Exploitative or predatory fees. Excessive fees that target consumers who have limited alternative options – because they are locked into a product or service, or are otherwise economically vulnerable – can likewise impose a financial burden. As the CFPB explains, a sign of exploitative fees is that they “far exceed the marginal cost of the service they purport to cover.” Bank overdraft fees, which greatly exceed the bank’s cost of credit, and surprise “termination fees” are leading examples."

HT: Susan Athey

********

Regarding bank overdraft fees, my sense is that these drive lots of people away from the formal banking system and into the hands of high-interest-rate check cashing and payday loan services. Since we already regulate some debit card fees, I wonder if banks can't be encouraged to have some kind of debit-card-only "checking" accounts. Those would be able to prevent overdrafts, so they should be very cheap to administer, and would allow people to avoid paying very high fees and interest rates to non-bank financial services.

Thursday, March 23, 2023

Health Resources and Services Administration (HRSA) Announces Organ Procurement and Transplantation Network Modernization Initiative.

Here's a long awaited HRSA announcement, indicating their intent to modernize the deceased organ procurement and allocation system in the U.S.  It's still a bit short on details, but specifically mentions budget increases. In the future it will apparently issue Requests for Proposals from organizations willing to bid on parts of the transplantation allocation system, including software. (I hope HRSA is also thinking about how organ allocation policies will be revised and kept up to date in the future, including the possibility of experimenting with proposed improvements on a regular basis.)

The press release:

HRSA Announces Organ Procurement and Transplantation Network Modernization Initiative. Initiative includes the release of new organ donor and transplant data; prioritization of modernization of the OPTN IT system; and call for Congress to make specific reforms in the National Organ Transplant Act

"[March 22, 2023] Today, the Health Resources and Services Administration (HRSA), an agency of the U.S. Department of Health and Human Services (HHS), announced a Modernization Initiative that includes several actions to strengthen accountability and transparency in the Organ Procurement and Transplantation Network (OPTN):

"Data dashboards detailing individual transplant center and organ procurement organization data on organ retrieval, waitlist outcomes, and transplants, and demographic data on organ donation and transplant;

"Modernization of the OPTN IT system in line with industry-leading standards, improving OPTN governance, and increasing transparency and accountability in the system to better serve the needs of patients and families;

"HRSA’s intent to issue contract solicitations for multiple awards to manage the OPTN in order to foster competition and ensure OPTN Board of Directors’ independence;

"The President’s Fiscal Year 2024 Budget proposal to more than double investment in organ procurement and transplantation with a $36 million increase over Fiscal Year 2023 for a total of $67 million; and,

"A request to Congress included in the Fiscal Year 2024 Budget to update the nearly 40-year-old National Organ Transplant Act to take actions such as:

"Removing the appropriations cap on the OPTN contract(s) to allow HRSA to better allocate resources and,

"Expanding the pool of eligible contract entities to enhance performance and innovation through increased competition.

“Every day, patients and families across the United States rely on the Organ Procurement and Transplantation Network to save the lives of their loved ones who experience organ failure,” said Carole Johnson, HRSA Administrator. “At HRSA, our stewardship and oversight of this vital work is a top priority. That is why we are taking action to both bring greater transparency to the system and to reform and modernize the OPTN. The individuals and families that depend on this life-saving work deserve no less.”


"Today, HRSA is posting on its web site at Organ Donation and Transplantation (hrsa.gov) a new data dashboard to share de-identified information on organ donors, organ procurement, transplant waitlists, and transplant recipients. Patients, families, clinicians, researchers, and others can use this data to inform decision-making as well as process improvements. Today’s launch is an initial data set, which HRSA intends to refine over time and update regularly.

"This announcement also includes a plan to strengthen accountability, equity, and performance in the organ donation and transplantation system. This iterative plan will specifically focus on five key areas: technology; data transparency; governance; operations; and quality improvement and innovation. In implementing this plan, HRSA intends to issue contract solicitations for multiple awards to manage and improve the OPTN. HRSA also intends to further the OPTN Board of Directors’ independence through the contracting process and the use of multiple contracts. Ensuring robust competition in every industry is a key priority of the Biden-Harris Administration and will help meet the OPTN Modernization Initiative’s goals of promoting innovation and the best quality of service for patients.

