Putting Patient Values in Value-Based Medicare

Peter J. Teravskis, MJLST Staffer

The vast majority of payments to medical providers are based on a fee-for-service reimbursement model. The fee-for-service model reimburses providers for every test, exam, intervention, and procedure they perform, potentially contributing to over-billing, increased health care costs, and waste. On the other hand, value-based care models tie provider reimbursement to efficiency of care and measures of patient wellness and satisfaction. For this reason, in recent years, there has been a nationwide effort to transition provider reimbursement away from fee-for-service towards value-based care.

In line with this effort, the Affordable Care Act contains many provisions designed to encourage the transition to value-based care. In 2015, then-Secretary of Health and Human Services Sylvia M. Burwell tasked the Centers for Medicare and Medicaid Services (CMS) with two goals for 2018: increasing (1) value-based purchasing practices, and (2) use of value-based reimbursement models (called alternative payment models or “APMs”) by Medicare providers. The hospital value-based purchasing program rewards acute-care providers for making purchasing decisions based on quality metrics rather than the volume of services provided while still operating in a fee-for-service framework. On the other hand, the APM adoption plan seeks to discard fee-for-service reimbursement entirely by encouraging the adoption of payment models that reimburse providers based on patient outcomes and efficiency of care rather than volume.

While CMS efforts have resulted in increased adoption of value-based care models, early data suggests that these models may not deliver the health and financial benefits initially promised. For example, recent studies indicate that multiple value-based Medicare reimbursement models in several clinical contexts fail to demonstrate meaningful improvements in hospital readmission rates, health outcomes, quality of care, and patient satisfaction. Nevertheless, some marginal cost savings have been reported. However, cost savings may be even more limited than the studies suggest. Government metrics may overestimate the actual adoption of value-based practices given the loose definition of “value-based care.” Further, the New York Times Upshot reports that CMS may overestimate the adoption of value-based purchasing metrics by miscounting many volume-based purchases as value-based purchases.

CMS’s attempt to implement value-based care through this top-down incentive structure is also ethically fraught. Current value-based care models have been criticized for making assumptions about what patients actually value, rather than adopting a pluralistic understanding of patient values. This “monistic” value system decreases patient autonomy in their health care decisions. Indeed, ethicists contend that it is only ethical to impose value-based decisions on patients if there is “strong and sound evidence” that they deliver “equivalent or greater clinical benefit at lower cost.” This ethical principle greatly limits the number of value-based reforms that can be instituted at the national- or hospital-level. Indeed, all other value-based decisions should be made in consultation with individual patients, taking into account their unique value systems. Furthermore, it is “ethically suspect” to withhold otherwise beneficial treatments based on cost savings alone. Unfortunately, value-based care models favor health care market efficiency and could penalize providers who tailor care to patient values rather than the monistic value structure described above.

Given the ethical limitations of value-based decisions that can be made without patient input, the early empirical shortcomings of Medicare’s value-based care initiatives may be partially explained by the slow process of aligning care to patient values. Specifically, the value-based decisions most likely to improve care and costs require physicians to (1) understand individual patients’ values, and (2) tailor efficient and effective care to align with those values. Unlike the APM adoption initiative which takes a holistic approach to incentivize value-based care, the hospital value-based purchasing plan does not allow for significant patient-provider collaboration, especially in the acute care setting where patient interactions are brief.

Recently, the Trump administration has reoriented value-based purchasing agreements to focus on drug price reduction and signaled it will slow the pace of APM adoption (a move that was criticized for creating uncertainty among health care market stakeholders). This deceleration likely stems, in part, from concerns over mandating the adoption of certain APMs in rural communities. Regardless of the motive, decelerating APM adoption will likely prove beneficial. The process of aligning care with patient values is largely intangible in the short-term; therefore providers and patients alike will benefit from the additional flexibility of a slower, voluntary transition away from fee-for-service reimbursement. Nevertheless, CMS must not lose sight of the goal of providing Medicare beneficiaries high-value-care while still affording providers the time and financial latitude to ensure that long-term benefits are genuinely patient-value-centric.


