The Ducks Stop Here: For the first time, the Supreme rule the environment is no excuse for federal power grabs
Rabkin, Jeremy
The Ducks Stop Here For the first time, the Supremes rule the environment is no excuse for federal power grabs BY JEREMY RABKIN Rest assured,the Supreme Court's conservative cadre has not been...
...Congressional majorities prefer soothing generalities whose ultimate reach is obscure...
...Matthews's new IPI Policy Report, Prices, Profits and Prescriptions: The Pharmatech Industry in the New Economy...
...When the Supreme Court last visited the reach of the Clean Water Act, in its 1985 ruling in U.S...
...We would have to evaluate the precise object or activity that, in the aggregate, substantially affects interstate commerce...
...The full report is available at www.ipi.org <http://www.ipi.org> , or by calling +972/874-5139...
...Moreover, increased spending on direct-to-consumer advertising and R&D indicates that the pharmaceutical industry is becoming still more competitive as companies vie for market share...
...But even land use regulation must operate through constitutional means, and a division of authority between states and the federal government is a fundamental aspect of our constitutional scheme...
...The other pharmaceutical industry - the "pharmatech" industry - follows the New Economy model in which companies spend heavily to create and test a patentable product, but then incur minimal reproduction costs...
...The Court's majority held that under existing law this was not sufficient basis for federal interference...
...Consequently, price controls would do little to restrain overall drug spending...
...Hardly a pristine wilderness, the proposed site is an open-pit sand and gravel quarry where enough water accumulates during parts of the year to create stagnant ponds...
...market...
...The Ducks Stop Here For the first time, the Supremes rule the environment is no excuse for federal power grabs BY JEREMY RABKIN Rest assured,the Supreme Court's conservative cadre has not been intimidated by the outcry over its Florida recount ruling...
...If public officials really want to control prescription drug prices, they would do well to rely on competition rather than on government fiat...
...Meanwhile, the Court's majority clearly signaled that when Congress does enact a standard, it must carry a plausible basis for federal action...
...Price controls reduce incentives to discover new medicines, and they would lead to political rather than technological considerations in determining what drugs to develop - and whom to treat...
...The cost of prescription medicines has become a hot topic of debate in many countries...
...with the Court's strongest conservatives when it comes to restoring the federal balance...
...In the present matter Justice Stevens, speaking for four dissenters, argued with much logic that past environmental precedents could easily cover this case...
...This industry fits nicely into an Old Economy model in which competitors try to produce products or services similar to those of more successful rivals, but at lower prices...
...The premise of the holding is that courts should not defer to an administrative interpretation of a statute that "invokes the outer limits of Congress's power" without any "clear indication that Congress intended that result...
...The price of innovation is temporarily high costs for certain medicines...
...The pharmaceutical industry's need for temporary patent protection is an inherent function of a high-tech industry in an information-based economy...
...Price controls almost invariably inhibit research and development, and result in shortages and rationing - as the experiences of Europe and Canada demonstrate...
...This article is excerpted from Dr...
...Once again, the Supreme Court has helped the Bush team to get going...
...Beyond the timing of the decision, it is the setting that is most telling...
...Though the project was approved by state environmental officials in Illinois, the Corps of Engineers tried to veto it on the grounds that some of the "water areas are used as habitat by migratory birds which cross state lines...
...Merrill Matthews is a Visiting Scholar at the Institute for Policy Innovation (IPI) in Lewisville, Texas...
...Educating patients about the benefits of the drugs they buy gives them a sense of value for money...
...By contrast, when drug companies face the need to compete more effectively, they voluntarily reduce prices and seek new ways to get innovative products to market faster...
...Why not into anything and everything that might affect "the environment...
...Government has clear authority to regulate land use...
...This is the first time that the Court has invoked federalism concerns in a challenge to environmental regulation...
...The pharmaceutical industry's need for temporary patent protection is an inherent function of a high-tech industry in an information-based economy Unlike Old Economy companies that sell the same product year after year, pharmatech and other New Economy companies can earn profits only by continually releasing new or upgraded products...
...These companies have to recover their costs in order to continue researching new cures and treatments...
...Since federal control over interstate rivers has already been extended to adjoining wetlands, why not, they ask, into non-connected wetlands...
...And how many deadly or debilitating diseases might go untreated or uncured as a result...
...Of course, that is the point of environmental rhetoric: the environment is what surrounds us, so it is everywhere and connected to everything...
...The Court heard oral arguments in Solid Waste back in October, so the justices had almost certainly decided how they would vote long before they were dragged into the post-election counting disputes...