"Finally, the President’s Budget for Fiscal Year 2024 would more than double HRSA’s budget for organ-related work, including OPTN contracting and the implementation of the modernization initiative, to total $67 million. In addition, the Budget requests statutory changes to the National Organ Transplant Act to remove the decades old ceiling on the amount of appropriated funding that can be awarded to the statutorily required vendor(s) for the OPTN. It also requests that Congress expand the pool of eligible contract entities to enhance performance and innovation through increased competition, particularly with respect to information technology vendors.

"HRSA recognizes that while modernization work is complex, the integrity of the organ matching process is paramount and cannot be disrupted. That is why HRSA’s work will be guided by and centered around several key priorities, including the urgent needs of the more than 100,000 individuals and their families awaiting transplant; the 24/7 life-saving nature of the system; and patient safety and health. HRSA intends to engage with a wide and diverse group of stakeholders early and often to ensure a human-centered design approach that reflects pressing areas of need and ensuring experiences by system users like patients are addressed first. As a part of this commitment, HRSA has created an OPTN Modernization Website at OPTN Modernization (hrsa.gov) to keep stakeholders informed about the Modernization Initiative and provide regular progress updates."

************

Here's a related story in the NY Times:

U.S. Organ Transplant System, Troubled by Long Wait Times, Faces an Overhaul. The Biden administration announced a plan to modernize how patients are matched to organs, seeking to shorten wait times, address racial inequities and reduce deaths.  By Sheryl Gay Stolberg

"The Biden administration announced on Wednesday that it would seek to break up the network that has long run the nation’s organ transplant system, as part of a broader modernization effort intended to shorten wait times, address racial inequities and reduce the number of patients who die while waiting.

*****************

 Earlier, the Washington Post had a story about how the most recent (current) version of the system  for allocating deceased donors is indeed having some problems, the most serious of which (in my view) is the congestion  involved in placing an organ for transplant. (This congestion involves time in getting an organ accepted, and then transported...)

New liver transplant rules yield winners, losers as wasted organs reach record high. The number of lifesaving liver transplants has plummeted in some Southern and Midwestern states that struggle with higher death rates from liver disease  By Malena Carollo and Ben Tanen

"New rules requiring donated livers to be offered for transplant hundreds of miles away have benefited patients in New York, California and more than a dozen other states at the expense of patients in mostly poorer states with higher death rates from liver disease, a data analysis by The Washington Post and the Markup has found.

"The shift was implemented in 2020 to prioritize the sickest patients on waitlists no matter where they live. While it has succeeded in that goal, it also has borne out the fears of critics who warned the change would reduce the number of surgeries and increase deaths in areas that already lagged behind the nation overall in health-care access.

...

"The new system, called the “acuity circles” policy, has nearly doubled the median distance livers are transported, increased transport costs and coincided with the highest number of wasted livers in nearly a decade, 949 in 2021. That’s 1 in 10 donated livers. The analysis further shows a significant increase in the number of states sending donated livers beyond their own borders. In 2019, before the new policy took effect, 21 states and territories exported a majority of livers they collected. Two years later, 42 did."

Friday, February 17, 2023

A tale of two Organ Procurement Organizations, in JAMA Surgery

 Here's a report of two Organ Procurement Organizations with very different rates of recovery of organs:

Variability in Organ Procurement Organization Performance by Individual Hospital in the United States, by Wali Johnson, MD1; Kathryn Kraft, MD2; Pranit Chotai, MD3; Raymond Lynch, MD4; Robert S. Dittus, MD5; David Goldberg, MD6; Fei Ye, PhD7; Brianna Doby, BA8; Douglas E. Schaubel, PhD9; Malay B. Shah, MD2; Seth J. Karp, MD1, JAMA Surg. Published online February 8, 2023. doi:10.1001/jamasurg.2022.7853

"Design, Setting, and Participants  A retrospective cross-sectional analysis was performed of organ donation across 13 different hospitals in 2 donor service areas covered by 2 organ procurement organizations (OPOs) in 2017 and 2018 to compare donor potential to actual donors. More than 2000 complete medical records for decedents were reviewed as a sample of nearly 9000 deaths. Data were analyzed from January 1, 2017, to December 31, 2018.

"Exposure  Deaths of causes consistent with donation according to medical record review, ventilated patient referrals, center acceptance practices, and actual deceased donors.

"Main Outcomes and Measures  Potential donors by medical record review vs actual donors and OPO performance at specific hospitals.