Mystery Medicine: How AI in Healthcare is (or isn’t) Different from Current Medicine

Jack Brooksbank, MJLST Staffer

Artificial Intelligence (AI) is a funny creature. When we say AI, generally we mean algorithms, such as neural networks, that are “trained” based on some initial dataset. This dataset can be essentially anything, such as a library of tagged photographs or the set of rules to a board game. The computer is given a goal, such as “identify objects in the photos” or “win a game of chess.” It then systematically iterates some process, depending on which algorithm is used, and checks the result against the known results from the initial dataset. In the end, the AI finds some pattern— essentially through brute force  —and then uses that pattern to accomplish its task on new, unknown inputs (by playing a new game of chess, for example).

AI is capable of amazing feats. IBM-made Deep Blue famously defeated chess master Gary Kasparov back in 1997, and the technology has only gotten better since. Tesla, Uber, Alphabet, and other giants of the technology world rely on AI to develop self-driving cars. AI is used to pick stocks, to predict risk for investors, spot fraud, and even determine whether to approve a credit card application.

But, because AI doesn’t really know what it is looking at, it can also make some incredible errors. One  neural network AI trained to detect sheep  in photographs instead noticed that sheep tend to congregate in grassy fields. It then applied the “sheep” tag to any photo of such a field, fluffy quadrupeds or no. And when shown a photo of sheep painted orange, it handily labeled them “flowers.” Another cutting-edge AI platform has, thanks to a quirk of the original dataset it was trained on, a known propensity to spot giraffes where none exist. And the internet is full of humorous examples of AI-generated weirdness, like one neural net that invented color names such as  “snowbonk,” “stargoon,” and “testing.”

One area of immense potential for AI applications is healthcare. AIs are being investigated for applications including diagnosing diseases  and aiding in drug discovery. Yet the use of AI raises challenging legal questions. The FDA has been given a statutory mandate to ensure that many healthcare items, such as drugs or medical devices, are safe. But the review mechanisms the agency uses to ensure that drugs or devices are safe generally rely on knowing how the thing under review works. And patients who receive sub-standard care have legal recourse if they can show that they were not treated with the appropriate standard of care.  But AI is helpful essentially because we don’t know how it works—because AI develops its own patterns beyond what humans can spot. The opaque nature of AI could make effective regulatory oversight very challenging. After all, a patient mis-diagnosed by a substandard AI may have no way of proving that the AI was flawed. How could they, when nobody knows how it actually works?

One possible regulatory scheme that could get around this issue is to have AI remain “supervised” by humans. In this model, AI could be used to sift through data and “flag” potential points of interest. A human reviewer would then see what drew the AI’s interest, and make the final decision independently. But while this would retain a higher degree of accountability in the process, it would not really be using the AI to its full potential. After all, part of the appeal of AI is that it could be used to spot things beyond what humans could see. And there would also be the danger that overworked healthcare workers would end up just rubber stamping the computer’s decision, defeating the purpose of having human review.

Another way forward could be foreshadowed by a program the FDA is currently testing for software update approval. Under the pre-cert program, companies could get approval for the procedures they use to make updates. Then, as long as future updates are made using that process, the updates themselves would be subject to a greatly reduced approval burden. For AI, this could mean agencies promulgating standardized methods for creating an AI system—lists of approved algorithm types, systems for choosing the dataset the AI are trained on—and then private actors having to show only that their system has been set up well.

And of course, another option would be to simply accept some added uncertainty. After all, uncertainty abounds in the current healthcare system today, despite our best efforts. For example, Lithium is prescribed to treat bipolar disorder, despite uncertainty in the medical community of how it works. Indeed, the mechanism for many drugs remains mysterious. We know that these drugs work, even if we don’t know how; perhaps using the same standard for AI in medicine wouldn’t really be so different after all.


Undocumented Americans and a Pathway to Health Care Coverage

Jacob Hauschild, MJLST Staffer

In a June Democratic Primary debate, moderator Savannah Guthrie asked the field of candidates who would provide undocumented immigrants access to health care coverage. When all ten candidates raised their hands, the issue of health care access for undocumented immigrants was pushed to the forefront of the health care reform debate.

Despite this apparent unanimity, Democrats are far from aligned on the issue—never mind the policy’s poor popularity among voters. But lacking from the public discourse is due attention to how undocumented immigrants currently engage with our health care system.