...Differing research and development costs help to explain why some drugs are affordable while others are expensive...
...Although pharmaceutical spending increased at a 13.7 percent average annual rate between 1995 and 1999, most of that increase resulted from increased sales volume, not higher prices...
...There are two different pharmaceutical industries...
...The problem with the dissenters' reasoning is that, having swallowed one incremental extension of federal authority after another, they now have no stopping point...
...Price controls threaten to restrain or undermine that innovation...
...In fact, the drug industry is already competitive - no single pharmaceutical company controls more than 7.2 percent of the U.S...
...v. Riverside Bayview Homes, it readily endorsed an extension of federal controls from "navigable" waterways (which presumably have a direct bearing on interstate commerce) to adjoining wetlands, even when not accessible to shipping...
...Although many prescription drug manufacturers are profitable, those profits are not out of line with other successful New Economy industries that produce high-demand products - or even with some Old Economy companies that market patentable or copyrighted material...
...PFIZER IS A RESEARCH BASED, GLOBAL PHARMACEUTICAL COMPANY...
...Critics assert that drug prices are too high, and some advocate de facto or explicit price controls on prescription medicines...
...In the New Economy, A world of Ideas on public policy...
...But justices who wanted to get back on the good side of the New York Times certainly had time to change their votes...
...ourt has helped the Bush team to get going...
...If the interconnectedness of all The Court heard arguments in October, so justices who wanted to get back on the good side of the New York Times had time to change...
...Competition in a market free of excessive regulation is the best way to keep drug prices low...
...the primary barrier to entry is the high cost of developing an innovative product that can then be patented, thereby enabling the discoverer to recoup its costs...
...http://WWW.PFIZER.COM expects federal regulators to reach—can itself be a considerable constraint...
...But are price controls good policy...
...Forcing Congress to make its concerns explicit—and to spell out how far it 14 THE AMERICAN SPECTATOR ¦ March 2001 The Pharmatech Industry in the New Economy by Merrill Matthews, Ph.D...
...Its January 9 decision in Solid Waste Agency of Northern Cook County v. Army Corps of Engineers was a new milestone in the constitutional project of restoring limits on federal authority over local matters...
...All the more reason for the Bush Administration to start explaining, in suitably compassionate terms, why it is proper for the federal government to respect the federal Constitution and maintain a Supreme Court that does the same...
...Instead, the Court's five conservatives put their names to the Rehnquist opinion and left it at that...
...The majority in Solid Waste has put federal regulators on notice that environmental slogans can't exempt them from constitutional limits...
...PFIZER INC, 235 EAST 42ND STREET, NEW YORK 10017-5755 USA...
...If market forces are allowed to operate, that competition will eventually lead to lower prices...
...The precise question was whether the Army Corps of Engineers had the authority, under the 1972 federal Clean Water Act, to block the creation of a solid waste disposal site in the Chicago suburbs...
...Environmentalists will try to ensure that President Bush doesn't get to reinforce this slim majority with future Court appointments...
...At that time, the Court seemed to take it for things obliterates distinctions between mine and thine, it can hardly be detained by the distinction between Illinois and Indiana...
...Justices O'Connor and Kennedy did not offer up apologetic disclaimers or qualifications in separate opinions, as they often do...
...In fact, most drug companies are profitable not because they charge excessive prices, but because doctors and patients want their products so much...
...In 2000, pharmaceutical companies world-wide will spend more than $26 billion developing and testing new drugs...
...How would they affect the ability of drug companies to research and develop new medicines...
...And when consumers perceive that they are receiving value for their drug dollars, they are less likely to care about how much profit drug companies make...
...The first mass-produces generic medicines, aspirin, cold medicines, ointments and other over-the-counter (OTC) drugs...
...LEADING POLICY EXPERTS...
...Less than a decade ago, Joseph Sax, a leading theorist of environmental law, put the point this way: "The ecological truism that everything is connected to everything else may be the most profound challenge ever presented to established notions of property...
...The Court split 5-4, with Chief Justice Rehnquist's opinion commanding only the votes of those same five justices who made up the states-rights majority in every one of the Court's decisions in this area over the past decade...
...In this instance, Rehnquist insisted the commerce clause requires more than a vague gesture at the commercial value of hunting and bird-watching...
...Because the majority ruled that the relevant statute had not clearly authorized regulation of isolated ponds and mudflats, it could restrain the Corps of Engineers without overturning Congress...
...Whatever hesitations they may have elsewhere, they have shown here that they are quite reliable partners granted that the federal government must have broad powers to protect "the environment...
Vol. 34 • March 2001 • No. 2