"Results  Compared with 242 actual donors, 931 potential donors were identified at these hospitals. This suggests a deceased donor potential of 3.85 times (95% CI, 4.23-5.32) the actual number of donors recovered. There was a surprisingly wide variability in conversion of potential donor patients into actual donors among the hospitals studied, from 0% to 51.0%. One OPO recovered 18.8% of the potential donors, whereas the second recovered 48.2%. The performance of the OPOs was moderately related to referrals of ventilated patients and not related to center acceptance practices.

"Conclusions and Relevance  In this cross-sectional study of hospitals served by 2 OPOs, wide variation was found in the performance of the OPOs, especially at individual hospitals. Addressing this opportunity could greatly increase the organ supply, affirming the importance of recent efforts from the federal government to increase OPO accountability and transparency.

**********

And here's an accompanying editorial:

It Is Time for the Light to Shine on Organ Procurement Organizations by Robert M. Cannon, MD, MS1; Jayme E. Locke, MD, MPH1 JAMA Surg. Published online February 8, 2023. doi:10.1001/jamasurg.2022.7857

"Many explanations have been put forth as to why some OPOs carry out their mandate more effectively than others. One argument is that mechanisms of death in some parts of the country are more conducive to organ donations than in others. We have refuted this phenomenon as a significant factor in OPO performance variability in our previous work.3 Others have even tried to place the blame for poorly performing OPOs at the feet of “risk-averse” transplant centers, a factor that the data presented in this current study also refute. The cold truth is that we have no good understanding of why some OPOs are better than others, or even what an acceptable level of OPO performance should be, because the environment in which OPOs operate is so completely obscure."

Friday, February 3, 2023

Selling flavored cigarettes after California's ban

 It's hard to regulate tobacco. The NY Times brings us up to date on California's ban on flavored tobacco products.

R.J. Reynolds Pivots to New Cigarette Pitches as Flavor Ban Takes Effect. Now that California’s tobacco prohibitions are in place, some Camel and Newport items are billed as newly “fresh” or “crisp” non-menthol versions. By Christina Jewett and Emily Baumgaertner

"R.J. Reynolds has wasted no time since California’s ban on flavored tobacco went into effect in late December. “California, We’ve Got You Covered,” the company declared in bold letters on a flier mailed to its cigarette customers.

"The law prohibits flavors, odors or “tastes” in tobacco products, including menthol cigarettes. But antismoking experts argue that R.J. Reynolds, the maker of Camel and Newport brands, is trying to circumvent the ban by luring smokers with a suite of what it says are new non-menthol versions offering “a taste that satisfies the senses” and “a new fresh twist.”

"The campaign is viewed by critics as a provocation of California authorities who are supposed to enforce the ban, which includes a provision outlawing packaging or claims that suggest a product has a flavor. The Food and Drug Administration also is moving forward with a national plan to take menthol cigarettes off the market.

...

"Dr. Robert Jackler, a professor at Stanford Medicine who provided the ads to The New York Times, called the new marketing “outrageous.”

“The thing that surprises me is there’s no camouflage,” said Dr. Jackler, who received the mailers along with staff members of Stanford’s program on tobacco advertising. “They’re saying, ‘This is our menthol replacement. And by the way — wink, wink — it is not really menthol.’”

...

"Worldwide, tobacco companies have discovered loopholes to bans on menthol or flavored tobacco, studies show. In Canada, flavor cards and additive drops have been used to supplement unflavored products. In Denmark, smokers now have access to menthol sprays, capsules and tubes."

***********



Earlier:

Tuesday, December 27, 2022

Thursday, February 2, 2023

Legal Frontiers for Safeguarding Reproductive Freedoms, in JAMA

 We can expect long legal battles to follow the repeal of Roe v. Wade.  Here's a survey of the battlefield in JAMA.

New Legal Frontiers for Safeguarding Reproductive Freedoms by Rebecca B. Reingold, JD; Lawrence O. Gostin, JD, JAMA. Published online January 30, 2023. doi:10.1001/jama.2023.1004

"In Dobbs v Jackson Women’s Health Organization, the Supreme Court overturned the landmark ruling, thus eliminating a national right to abortion before viability. Key federal strategies to address this ruling include expanding access to medication abortions and emergency abortion services. Federal conscience protections for health workers balance nondiscriminatory access to abortion services. Ballot initiatives and courts are seeking to protect reproductive rights under state constitutions. At stake is whether pregnant people can access essential services, with significant consequences for autonomy, dignity, health, and emotional well-being.