Health care coverage is usually attained by U.S. citizens through one of three sources: (1) employer-sponsored insurance (ESI), (2) public health care programs (for example, Medicare and Medicaid), and (3) the individual market. Not all of these doors are open to undocumented immigrants, however. While some do have access to ESI, undocumented immigrants are generally prohibited from enrolling in federal public programs such as Medicare and Medicaid[1], and they are also not permitted to purchase health insurance on the federal or state-based marketplaces. While they can buy short- or long-term coverage directly from an insurer or an insurance broker, this coverage is often prohibitively expensive. Therefore, undocumented immigrants who cannot access health care insurance through their employer are often left with no coverage options; in fact, undocumented immigrants are uninsured at a rate of about 45%, compared to the only 8% of citizens who are uninsured.

The lack of access to health care coverage causes lower utilization of health care services, particularly preventative care. Some uninsured patients have access to income-based Community Health Centers—which are an “important source of primary care” for the uninsured—but these facilities often lack “stable revenue streams [and] sufficient staffing support.” Further, most hospital systems have “Charity Care” programs, but these programs tend to focus on paying for health care costs already incurred, rather than promoting use of preventative care to help patients stay healthy and reduce future cost.

Low access to preventative care services results in poorer health care outcomes and more complex and expensive health care needs later in life for the undocumented and other uninsured groups. That care is often delivered in the emergency room, where care for an emergency medical condition cannot be denied due to ability to pay. The financial burden of this uncompensated care weighs on the entire health care system and poses a detriment to the financial and physical wellness of our communities. Further, the financial loss from this uncompensated care is ultimately spread among all health care consumers—for example, through increased taxes; diversion of public funds from other programs; and, as is often claimed, increases to the costs of private health insurance—and is leading to the insolvency of health care systems in communities with fewer commercially insured patients.

Keeping in mind the impact of high uninsurance among undocumented immigrants, the manner in which health care access is “expanded” is of tremendous consequence. Proposals like Joe Biden’s only allow for undocumented immigrants to purchase coverage at full cost on the ACA marketplaces, without access to tax subsidies. Due to excessive cost and the fact that undocumented immigrants live in poverty at twice the rate of U.S. born citizens, it is unlikely for such a policy change to reduce uninsurance amongst this population. Meanwhile, plans like Bernie Sanders’ Medicare-for-All apparently cover all residents of the United States, regardless of immigration status. Such expansive health care reform is controversial in its own right, and should Medicare-for-All or a similar proposal advance through Congress in the future, it seems likely that access—and the extent of that access—to undocumented immigrants will be a dividing point among Democrats, as well as a nonstarter among many Republicans.

Yet the issue merits attention. Because the health care costs of undocumented immigrants are spread across the health care system regardless of whether or not they have access to coverage, it is good policy to curb those costs with preventative care, particularly when we consider the specific health care needs of the population, which in the modern era include significant trauma. A solution could take several forms, ranging from full access to the marketplace and its tax credits; to Medicaid benefits for income-eligible, undocumented children; to expanded funding for Community Health Centers and culturally competent outreach. Whatever that solution may be, it will affect not only the 10.7 million undocumented immigrants in the United States but also each and every health care consumer in the country.

[1] Sixteen states permit undocumented women who are pregnant and meet income guidelines to temporarily access Medicaid by utilizing federal CHIP funding to cover the unborn child, and income-eligible individuals who receive emergency services in an emergency room may be eligible for Medicaid to exclusively cover those costs.


Will the Vaping Industry Go Up in Smoke?

Stephen Wood, MJLST Staffer

It’s no secret that vaping has become increasingly popular. The number of users has increased from 7 million in 2011 to 41 million as of 2018. The total market is now worth an estimated $19.3 billion. Less clear is the future of industry regulation in light of the recent respiratory illnesses linked to vaping. On September 24, 2019, the Centers for Disease Control and Prevention reported that vaping was attributed to 805 illnesses and 12 deaths. Pressure is building on the industry’s major players. In the last week, we have seen the cancellation of a merger between two of the largest tobacco companies, Altria and Philip Morris, and the release of the CEO of Juul, Kevin Burns.

