Making competition work

 Antitrust Policy in Health Care Markets

After reviewing all these issues included in the book, do you still think that true competition could work in health care?

In US, the evidence is that remedies doesn't cure the disease (collusion, monopoly, dominant position abuse).

Contents:

1. Health Care Markets and Competition Policy 1

1.1 The Marketplace of Health Care Spending 1

1.2 Competitive Concerns 3

1.3 Antitrust Policy 4

1.4 Plan of the Book 5

1.5 Concluding Remarks 12

2 Antitrust Policy in the United States 14

2.1 Introduction 14

2.2 The Economic Rationale for Antitrust Policy 14

2.3 Political Foundation of Antitrust Policy 19

2.4 Antitrust Treatment of Monopoly and Cartels 23

2.5 The Clayton Act 26

2.6 Private Antitrust Suits 27

2.7 Class Action Suits 31

2.8 Concluding Remarks 33

PART I MONOPOLY 35

3 Patents and Monopoly Pricing of Pharmaceuticals 37

3.1 Introduction 37

3.2 The Patent System 39

3.3 Patents and Monopoly Pricing 42

3.4 Patent Licensing 47

3.5 Antitrust Remedies 51

3.6 Government Policy Proposals toward Prescription

Drug Pricing 52

3.7 Extensions: Medical Devices and Orphan Drugs 64

3.8 Concluding Remarks 68

4 Patents and Exclusionary Product Hopping 74

4.1 Introduction 74

4.2 Exclusionary Product Hopping 75

4.3 Legal Challenges to Product Hopping 78

4.4 Solutions, If Any 88

4.5 Concluding Remarks 92

5 Bundled Discounts and PeaceHealth 95

5.1 Introduction 95

5.2 Bundled Discounts 96

5.3 Bundled Discounts in Health Care Settings 99

5.4 Anomalies of the Discount Attribution Test 105

5.5 Antitrust Treatment of Bundled Discounts 109

5.6 Concluding Remarks 112

PART II SELLER CARTELS 113

6 Collusion in Health Care Markets 117

6.1 Introduction 117

6.2 A Basic Cartel Model 117

6.3 Collusion among Physicians and Surgeons 121

6.4 Collusion among Hospitals 126

6.5 Collusion among Pharmaceutical Manufacturers 128

6.6 Collusion among Medical Device Manufacturers 131

6.7 Collusion among Health Insurers 132

6.8 Concluding Remarks 134

7 Collusion in Generic Drug Markets 136

7.1 Introduction 136

7.2 The Competitive Promise of Generic Pharmaceuticals 137

7.3 The Incentive to Collude 140

7.4 The Alleged Conspiracies 142

7.5 Economic Consequences of Collusion 150

7.6 Deterring Price Fixing 152

7.7 Concluding Remarks 154

Appendix: Alleged Participants in Generic Pharmaceutical

Drug Conspiracy 154

8 The Hatch-Waxman Act, Patent Infringement Suits,

and Reverse Payments 168

8.1 Introduction 168

8.2 The Hatch-Waxman Act 169

8.3 Reverse Payment Settlements 172

8.4 The Actavis Decision 177

8.5 The Post-Actavis Experience 186

8.6 Legislative Remedies 192

8.7 Private Damage Actions 197

8.8 Concluding Remarks 200

Appendix: The Economics of Settlements 200

9 The Alleged Insulin Conspiracy 204

9.1 Introduction 204

9.2 Insulin: A Brief History 205

9.3 The US Insulin Market 207

9.4 Pharmacy Benefit Managers 215

9.5 Collusion in the Insulin Market 220

9.6 Concluding Remarks 225

10 Licensing of Health Care Professionals 230

10.1 Introduction 230

10.2 Economic Concerns with Professional Licensing 232

10.3 North Carolina Dental and the State Action Doctrine 236

10.4 Licensing to Exclude Competition 242

10.5 Economic Effects of Mandated Supervision 245

10.6 The Empirical Evidence 249

10.7 Concluding Remarks 250

PART III MONOPSONY 255

11 Monopsony, Dominant Buyers, and Oligopsony 257

11.1 Introduction 257

11.2 Basic Model 258

11.3 Dominant Buyer Model 267

11.4 Oligopsony 270

11.5 Monopsony in Health Insurance Markets 273

11.6 Antitrust Treatment of Monopsony 275

11.7 Concluding Remarks 277

12 Countervailing Power: Physician

Collective Bargaining 279

12.1 Introduction 279

12.2 Bilateral Monopoly 280

12.3 Physician Cooperative Bargaining 286

12.4 Competitive Concerns 296

12.5 Concluding Remarks 298

13 Group Purchasing Organizations, Monopsony, and

Antitrust Policy 300

13.1 Introduction 300

13.2 What Do We Know about GPOs? 301

13.3 GPOs and the Exercise of Monopsony Power 302

13.4 Foreclosure of Suppliers 307

13.5 GPO Funding Mechanisms 312

13.6 Antitrust Enforcement Policy 315

13.7 Concluding Remarks 319

PART IV BUYER CARTELS 323

14 Collusion in the Nurse Labor Market 325

14.1 Introduction 325

14.2 The Shortage of Nurses 326

14.3 A Simple Analysis of an Employer Cartel 329

14.4 Recent Antitrust Litigation 333

14.5 Antitrust Damages 336

14.6 Antitrust Policy 341

14.7 Concluding Remarks 343

15 Collusion in the Oocyte Market 345

15.1 Introduction 345

15.2 Collusion in the Oocyte Market 346