...

"In January 2023, the US Food and Drug Administration (FDA) modified its Risk Evaluation and Mitigation Strategy (REMS) to allow retail pharmacies to dispense mifepristone.2 Previously, mifepristone could be dispensed only in certain clinics, medical offices, and hospitals.

...

"In December 2022, the Department of Justice (DOJ) at the request of the US Postal Service (USPS) issued guidance clarifying the lawfulness of sending abortion medications through the USPS.3 An 1873 federal law (the Comstack Act) prohibits mailing any “article or thing designed, adapted, or intended for producing abortion.”4 The DOJ determined that the Comstack Act does not prohibit mailing, delivery, or receipt by mail of mifepristone or misoprostol because the sender cannot know if the drug will be used unlawfully.

...

"The Emergency Medical Treatment and Labor Act (EMTALA) requires hospitals that receive Medicare funds to provide stabilizing treatment to patients experiencing a medical emergency.6 Urgent medical treatment should extend both to saving life and preserving health. In July 2022, the Centers for Medicare & Medicaid Services (CMS) issued guidance stating that EMTALA requires abortion services wherever necessary to stabilize a pregnant patient experiencing an “emergency medical condition.”6 The CMS concluded that EMTALA preempts contrary state laws banning or restricting abortions under urgent circumstances.

...

"In December 2022, the Department of Health and Human Services (HHS) Office for Civil Rights proposed a new rule for health workers and entities that refuse to provide abortion or other services for religious or moral reasons. ... The Biden administration’s proposed rule would strike a balance between “safeguarding conscience rights and protecting access to health care.”8 Marginalized, disadvantaged, and underserved communities, including LGBTQ+ patients, persons with disabilities, and persons living with HIV, are disproportionately affected by conscience protections. The proposed rule should better protect patients’ autonomy, health, and dignity, while also respecting clinicians’ moral and religious convictions."

Monday, January 9, 2023

Non-compete clauses are anti-competitive: Lina Kahn (FTC chair) in the NYT

 An op-ed this morning by the chair of the FTC explains her opposition to non-compete clauses in labor contracts (which are already non-enforceable in California), following last week's proposed Non-Compete Clause Rulemaking

Lina Khan: Noncompetes Depress Wages and Kill Innovation,  by By Lina M. Khan (chair of the Federal Trade Commission) Jan. 9, 2023 

"Noncompetes were long assumed to apply mainly to high-level executives with access to sensitive corporate information. But their use has exploded in the past few decades, extending far beyond the boardroom. Today, experts estimate that one out of every five American workers, or about 30 million people, are bound by a noncompete. Studies and media reports have found noncompetes routinely invoked against fast-food workers, arborists and manual laborers, to name a few examples. Just this week, the Federal Trade Commission, where I am chair, settled allegations against a company in Michigan that prohibited its workers — security guards earning at or near the minimum wage — from going to work for a competitor within a 100-mile radius of their job location for two years. 

...

"over the past few decades, several states restricted the enforceability of noncompete clauses to various degrees, usually because of court decisions. This created natural experiments, allowing researchers to draw causal inferences about their impact.

"Their most staggering finding: Noncompete clauses systemically drive down wages, even for workers who aren’t bound by one. Every worker stuck in a job represents a position that isn’t opening up for someone else. And if employers know their workers can’t leave, they have less incentive to offer competitive pay and benefits, which puts downward pressure on wages for everyone.

...

"the evidence to date suggests that noncompetes suppress wages, reduce competition and keep innovative ideas from breaking into the market. One study even found that noncompetes lead to higher prices for consumers by reducing competition in the heavily concentrated health care sector.

"Noncompetes are the type of restriction that Section 5 of the F.T.C. Act, a federal law passed by Congress more than a century ago, is supposed to prevent. That’s why the F.T.C. last week proposed a rule forbidding companies to subject workers to noncompetes. Under the proposal, noncompetes would be designated an “unfair method of competition,” which the law prohibits. The rule would apply to professions across the board — janitors, nurses, engineers, journalists. Because employers often try to use noncompetes even when they’re unenforceable, the rule would require companies to proactively notify employees currently subject to noncompetes that those restrictions are now void.

"People might worry that eliminating noncompetes would make it impossible for companies to hold on to their secrets. But there is good reason to believe that more-targeted alternatives, such as nondisclosure agreements and trade secret law, would get the job done without imposing such a burden on the economy."