However, the respiratory illnesses associated with vaping haven’t been linked to a specific product, and it is unclear what the long-term effects of vaping are. Because of this uncertainty, some states have implemented blanket restrictions on the sale of vaping products, President Trump has proposed new regulations, and the CDC has issued warnings regarding their safety. This is blindsiding the industry, which has been free from regulation by the FDA until recently.

Vaping devices, also known as electronic nicotine delivery systems (ENDS), became subject to the FDA’s regulatory scheme for all tobacco products on August 8, 2016. The Deeming Rule placed ENDS in the same category of products as cigarettes and other traditional tobacco products, which have been regulated under the Family Smoking Prevention and Tobacco Control Act since 2009. For this reason, the minimum age for purchasing ENDS is 18 years old, and the marketing, manufacturing, and distribution of ENDS is heavily regulated.

Juul, in particular, has come under fire for its marketing strategies. Among other claims, many lawsuits allege that the company specifically targeted minors through its use of social media and distribution of enticing flavors. These practices have also been the focal point of the recent surge of state regulations, which “are filling what many see as a regulatory void caused by federal inaction.” For example, in Michigan, Governor Gretchen Whitmer implemented an emergency ban, limiting the sale of vaping products to those which are tobacco flavored. New York did the same but exempted menthol from the ban. Massachusetts, notably, implemented a four-month emergency ban on all products. President Trump’s proposed ban, on the other hand, would be limited to flavored products.

If President Trump’s proposal is adopted, the industry would see an estimated 80% loss in sales. It will be interesting to see what the regulatory landscape looks like once the smoke clears.

 


A Green New City Plan? How Local Governments Should Plan For Climate Refugees

Shantal Pai 

Politicians, especially democratic presidential candidates, are competing to release the best “Green New Deal.” These proposals are national-scale climate plans that are meant to reduce carbon emissions to mitigate the impact of climate change. But, as these plans are released, a difficult reality remains: we may be less than one year away from irreversible changes to the climate.

Regardless of which Green New Deal eventually becomes United States Law (and one will—because climate change grows more undeniable each day), in addition to a climate mitigation plan, the U.S. and its cities need a climate adaptation plan: a way to survive in the new reality.

At the point of no return (2 C average warming, worldwide) the most inhabited regions of the world will face extremely hot temperatures, dramatic weather events including storms, flooding and drought, and sea-level rise. Though some regions have developed strategies to mitigate these damages—  such as a proposed levee surrounding Manhattan—the best possible solution may be to move threatened communities to higher, cooler ground.

So, in addition to national-scale plans, local governments in communities that will be attractive in our post-industrial climate, places like Minneapolis, Cincinnati, Buffalo, and Denver, should prepare. They need to be ready for a large influx of refugees from the coast looking for a secure future.

If Hurricane Katrina serves as an example, the first people to move permanently inland will not be the predominately white, wealthy residents of the city, but working-class residents and people of color. There are two reasons for this: (1) racially discriminatory housing practices mean people of color are most likely to face flooding and storm damage and (2) these groups are least likely to get government aid after a flood.

There has been a similar trend after Hurricane Dorian. Since the Trump Administration declined to grant temporary protected status to Bahamians fleeing uninhabitable conditions after the storm, many victims are fleeing with visas that will allow them to live in the U.S., but not to work. Many of these people will be staying with family in the United States while the Bahamas rebuilds, increasing demand for U.S. services while they are unable to contribute to local government revenue because they cannot earn an income.

Such a large influx of low and middle-income residents could wreak havoc on an unprepared regional plan. The people fleeing climate change need quick access to affordable housing, schools, and city resources, often at disproportionately high levels. At a city level, places with affordable housing already struggle to generate the revenue necessary to provide these services. In cities where property values are lower, the potential for a city to raise revenue from property taxes is lower. A massive influx of people fleeing climate change would further strain already deeply stressed city budgets.

Furthermore, a large influx of people of color often leads to “white flight”—an en masse departure of white people to nearby, more affluent cities—which deepens regional segregation and inequity.

The two combined lead to downward spirals in which the number of people of color in a community grows, leading to the departure of white people, causing property values to fall because there aren’t enough people of color who can afford to move into the neighborhood, which reduces a city’s ability to generate revenue while simultaneously leading to an influx of low-income people who are more likely to rely on city services. This phenomenon discourages building affordable housing, makes it hard for struggling cities to generate revenue, and maintains racial and economic segregation.