15.3 Antitrust Standards 348

15.4 Economic Effects of Price Ceilings 351

15.5 Rule of Reason Analysis 352

15.6 Antitrust Injury and Damages 357

15.7 Disposition of Kamakahi 362

15.8 Concluding Remarks 365

16 No-Poaching Agreements and Antitrust Policy 368

16.1 Introduction 368

16.2 Background 370

16.3 No-Poaching Agreements in Health Care:

Seaman v. Duke University 373

16.4 Damage Theory 375

16.5 Government Regulation 381

16.6 Concluding Remarks 383

PART V MERGERS AND ACQUISITIONS 385

17 The Economics of Horizontal Mergers 389

17.1 Introduction 389

17.2 Mergers to Monopoly 390

17.3 Mergers of Producers to Realize Efficiencies 393

17.4 Mergers of Buyers to Realize Efficiencies 397

17.5 Merger Efficiencies Resulting in Increased Quality 401

17.6 Concluding Remarks 404

18 Horizontal Merger Policy 405

18.1 Introduction 405

18.2 Horizontal Merger Policy 406

18.3 Defining the Relevant Antitrust Market 410

18.4 Economic Evidence of Competitive Effects 412

18.5 Mergers and Their Anticompetitive Effects: Sutter

Health 415

18.6 Agency Analysis of Mergers in Health Care Markets 419

18.7 Concluding Remarks 431

19 The Economic Theory of Vertical Integration 434

19.1 Introduction 434

19.2 Vertical Integration 435

19.3 Vertical Integration and Competitive Distribution 439

19.4 Successive Monopolies in Production and Distribution 444

19.5 Competitive Concerns with Vertical Mergers 448

19.6 Empirical Evidence on Vertical Mergers 450

19.7 Mergers of Complementary Input Suppliers 451

19.8 Concluding Remarks 455

20 Vertical Merger Policy 457

20.1 Introduction 457

20.2 Legal Foundation 458

20.3 The 2020 Vertical Merger Guidelines 461

20.4 A Merger in Biotechnology: Illumina/GRAIL 465

20.5 The Merger of a Health Insurer and a Physician Group:

UnitedHealthcare/DaVita 469

20.6 The Merger of a Hospital System and a Physician Group:

St. Luke’s/Saltzer 472

20.7 Concluding Remarks 476

21 Concluding Remarks

Medtech regulatory affairs

 Medical Regulatory Affairs. An International Handbook for Medical Devices and Healthcare Products

Algorithms: the underpinning of black box medicine?

 Algorithms as medical devices

The rapid growth of digital devices, software and technologies means that the medical device sector is changing. Many small and independent manufacturers are encountering medical device regulation for the first time. At the same time, responsive and effective regulation of digital devices requires sound understanding of the underlying new technologies and concepts.

Algorithms as medical devices describes how digital health is covered by existing medical device regulation and outlines three critical areas: 

The challenges that the digital health sector may pose for regulators and developers

How digital devices can be regulated as medical devices under UK/EU and US law

The specific problems that machine learning could pose to medical device regulation

 Meanwhile the market for black box medicine is growing, unless any regulator leaves their continous vacation.

Regulating AI in healthcare

 Approval of artificial intelligence and machine learning-based medical devices in the USA and Europe (2015–20): a comparative analysis

Timely article. A must read to understand current situation.

A helpful document with the current approved technologies. 

Radiology leads the ranking:

Comparison of the situation between USA and EUROPE.

Connected health

 Improving Access to Care: Telemedicine Across Medical Domains

Access to health care relies on the use of available resources in attempts to achieve optimal health outcomes. It is composed of three main components: entry into the health care system, an adequate supply of services available, and timely provision of care

The article provides some useful views on telemedicine. It says,

 Frequently cited clinical limitations of telemedicine include the inability to perform comprehensive physical examinations, sacrifice of patient–provider relationships, fragmentation of care, and the potential for overprescribing/excess health care utilization. These concerns are often unsubstantiated, and while it is important to anticipate the potential shortcomings of telemedicine, innovative solutions are continuously being adopted to overcome potential barriers to implementation. Examples of such solutions include the use of user-friendly devices to gather vitals and data to facilitate remote clinical assessment, as well as utilization of interchangeable electronic health records to enable sharing of information among various providers.