Strategic regional planning can combat these tendencies but needs to happen more aggressively than ever before as climate change amplifies existing inequality. First and foremost, the regions that will be most attractive to climate refugees need to encourage the development of affordable housing throughout the metropolitan area. Spreading the cost of supporting climate refugees across the region prevents any one city from being saddled with the expense of providing services and the inability to raise sufficient revenue.

Second, cities should desegregate school systems. In Louisville, Kentucky, a system to desegregate schools reduced white flight. The desegregation promoted stable housing prices and tax revenue, making it easier for cities to plan for the future.

Third, regions should build more public spaces than otherwise anticipated, in ways that avoid displacing existing poor and minority communities. Spaces like theaters, libraries, schools, and public transit will all face increased demand as new residents become acquainted with the region. These spaces increase property value, encourage wellbeing, and further reduce white flight, all of which help break the downward spiral of city revenue generation caused by white flight.

None of these solutions will prevent inequality, and refugees escaping climate change face extremely difficult challenges in relocating. But, by planning for climate refugees, local governments can help mitigate the effects of climate change on segregation.


Keeping Pace with Crimes in Space

Katherin Nixon, MJLST Staffer

At the end of August, something peculiar happened. Something extraterrestrial. No, NASA did not discover aliens on Mars (although that would have been peculiar and extraterrestrial too). Instead, the first crime was allegedly committed in Space—by a human being. Anne McClain was on a six-month mission aboard the International Space Station (“ISS”) when she accessed her estranged spouse’s bank account using NASA’s computer network. McClain has since been accused of identity theft and improper access to private financial records. Regardless of her innocence or guilt, this raises two important issues for law-oriented earthlings: (1) what laws govern Space; and (2) who has jurisdiction?

Among the laws that govern Space, two are especially noteworthy in this case. According to Article VIII of the Outer Space Treaty of 1967, “A State Party to the Treaty on whose registry an object launched into outer space is carried shall retain jurisdiction and control over such object, and over any personnel thereof, while in outer space or on a celestial body.” This would seem to suggest the United States maintains jurisdiction in this case. But, it is important to remember the crime was committed aboard the ISS. On January 29, 1998, fifteen governments came together to sign the International Space Station Intergovernmental Agreement (“IGA”). As the name indicates, this agreement governs all things ISS. Article 22 of the IGA states, “Canada, the European Partner States, Japan, Russia, and the United States may exercise criminal jurisdiction over personnel in or on any flight element who are their respective nationals.” Since McClain is a United States citizen—and the alleged crime was committed against another United States citizen—the United States has jurisdiction over this case.

However, what if the crime was committed against say—a Japanese citizen or a Russian citizen? This is the entry point for a black hole. Consider this hypothetical offered by Michelle Hanlon, professor of air and space law at the University of Mississippi: “Astronaut A from Country A stole a watch from Astronaut B from Country B, and it happened in a part of the ISS that belonged to Country C.” (Doesn’t this feel like the Space version of Civil Procedure?) In that situation, the IGA would require the different countries to come together in order to discuss their prosecutorial interests. Assuming the three countries could come to an agreement on whose jurisdiction governs, there would not be much of an issue.

Traveling further down the black hole, what happens when Space tourism takes off? With Space tourism, the discussion would involve private citizens and private companies instead of government employees and government entities. As noted by Loren Grush and The Verge, “[I]f someone from the U[nited] S[tates] gets hurt on a private Japanese space hotel, along with other passengers from Spain and Singapore, it’s unclear exactly how to proceed.” The Outer Space Treaty would likely be the start. Yet, countries with companies interested in Space tourism should come together to discuss a new agreement. The new agreement could be modeled after the IGA, but should include an added level of specificity.

As it turns out, keeping pace with crimes in space will be no easy task. Luckily, this will not be a pressing issue anytime in the near future. For now, it is an interesting thing to ponder as our presence in Space grows. The McClain case—despite its relative simplicity—serves as a preview for the more complicated cases that will eventually come.


New Year, New Chinese Intellectual Property System

Sherrie Holdman, MJLST Staffer 

Since the beginning of the new year, China has implemented various new Intellectual Property (“IP”) changes. Three major changes are particularly critical for promoting an enhanced IP system in China.

The first change is the establishment of a new IP appellate court. On October 26, 2018, China’s National People’s Congress (NPC) Standing Committee issued the Decision on Several Issues Concerning the Litigation Procedures in Patent and Other Intellectual Property Cases. On December 3, 2018, in a plenary session of the Judicial Committee of the Supreme Court chaired by Chief Justice Zhou Qiang, the Committee passed the Supreme Court Guidance Re Intellectual Property Tribunal. The official IP court was finally launched in January 2019. The new body is expected to hear appeals from both civil and administrative matters. According to Chief Justice Zhou Qiang, handing civil and administrative patent appeals to the new IP court will help unify adjudications related to patent validity and infringement, improve the efficiency and quality of court proceedings, and thus improve judicial protection of IP rights. The protection of IP rights has been a key issue of the trade war between the United States and China. China has been criticized for its lax IP protection for many years. The new IP court seems to come as a trade negotiation of the two countries.

Another change is China’s new policy on IP enforcement. On December 4, 2018, the National Development and Reform Commission, along with 37 government departments, released a Chinese interagency Cooperation Memorandum of Understanding. The goal of the Memorandum was to punish entities who seriously violate the patent law, including acts such as repeated patent infringement, non-compliance with the patent law, and serious illegal patent agency conduct. Like the new IP court, this policy seems to be another negotiation between the United States and China. Indeed, the policy was released days after the meeting of United States President Donald Trump and Chinese leader Xi Jinping at a summit in Argentina. The policy took a further step to enhance the IP protection in China.

The third change is the Fourth Amendment of the Chinese Patent Law. On December 5, 2018, the latest Draft of the Chinese Patent Law was presented to China’s State Council in a meeting chaired by Premier Li Keqiang. The new Amendment aimed to strengthen the protection of patent rights holder’s legitimate rights and interests, stimulate innovations, and promulgate legislations to effectively protect patent rights. Specifically, the Draft aimed to increase the penalties for IP infringement, to increase the amount of compensation and fines for willful infringement and counterfeiting patents, and thus increase the infringement cost in order to deter illegal acts. Particularly, the Draft proposed to raise the minimum fine to 100,000 RMB and the maximum fine to 5 million RMB. The Draft also stated that an infringer shall be cooperative in an infringement lawsuit. The Draft further set forth that network service providers shall bear joint liability for not stopping infringement in a timely manner. The Draft provided an incentive mechanism for employee inventors so that they could equitably share profits from inventions invented by the employees in the course of their employment.. Further, the Draft introduced a patent term extension system for innovative drugs, strengthened public information systems, and proposed to make basic patent data available in the China National Intellectual Property Administration (“CNIPA”) website. In order to foster patent dissemination and utilization, the Draft provided national and local authorities to increase public patent services and introduced an open patent license system. In addition, the Draft introduced a domestic priority of six months for design applications, extended patent term for design patents to fifteen years, and extended the time period for priority document submission for patents/utility models applications. The Draft Amendments were released for public comment from January 4, 2019 to February 3, 2019. The final rule is expected to come out soon this year.

It remains to be seen how these changes would improve China’s IP system. Nevertheless, the impact of these changes should not be underestimated. China is known as a big market for technology and business. However, foreign investors have been hesitate to invest in China due to China’s lax patent protection. With these changes aiming to establish an enhanced IP system, China is expected to build a friendly commercial environment to foreign inventors and investors, continue to improve domestic innovations, and encourage collaborations between foreign corporations with local companies. For instance, it has been said that these changes would attract global pharmaceuticals and tech companies to China because an enhanced IP system would enable foreign companies to uphold their IP in specialist courts, which is a great reassurance for foreign investors and inventors.