Overall, the promise of telemedicine seems encouraging, and we look to further examine notable examples of its efficacy through the lens of four diverse, prototypical medical conditions with the goal of recognizing common themes and identifying areas of needed improvement. These medical conditions include stroke, heart failure, diabetes, and pregnancy.

L’home que sabia mirar el món, Manuel Castro Galeria Jordi Barnadas de l'11 de març al 9 d'abril de 2021

 

Regulating Artificial Intelligence as a medical device

 The need for a system view to regulate artificial intelligence/machine learning-based software as medical device

The starting point:

AI/ML-based SaMD raise new challenges for regulators. As compared to typical drugs and medical devices, we argue that due to their systemic aspects, AI/ML-based SaMD will present more variance between performance in the artificial testing environment and in actual practice settings, and thus potentially more risks and less certainty over their benefits. Variance can increase due to human factors or the complexity of these systems and how they interact with their environment. Unlike drugs, the usage of software and generally Information Technologies (IT) is known to be highly affected by organizational factors such as resources, staffing, skills, training, culture, workflow, and processes (e.g., regarding data quality management)8. There is no reason to expect that the adoption and impact of AI/ML-based SaMD will be consistent, or even improve performance, across all settings.

on unlocked and adaptive algorithms,

 All AI/ML-based SaMD that the FDA has thus far reviewed have been cleared or approved as “locked” algorithms, which it defines as “an algorithm that provides the same result each time the same input is applied to it and does not change with use”. The agency is currently developing a strategy for how to regulate “unlocked” or “adaptive” AI/ML algorithms—algorithms that may change as they are applied to new data.

Therefore,

 AI/ML-based SaMD pose new safety challenges for regulators. They need to make a difficult choice: either largely ignore systemic and human factor issues with each approval and subsequent update or require the maker to conduct significant organizational and human factors validation testing with each update resulting in increased cost and time, which may, in turn, chill the desire of the maker to engage in potentially very beneficial innovations or possible updates. 

 

Drug approval and geographic differences

 Approval of Cancer Drugs With Uncertain Therapeutic Value: A Comparison of Regulatory Decisions in Europe and the United States

We know that the regulation of medical devices is quite different between US and Europe, and with COVID tests we have experienced such divide. In drugs, one could expect a closer approach to approval. However, this is not the case. 

Regulatory agencies may have limited evidence on the clinical benefits and harms of new drugs when deciding whether new therapeutic agents are allowed to enter the market and under which conditions, including whether approval is granted under special regulatory pathways and obligations to address knowledge gaps through postmarketing studies are imposed.

In a matched comparison of marketing applications for cancer drugs of uncertain therapeutic value reviewed by both the US Food and Drug Administration (FDA) and the European Medicines Agency (EMA), we found frequent discordance between the two agencies on regulatory outcomes and the use of special regulatory pathways. Both agencies often granted regular approval, even when the other agency judged there to be substantial uncertainty about drug benefits and risks that needed to be resolved through additional studies in the postmarketing period.

Postmarketing studies imposed by regulators under special approval pathways to address remaining questions of efficacy and safety may not be suited to deliver timely, confirmatory evidence due to shortcomings in study design and delays, raising questions over the suitability of the FDA’s Accelerated Approval and the EMA’s Conditional Marketing Authorization as tools for allowing early market access for cancer drugs while maintaining rigorous regulatory standards.

 Hockney

Eurohealth

Everything you always wanted to know about European Union health policies but were afraid to ask

I have to say that I am not afraid to ask about health policies in EU because EU is basically a market. Therefore nothing to ask. Social policy is out of the real scope of EU.However, as a regulator of the market for health has clear examples of disfunctioning. For example, implantable medical devices regulation currently applied was enacted in 1990. New regulation will be applied next year, after 30 years of regulatory vacation. Nothing to add. Taxes haven't been on vacation. Shame on Europe. By the way, you'll not find minor details like this one in the book.

When the regulator doesn't care about the danger within us

A must see Netflix documentary: The bleeding edge. It explains how medical devices are introduced in the market without appropriate control.
CBS news explains some details:

Just because it's new doesn't mean it's better, it may be dangerous and damage you for life. Unfortunately, this is the summary.
And the book to read:

The paucity of public information about medical devices

The need for transparency of clinical evidence for medical devices in Europe

Last year EU approved a new law for assessing safety and efficacy of medical devices. Unfortunately, it comes late and it is not enough to solve current situation of lack of information on evidence. An article in Lancet explains precisely what should be done to increase the transparency of information on medical devices.All the details in this list:

 A small task force of regulators and invited stakeholders has recommended what information should be included in the summaries of safety and clinical performance and which components of the Eudamed database need to be open to public access. Those recommendations are now under revision. The European Commission has been delegated authority to translate them into further legislation, but it has indicated that it does not consider that to be a priority. Any member of the public or any organisation with an interest in these issues should therefore make representations now to the European Commission. The medical device regulations will take effect from 2020.

The time is now.