In 2019, We Will Learn A Lot About the Fossil Fuel Industry’s Climate Change Culpability

Sam Duggan, MJLST Staffer

Several lawsuits, filed in 2017 and 2018, are seeking damages from fossil fuel companies for harms caused by climate change. Interestingly, the fossil fuel companies are conceding that climate change is real, it is exacerbated by burning fossil fuels, and it is causing injuries within the United States. For example, during a recent trial where the cities Oakland and San Francisco sued numerous fossil fuel companies for climate-related damages, an attorney representing Chevron said “Chevron accepts the consensus in the scientific communities on climate change. . . There’s no debate about climate science.” Yet, the fossil fuel companies also state that plaintiffs’ claims for nuisance and trespass, among others, must be dismissed because balancing the positive and negative externalities of fossil fuel use is a nonjusticiable political question, and the claims are otherwise displaced by the Clean Air Act. So far, the courts have largely sided with the fossil fuel companies. See City of Oakland v. BP; City of New York v. BP. Other similar cases will likely be decided this year.

Importantly, however, political question abstention and Clean Air Act displacement become less controlling depending on whether the fossil fuel companies knew about the risks of burning fossil fuels (they did), and took affirmative steps to convince the public and regulators there were no risks (they likely did)? If so, these companies may be liable under consumer protection and products liability laws just as tobacco companies were liable for their disinformation campaigns that obscured the hazards of smoking cigarettes. Lawsuits brought by plaintiff in Colorado, Maryland, and others are pursuing these legal theories, and courts will likely reach the merits this year.

Similarly, the states of New York and Massachusetts brought lawsuits against fossil fuel companies for investor fraud. These lawsuits allege, for example, that ExxonMobil perpetrated a “longstanding fraudulent scheme … to deceive investors and the investment community … concerning the company’s management of the risks posed to its business by climate change.” To support their claims, Attorneys General from New York and Massachusetts have vigorously sought discovery of Exxon’s internal communications and research—Exxon aggressively protested and countersued. In January 2019, the U.S. Supreme Court declined to hear a discovery dispute between Massachusetts and Exxon, therefore it allowed discovery of 40-years of Exxon’s climate-related documents. This discovery request promises to color the landscape of fossil fuel industry liability. 2019 may become a watershed year for holding the fossil fuel industry accountable for its contribution to climate change—or not.


Treating Depression with Ketamine? How The Investment Was Made

Hunter Moss, MJLST Staffer

Depression is a serious mental disorder that afflicts millions of Americans each year. One in three of these individuals struggles to find a treatment method that alleviates their condition, and are aptly said to suffer from treatment-resistant depression. In the most severe cases, treating depression can be a life or death decision—depression is the leading cause of over 41,000 suicides every year. For those dealing with depression, every day is a struggle to persevere and try to regain a sense of normalcy.

A new therapy for treatment-resistant depression was approved by the Food and Drug Administration (FDA) earlier this week, one that could help those that have been unable to find relief elsewhere. The unexpected source of the therapy is esketamine. If the name of this drug sounds familiar, it is because the name is based on, and molecularly similar to, the street drug named ketamine. While originally synthesized in the 1960’s as an anesthetic and first used widely in the Vietnam War, ketamine is now known as a party drug, providing the user with mild hallucinations and a sense of euphoria. Due to its dangerous side-effects and potential for abuse, ketamine was placed on the Schedule III of the United States Controlled Substance Act in August of 1999.

In the early 1990’s, researchers at Yale University first recognized the potential for ketamine to treat the symptoms of depression. Since then, scientists sought to confirm the viability of ketamine as a treatment option for individuals who did not experience relief from other treatment methods. A 2012 study out of Baylor College of Medicine proved just that: 85% of patients with severe depression reported the treatment to be effective. Unlike selective serotonin reuptake inhibitors (SSRIs), which are most commonly prescribed to treat depression and can take weeks to build in a patient’s system before becoming effective, ketamine can provide nearly immediate relief with its full effect being felt in as little as two days.

With the science firmly in place, the next hurdle advocates of ketamine faced was of perception—in the eyes of the FDA and the public alike. Radical clinics began to emerge across the country to provide patients suffering from treatment-resistant depression with a safe, heavily-monitored environment to undergo care. Because ketamine had yet to be recognized as a potential aid for depression by the FDA, clinic physicians would often have to prescribe the drug under the guise of using it as an anesthetic. The “don’t ask, don’t tell” approach to a new treatment for a severe mental disorder created some inevitable quandaries for both doctors and patients, who would be unable to receive insurance coverage for a non-FDA approved treatment program.

While the medical community was well aware of the healing potential of ketamine, pharmaceutical companies were reluctant to make the investment. The average price-tag of a clinical trial for the FDA is $19m. There is certainly a market for the drug with countless Americans suffering from depression. The issue holding pharmaceutical companies back is related to patent law. In order to receive a patent, the proposed invention must be novel—and considering that ketamine has been around for nearly sixty years, that would be an impossible claim to make. Without patent protection, the multi-million dollar investment is bad economics for big pharma, even if the trials could provide relief for millions of Americans.

So why did Janssen Pharmaceuticals, the developer of a treatment method for depression based on ketamine, make the investment and receive FDA approval for its new drug Sprovato? The answer is because Sprovato is esketamine, a sufficiently different molecule from ketamine to be patentable. Certain molecules can be left-handed and have right-handed doppelgangers. While it is beyond the scope of this blog piece (and the ability of its author) to explain the difference between the two, esketamine is the left-handed version of ketamine’s right hand. The deviation between the molecules is a significant enough difference to pass the novelty requirement necessitated by the U.S. Patent and Trademark Office (USPTO). While there is some debate as to whether esketamine is as effective as its counterpart, esketamine passed the FDA’s clinical trials and, for the most part, has been received as a viable alternative to ketamine treatment. This development could help legitimize the countless ketamine clinics that have emerged across the United States over the last few years, yielding a promising new alternative for those struggling with severe depression. At the same time, the story of ketamine raises questions about the roles of several actors in the health care system, specifically pharmaceutical companies, the FDA and the USPTO, in delaying the introduction of life saving medication in order to adhere their respective financial and regulatory requirements.


Controversial Community Solar Garden Program is a Target of Minnesota’s 2019 Legislative Session

Hannah Payne, MJLST Staffer 

In 2013, Minnesota’s legislature opened the way for certain solar projects with the passage of the Community Solar Garden Program. The program requires Xcel Energy to purchase the energy created by Community Solar Gardens (“CSGs”) that are under a certain generation capacity. CSGs represent a middle ground between residential rooftop solar and large-scale, utility-owned solar. The idea is that medium-sized solar arrays are built in or near communities by developers, local residents buy subscriptions, and then the utility buys the energy from the array and credits the resident subscribers’ accounts. Solar developers sell subscriptions by highlighting the chance to save money and help the environment.

CSGs have been controversial since the inception of the program. Along with the significant growth of CSGs in Minnesota have come concerns about the sales practices of developers, who have been accused of misrepresenting the certainty of profit or stage of project development. The Attorney General warns consumers to “make sure they fully understand a subscription agreement and carefully consider whether they are willing to commit to its terms.” Opponents also decry that the majority of the capacity – 90% – of CSGs is purchased by commercial and other non-residential customers, undercutting the idealistic image of CSGs bringing renewable energy tangibly closer to communities. However, CSG advocates point out that the vast number of subscribers – 92% – are actually residential; they just use less energy than commercial customers.

At the heart of the controversy is the price issue. Opponents of the CSG program, including Xcel, say that it is far cheaper to produce solar energy in a large-scale setting. Xcel recently committed to going 100% carbon-free by 2050, and is likely focused on building renewable capacity efficiently. On the other side, proponents claim that Xcel’s lack of tolerance for competition has resulted in the undervaluation of CSGs because the social benefits and avoided costs have been ignored.

In any case, the CSG program looks poised to undergo change this year; several CSG bills have been introduced in the legislature. Senator Mike Goggin, a nuclear plant manager at Xcel, has proposed total repeal of the CSG program. Another bill would require Public Utilities Commission approval of CSG projects and cap the amount of capacity that may be built within the program annually at 25 Megawatts (there is currently no limit). Other proposals aim to improve developer sales practices, one listing detailed disclosures to be required in promotional materials, another calling for the state’s Clean Energy Resource Team partnership to develop a “disclosure checklist” for developers. Yet another bill would fund a study of “economic benefits to farmers” to investigate if the CSG program may be tweaked to be more farmer-friendly.

Minnesota is a national leader when it comes to CSGs; many will be watching to see how the legislation develops. As Xcel and others get more serious about renewable energy, conversations and controversies around renewables can only be expected to increase. Watching a debate like this unfold is a great way to keep a finger on the pulse of the energy world in this exciting time.